(update 2)Five China Marketing Predictions for 2020

(you can see the original predictions here — https://medium.com/@kennethscheung/five-china-marketing-predictions-for-2020-8a554fe409ab)

(you can see update 1 here —https://medium.com/@kennethscheung/update-five-china-marketing-predictions-for-2020-a9972ef0f3ce)

China has been on the mend since the craziness of the first half of the year, shanghai is as a much as possible back to normal, from the time of writing its been about a month or two since there was a localised case, and with the exception of wearing a mask, everything is open and back to normal so to speak.

moving to my 2nd update on my 2020 predictions -

1. KOLs are going to evolve — currently KOLs are basically a pretty face pushing product, we’re already seeing a change in how brands are trying to be more culturally relevant and tap into the audiences core values. So I expect that as KOLs get saturated and the content starts to feel more and more the same (pushing product) we’re going to see more KOLs who are focused on story telling and cultural values rather than simply pushing product.

Q1 verdict — being in the industry, we’re getting lots of pressure to track sales for KOLs, similar to how affiliate marketing worked back in the day. so whilst we’re not able to do this, i’m going to call this a win. — WIN

1. ByteDance (specifically Douyin/Tictok) is going to push their own ecommerce solution directly competing with Alibaba and Tencent — we have signs that bytedance is pushing into ecommerce ads as a means of monetization, given the nature of how that company competes i think its reasonable they’ll try and take a slice of the ecommerce pie.

Q1 verdict — i’ve not heard much on this so far, it seems like ByteDance is focusing on their international front, with limited success, at the time of writing they’ve shuttered some of their international news assets — undecided.

1. KOCs and KOLs will become more performance driven — large KOLs are already suffering from over saturation and pressure mounts for more accountability to performance and sales, i think we’ll see more of that this coming and increasing pressure for KOLs to take performance based deals. the only thing preventing this is the platforms and technology to enable deep level of performance tracking.

Q1 verdict — same as the first prediction, we’re seeing lots of pressure for KOL activity to be performance base. I’m calling this a win. — WIN

1. Taobao/Tmalls reign as the kings of Ecommerce will be severely dented — whilst they will still be the dominant player, tencent and bytedance will take more share, in particular tencent will push more aggressively into that space, we will see brands starting to look for alternative ecommerce platform options beyond taobao/tmall and JD.

Q1 verdict — the coronavirus seems to have propped up their reign so whilst its early, it seems like for now Taobao and Tmall are still King. — undecided.

1. Shopping festivals will start to lose steam — we saw the highest GMV from this years 11.11, but the story no one talks about is that unique orders dropped to the lowest ever, couple that with the regulations that were pushed on brands this year and you can infer that taobao/tmall are trying to ‘force-through’ growth at the expense of the brands margins, this can’t carry on infinately and at some point CAC will exceed a reasonable % of LTV and brands will no longer play ball when it comes to the ever growing number of shopping festivals.

Q1 verdict — 618 shopping festival hasn’t had much noise so far, but with coronavirus meaning that the only real area of retail growth is china, i think all the marketing budgets are going to flow into china and focus on very tacti cal things like these shopping festivals, with this in might they might actually increase, but i’ll hold off on a verdict till 11.11 — undecided.

1. (bonus) Luckin will tank by the end of 2020 — so far they’ve bucked the trend, but the fundamentals don’t make sense, i suspect that there’s some creative accounting at play and they can’t keep that up forever, at some point those ‘hidden’ losses will come out and the stock will take a hit.

Q1 verdict — so this one i was absolutely spot on, but since then the big news is the owners and leaders of Luckin are in major hot water even within china, with legal action and potential prison terms. — WINNER WINNER CHICKEN DINNER.