(update)Five China Marketing Predictions for 2020

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

So far Q1 has been nuts, CNY was basically cancelled and now we are in one of the largest pandemics in modern history, for most marketers in china Q1 has basically been a write off, but that hasn’t stopped the drama.

My prediction is that Q2 will see some recovery in China as far as marketing investment, we can assume that China is coming out the other end of this pandemic, short of a 2nd wave. Its therefore, probably safe to assume that the rest of the world, maybe not USA, will start to come out the other end by around end of Q2, what that means is that for Q3 and possibly as far as Q4 most of the effort will be focused on China, given the employment fall out globally, China still seems like the most robust as far as a recovery is concerned. On the flipside, i think USA and EU are in for a really tough remainder of the year, to say we are in a global recession or even depression right now wouldn’t be far off the mark IMO.

moving to an 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 — i think its too early to call this one, mainly as a result of Q1 activity basically flatlining. — undecided.

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 — we seen some movement here, but again Q1 has thrown this off for now — 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 — whilst i haven’t seen anything yet, i’m going to double down on this one given that recessionary climates tend to put pressure on marketing spends and this was one of the big wins for affiliate marketing and performance marketing in the UK during the 2008 crisis .— undecided.

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 — might be too soon to call this, but with the virus ecommerce has boomed, and taobao has been doing very well off of this virus, just like Amazon, this being said we do see other ecommerce players biting at their heels, as far as the virus has been concerned, the real ecommerce winners were the grocery delivery ecommerce businesses. — 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 — with the fall out of Q1 i think brands will double down on 11.11 and 12.12 to make up for a weak Q1 and Q2, so far our clients haven’t made any real push for any of the near-term shopping festivals — 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 — holy shit, Luckin completely imploded with a huge scandal around blatant faking of sales figures on the revenue side, there are now accusations of fraud on the cost-side as well. The COO took the fall, Muddy Waters look like wise-sages and a class-action Lawsuit was filed. At this time of writing their share price 4.9 down from a high of (at one point) 50. — WINNER WINNER CHICKEN DINNER.