WHAT CAN SOCIAL MEDIA IN CHINA TEACH THE WORLD? DR. LINDA XU CHIEF - PowerPoint PPT Presentation

WHAT CAN SOCIAL MEDIA IN CHINA TEACH THE WORLD? DR. LINDA XU – CHIEF CLIENT OFFICER KANTAR MEDIA CIC

Why social media in China is so different

The Chinese Internet serves as a powerful platform for entertainment, information, socializing, and purchasing Unbalanced Shopping Limited Variety of Media Not Trusted Limited Socializing Access Entertainment

Social Media 2008 in China is: 2010 2011 Unique, Fragmented, 2012 and Dynamic 2013 2014 2015

BATS make China’s landscape uniquely PRACTICAL V I P VIRAL INFORMATIVE PRACTICAL Sogou Wechat Weibo Baidu Weibo Wechat Tenpay Wechat BATS: Baidu, Alibaba (Tmall/Alipay), Tencent (Wechat/QQ), Sina (Weibo) Weidian

Firewall has driven localization and much more  ACCESSABLE Baidu Search/ 百度搜索 Tieba/ 贴吧 Taobao/ 淘宝 Tmall/ 天猫 Alipay/ 支付宝 Wechat/ 微信 QQ X Blocked Weibo/ 微博

WeChat public accounts functions are innovative and comprehensive Gamification drives Brands can feed group-buying and netizens participation to discount content to consumers, and better deliver insert e-commerce site within brand/product feature banner Gamification E-commerce Discounts , credit and other Forum Magazine Third-party FM membership Third-party Membership plugins WeChat Third-party services can be plugins (Forum, FM, Service plugins make utilized on WeChat Feature Magazine…) to enhance more functions consumer loyalty possible on Real-time Other WeChat Customer Functions Service Real-time customer Scan bar code to services to answer get product stock followers’ information questions/complaints

Brands enjoy new ways to connect with customers Membership Service Product Sampling Store Search Customer Service E-commerce Survey Brand Community Product Information Campaign Channel (Post and HTML5)

Influence of social platform in China

Social media user base steadily grows in China 731 Million Social Media User Base in China 688 666.3 649 (December 2016) 618 624.1 587.8 564 544.6 532.2 513 503.9 467.8 466.8 457 436.6 415.0 433.0 373.0 428.2 384 371.8 318.6 353.0 325.3 294.5 298 272.0 308.6 244.2 284.0 275.1 277.7 271.4 280.8 240.4 244.0 248.8 235.1 249.9 230.5 221.6 210 201.7 175.9 170.9 161.5 161.8 149.3 148.0 137 144.0 129.1 120.5 120.8 111 117.0 119.0 94 102.0 76.3 63.0 50.6 49.4 46.2 46.5 40.0 34.7 19.6 15.8 47.3 4.6 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Microblog BBS SNS Video Blog IM Internet User Source: The 39th Statistical Survey Report on the Internet Development in China by CNNIC, January 2017 Notes: Internet user number includes mobile internet number; WeChat user was included into mobile IM user. According to Tencent Financial Report, Q3, 2016, WeChat user reached 846 million by the end of September, 2016. Notes: SNS user number isn’t counted from December 2014; blog user number isn’t counted from December 2015.

Mobile is the most widely used device to access the Internet Mobile Internet Users in China Internet Accessing Facilities Mobile internet user scale Million Million Desktops the proportion of mobile users in total netizens Mobile 680 800 95.1% 100% 656 92.5% 695 90.1% 619 88.9% Laptops 85.8% 83.4% 594 700 81.0% Tablet 580 527 557 78.5% 695 80% 74.5% 72.2% 656 TV 600 69.3% 500 594 620 66.2% 65.9% 65.5% 465 459 459 457 464 480 440 439 60.8% 557 398 500 60% 500 527 380 377 359 464 46.0% 410 430 400 345 380 420 420 39.5% 309 388 388 40% 282 356 280 284 273 300 356 269 266 272 276 259 277 28.9% 277 303 318 280 224 240 242 318 24.0% 303 200 277 233 209 230 20% 233 226 225 216 217 155 180 183 155 100 118 118 101 106 150 50 73 123 0 0% 80 Source: The 39th Statistical Survey Report on the Internet Development in China by CNNIC, January 2017 Note: Since 2014.12, TV has been used as an Internet Accessing Facility

Internet has become the leading media channel for ad spending in China Advertising Spending by Media Share of Spending by Media USD Billion 50 Internet Internet 42.3% 50.8% 40.6 Outdoor 40 9.0% 31.4 30.1 Outdoor 28.6 30 Magazines 8.5% 2016 2015 1.3% Magazin 20 es Newspapers 0.8% TV Newspa 4.1% 10 6.8 6.7 35.8% TV pers Radio Radio 3 2 1.8 1.5 40.6% 1.9% 1 0.6 2.3% 2.7% 0 TV Radio Newspapers Magazines Outdoor Internet SOURCE: GROUPM TV Radio Newspapers Magazines Outdoor Internet 2015 2016 Note: The Internet category includes Mobile Internet, E-commerce, Search, Online Video and Social Media.

Ad spending on Mobile Internet, E-commerce and Social Media grew with government support Internet, Smartphone and E-commerce has growing penetration in China Advertising Spending by Category USD Billion 60 80% Xinhua: Internet To Countryside 2.0 50 60% 58% 40 46% 30 40% Xinhua: 22.1 Traditional Mobile Service are Struggling 20 20% and Goes to Rural Area for Survival 14 20% 10.2 8.5 10 3.2 2.2 People's Daily: 0 0% Further Release E-commerce Potential Mobile Internet E-commerce Social Media 2015 2016 Growth Rate SOURCE: GROUPM / eMarketer / iResearch Note: Mobile Internet includes display and search. E-commerce includes Taobao, Tmall, JD, Qunar,etc, Search, Social Media includes blog, Baidu Tieba, Qzone, WeChat, Sina Weibo, etc.

Skyrocketing Ad spending on social media in past few years Social Media Advertising Spending Mobile App Penetration in China, 2016 USD Billion 5 80% Jun-16 Dec-16 73% 69% 78.7% WeChat at 4 86.8% 60% 3.2 67.4% QQ Zon one 3 67.8% 44% 40% 2.2 34.0% Sin ina Weib ibo 2 37.1% 1.3 11.1% 20% Douban 8.1% 1 Zhih ihu 7.6% 0 0% 2014 2015 2016 Tia ianya ya Social Media Ad Spending Growth Rate 7.0% SOURCE: iResearch SOURCE: CNNIC Note: Mobile Internet includes display and search. E-commerce includes Taobao, Tmall, JD, Qunar,etc, Search, Social Media includes blog, Baidu Tieba, Qzone, WeChat, Sina Weibo, etc.

Impact of social campaigns in China

Trending Stories on Social Media in China I.P I.P. (In (Intelle lectual Property) Cele Ce lebrit ity & Fandom Celebrity Endorsement Brand Sponsorship Flou lourishing E-commerce KOL & Cy Cyber Star New Economy Traffic Guidance KOL: Key Opinion Leader

Hot I.P. + Celebrity + Platform Integration Kiehl’s Tmall Fla lags gship Store Openin ing War arm-up: Cel Celebrity pos post t & Pro romotio ion vi video Weibo Post High 93,243 14,709 Popularity Link 95,748 Short Video 7,43 7,430,0 ,000 0 Viewership Vie @HERO 趙又廷 12,170,8 12,1 ,884 Live Broad Liv Broadcasti ting for or lau aunch cam ampaign Sales les Volu lume e Hot I.P. Effect il 6 th th , 2017 ) (April (A 5,000,000+ 24 Hours 1 Month 10,000,000+ 1.5 .5 M USD

Brand + Celebrity + E-commerce Promotion of of NBA #K #KB20# T-shirt Weibo + + Sho Short Vi Video + + E-commerce Link E-commerce Link + Short Video @KobeBry ryant One Day 4,964,8 4,96 ,815 NBA Most  7,000 Orders Valuable Player 5 Times NBA  Campions 18 Times All Star  $380,000 189,451 67,643 32,611 Player Retweet Comment Like

Expert KOL and luxury brand cooperation Mr. Bag Bag recommended Giv Givenchy rep epeatedly ly Givenchy and and Mr. . bag bag fans ans image an analysis 2 Fashio ion Delic icacy High-end Bags 包先生 @Ba A fas A ashi hion KOL Loves Lo s bag bag 1 Fan base ： French Luxury Fashion Brand 400,0 ,000+ Rich and Elegance, dignity, delicacy Average reads: beautifu ful 100,0 ,000+ lady Mr. Bag Givenchy • Note: 1: Data source: Digitaling. 2: Data source: Kantar Media CIC.

Success with limited editions for loyal fans Mr. Bag X Givenchy The only purchase channel Limited edition bag: Givenchy Horizon 80 Bags 12 Minutes 175,000 USD Special color for Mr. Bag’s fans: Baby Pink

Crisis management in China’s digital world

Response attitude directly impacts crisis scope and brand purchase intention Changes in Changes in Changes in purchase Average Duration purchase purchase Response Attitude intention% (Days) intention% intention% （ within 24 hours ） （ within 4 Days ） （ within 1 week ） Denial of issues 20 -403% -370% -312% Admit problems and apologize 28 -348% -301% -234% Immediately release a response indicating an investigation is underway before making 13 -219% -156% -113% any conclusion

Quick, Convincing, and Considerate Communication during crisis Brand K  Immediate response  All aspects of information  Caring tonality Brand D Brand A   Quick response Lacks of responses   Single message ‘our products are safe’ = Simply highlight ‘safety’ = not is not convincing convincing   Consumers feel not taken care of Consumers feel being cheated

Celebrity political views may lead to brand crisis Issue: Denise supported the independence of Hong Kong Key Mi Mile lest stone ne • Guardian Report every 4 hours • Continuous monitoring on weekend Denise HO Topic c Angles es 2% 5% Boycott involved brands Criticized involved brands/celebrity Forwarded the 13% news Others 80% Note ： The final evaluation would be based on the most severe index

Key takeaways