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

Limited Variety of Entertainment

Media Not Trusted Limited Socializing Unbalanced Shopping Access

Social Media in China is: Unique, Fragmented, and Dynamic

2008

2010

2011

2012

2013

2014

2015

BATS make China’s landscape uniquely PRACTICAL

BATS: Baidu, Alibaba (Tmall/Alipay), Tencent (Wechat/QQ), Sina (Weibo)

V VIRAL INFORMATIVE PRACTICAL

Wechat Weibo Baidu Weibo Wechat

Tenpay Wechat

Weidian

Sogou

P I

X Blocked

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

Weibo/微博

WeChat public accounts functions are innovative and comprehensive

Third-party plugins (Forum, FM, Magazine…)

Scan bar code to

get product stock information

Brands can feed group-buying and discount content to consumers, and

insert e-commerce site within

banner

Real-time customer services to answer

followers’ questions/complaints

Gamification drives netizens participation to

better deliver brand/product feature

Discounts, credit and other

membership services can be

utilized on WeChat to enhance

consumer loyalty

Third-party plugins make

more functions possible on WeChat

Forum FM Magazine

Other Functions

Membership Service

Third-party plugins

Gamification

Real-time Customer Service

E-commerce

WeChat Feature

Brands enjoy new ways to connect with customers

Membership Service Product Sampling Store Search Customer Service E-commerce

Survey Brand Community Campaign Channel (Post and HTML5)

Product Information

Influence of social platform in China

63.0

249.9

308.6 280.8

248.8 230.5 271.4

19.6 46.2 50.6

76.3 102.0 117.0

148.0 144.0 149.3 120.5 129.1 119.0 120.8

175.9

235.1

244.2 275.1 277.7

161.5 201.7

240.4 284.0

325.3

371.8 428.2 433.0

503.9

544.6

4.6 15.8 34.7 49.4

161.8

221.6

294.5 318.6

373.0 436.6 466.8

40.0 46.5 47.3

170.9

244.0

272.0

353.0

415.0

467.8

532.2

587.8 624.1

666.3

94 111 137

210

298

384

457

513

564

618 649

688

731

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Microblog BBS SNS Video Blog IM Internet User

Social Media User Base in China

(December 2016)

Social media user base steadily grows in China

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.

Million

Mobile Internet Users in China Internet Accessing Facilities

Mobile is the most widely used device to access the Internet

50 73 118

155

233 277

303 318 356

388 420

464 500

527 557

594 620

656 695

24.0%

28.9%

39.5%

46.0%

60.8%

65.9% 66.2% 65.5% 69.3%

72.2% 74.5%

78.5% 81.0%

83.4% 85.8%

88.9% 90.1% 92.5%

95.1%

0%

20%

40%

60%

80%

100%

0

100

200

300

400

500

600

700

800

Mobile internet user scale

the proportion of mobile users in total netizens

282 309

345 359 377 380

398

410 430

440 459 457 465 459

439

233

277 303 318

356 388 420

464 500

527 557

594 619

656 695

118 155

209 224

240 242 259 277 272 276 280

284 266 273 269

226 225 216 217

230

101 106 123

150

183

80

180

280

380

480

580

680

Desktops

Mobile

Laptops

Tablet

TV

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

Million Million

TV 40.6%

Radio 2.7%

Newspapers 4.1%

Magazines 1.3%

Outdoor 9.0%

Internet 42.3%

TV Radio Newspapers Magazines Outdoor Internet

Share of Spending by Media

TV 35.8% Radio

2.3%

Newspapers 1.9%

Magazines

0.8%

Outdoor 8.5%

Internet 50.8%

Advertising Spending by Media

USD Billion

SOURCE: GROUPM

Note: The Internet category includes Mobile Internet, E-commerce, Search, Online Video and Social Media.

Internet has become the leading media channel for ad spending in China

2015 2016

30.1

2 3 1

6.7

31.4 28.6

1.8 1.5 0.6

6.8

40.6

0

10

20

30

40

50

TV Radio Newspapers Magazines Outdoor Internet

2015 2016

14

8.5

2.2

22.1

10.2

3.2

58%

20%

46%

0%

20%

40%

60%

80%

0

10

20

30

40

50

60

Mobile Internet E-commerce Social Media

2015 2016 Growth Rate

Advertising Spending by Category

USD Billion

Ad spending on Mobile Internet, E-commerce and Social Media grew with government support

Internet, Smartphone and E-commerce has growing penetration in China

Xinhua: Internet To Countryside 2.0

Xinhua: Traditional Mobile Service are Struggling and Goes to Rural Area for Survival

People's Daily: Further Release E-commerce Potential

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.

SOURCE: GROUPM / eMarketer / iResearch

1.3

2.2

3.2

73% 69%

44%

0%

20%

40%

60%

80%

0

1

2

3

4

5

2014 2015 2016

Social Media Ad Spending Growth Rate

Social Media Advertising Spending

USD Billion

Skyrocketing Ad spending on social media in past few years

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.

SOURCE: iResearch

78.7%

67.4%

34.0%

11.1%

86.8%

67.8%

37.1%

8.1%

7.6%

7.0%

WeChat

QQ Zone

Sina Weibo

Douban

Zhihu

Tianya

Jun-16 Dec-16

SOURCE: CNNIC

Mobile App Penetration in China, 2016

Impact of social campaigns in China

Trending Stories on Social Media in China

Celebrity & Fandom

Celebrity Endorsement

I.P. (Intellectual Property)

Brand Sponsorship

KOL & Cyber Star

New Economy

KOL: Key Opinion Leader

Flourishing E-commerce

Traffic Guidance

24 Hours

1.5 M USD

Sales Volume (April 6th, 2017 )

Hot I.P. + Celebrity + Platform Integration

12,170,884 @HERO趙又廷

Live Broadcasting for launch campaign

Warm-up: Celebrity post & Promotion video

93,243 14,709

95,748 Link

7,430,000 Viewership

Kiehl’s Tmall Flagship Store Opening

5,000,000+

10,000,000+

1 Month

Hot I.P. Effect

High

Popularity

Weibo Post

Short Video

Brand + Celebrity + E-commerce

4,964,815

@KobeBryant

Weibo + Short Video + E-commerce

Promotion of NBA #KB20# T-shirt

NBA Most Valuable Player

5 Times NBA Campions

18 Times All Star Player

67,643 32,611 189,451

Link

E-commerce Link

+ Short Video

One Day

7,000 Orders

$380,000 Retweet Comment Like

@Bags包先生 A fashion KOL Loves bag

French Luxury Fashion Brand Elegance, dignity, delicacy

Mr. Bag recommended Givenchy repeatedly

Expert KOL and luxury brand cooperation

• Note: 1: Data source: Digitaling. 2: Data source: Kantar Media CIC.

Fashion

High-end

Rich andbeautiful

lady

Delicacy

Mr. Bag Givenchy

Givenchy and Mr. bag fans image analysis

2

Fan base：

400,000+ Average reads:

100,000+

1

80 Bags

12 Minutes

175,000 USD

Mr. Bag X Givenchy Limited edition bag: Givenchy Horizon The only purchase channel

Special color for Mr. Bag’s fans:

Baby Pink

Success with limited editions for loyal fans

Crisis management in China’s digital world

Response attitude directly impacts crisis scope and brand purchase intention

Response Attitude Average Duration

(Days)

Changes in purchase intention%

（within 24 hours）

Changes in purchase

intention%

（within 4 Days）

Changes in purchase

intention%

（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

any conclusion 13 -219% -156% -113%

Brand K

Brand A Brand D

Quick response

Single message ‘our products are safe’ = is not convincing

Consumers feel not taken care of

Lacks of responses

Simply highlight ‘safety’ = not convincing

Consumers feel being cheated

Immediate response

All aspects of information

Caring tonality

Quick, Convincing, and Considerate

Communication during crisis

13%

5%

80%

2%

Issue: Denise supported the independence of Hong Kong

Topic Angles

Denise HO

Key Milestone • Guardian Report every 4 hours • Continuous monitoring on

weekend

Others

Boycott involved brands Criticized involved brands/celebrity

Forwarded the news

Note：The final evaluation would be based on the most severe index

Celebrity political views may lead to brand crisis

Key takeaways

Social content has become more rich, visual,

interactive, real-time, and immersive

01

TEXT

02

PICTURE

03

AUDIO

04

VIDEO

Iterated from portals to forums, from micro-blogs

to WeChat

Instagram and NICE: cross-platform social apps, social contents

mostly in pictures

Rise of audio based social platforms:

XiMaLaYa, Qingting FM

Short-video apps: Miaopai and Meipai

Integration of content, KOL and platform drives traffic & conversion

Live-stream

KOL Agency

Social Platforms E-commerce

FANS

Generate contents Consume contents

Supply contents Incomes sharing

Incubate Professional

division of work

Interact, traffic diversion, promotion

Self-operated online stores cooperated with brands

Monetization Fans management

Interact Consumption

KOL

In conclusion

Chinese social media is not only unique….it is uniquely important in

China as a source of information and as entertainment and purchase

channel

While good content is necessary, it may not be sufficient for success. The

mechanics of dissemination for different platforms are critical for success

Weibo and WeChat are ‘core’ platforms, but new platforms are emerging.

A multifaceted approach has become the norm

Content, Tactics, KOL and hot topic are key drivers for both E-commerce

as well as brand success on social

Look to social intelligence on KOL, hot topics and issues to inspire

relevant content

Chinese social media is a powerful force in

the world’s number one ecommerce market

driven not only due to the scale, influence and

engagement of social media, but also the

innovative practical services most importantly

payment, all available cross-device and

overwhelmingly active on mobile

Thank You!