The year 2023 has been a year full of important events for China. Indeed, the country has witnessed many dynamic changes in various spheres that reflect the country’s multifaceted evolution.
From industries highlights, like virtual influencers or the ever-increasing popularity of the sports industry, to the most important shopping events, like Chinese New Year or the 618 Shopping Festival. We will also see social media insights from major platforms, such as Wechat and Little Red Book.
Let’s recap what you missed in China in 2023.
What You Missed in 2023 in China: INDUSTRIES HIGHLIGHTS
The luxury goods industry in China is poised for a remarkable 14% year-on-year growth in 2023, surpassing the global growth rate of 7.5%. Despite the proportion of China’s overall expenditure on personal luxury goods declining from approximately 22% in 2021 to 18% in 2022, (Chinese luxury consumers are expected to drive 40% of the growth in global demand for luxury consumption over the next eight years.) The personal luxury goods market in Mainland China is projected to achieve a size of 56 billion euros (equivalent to 60.73 billion) by the conclusion of 2023.
The data predicted that the personal luxury goods market in mainland China would reach a size of 56 billion euros (equivalent to 60.73 billion) by the end of 2023. Additionally, they are making substantial investments in extensive partnerships with local travel retailers, aiming to strike a balance between upholding luxury traditions and meeting growth expectations.
The diverse consumption scenarios and channels in the realm of “Sports” provide consumers with a greater array of sports choices and services, fostering the development of new sports industries and contributing to the growth of China’s sports economy and healthy consumption.
A novel growth opportunity for the sports industry has emerged through the integrated development of sports with technology, education, tourism, health, medical care, lifestyle, and other sectors. An illustrative instance of this synergy is the combination of sports and technology, exemplified by runners employing smartwatches with GPS. According to the China Outdoor Sports Industry Development Report (2022-2023), there was a 79% surge in orders related to outdoor sports during the first half of 2023 in comparison to the corresponding period in 2022.
Cosmetics & Beauty Industry
In 2023, there is a growing trend of Chinese beauty and lifestyle influencers advocating for beauty standards that deviate from the traditional preference for pale white skin and stereotypical cosmetic surgery-enhanced faces. Douyin has emerged as the primary battleground for beauty brand marketing, with statistics indicating that Douyin alone represented over 40% of the marketing expenditures allocated to beauty brand advertisements across various social platforms. During November 2023, the retail sales of cosmetics in China reached approximately 54.9 billion yuan. The peak retail sales for cosmetics in China were consistently observed in January/February, June, and November, coinciding with the occurrence of shopping festivals.
Health & Fitness Industry
With the Chinese middle class increasingly embracing a health-conscious and aspirational lifestyle, the nation’s fitness industry has experienced remarkable growth. As individuals prioritize health and sports, the capabilities of sports apps and smart equipment have steadily enhanced, leading to a continuous rise in the user base of sports and fitness applications. The demand for fitness solutions is becoming more diverse, prompting the development of sports and fitness products that are increasingly tailored and refined to cater to the varied needs of users. The Gym, Health & Fitness Clubs industry experienced a growth of 8.7% in its market size in the year 2023.
Fashion & Apparel Industry
Despite substantial reductions in consumer spending, the Chinese fashion and apparel market has successfully recovered to pre-COVID-19 revenue levels. Looking ahead, the Chinese apparel industry is poised to advance towards a high-end and brand-focused direction, with an anticipated national acceptance that is projected to reach RMB 1,107.18 billion (approx 157 billion USD) by 2025. During November 2023, the earnings from garments and accessories reached RMB 150.30 billion (equivalent to US $21.23 billion), demonstrating a noteworthy 22% rise compared to the preceding year.
Education companies ought to concentrate on crafting content, platforms, and products, and should additionally integrate with industries like big data, cloud computing, and virtual reality to construct an interconnected digital education system, thereby augmenting their competitiveness.
The extensive market potential for adult and vocational education, coupled with policy support and a sizable consumer base, offers the industry ample room for growth. With the transition into Web 3.0 and the increasing application of technologies in industry development, EdTech has become a crucial tool for empowering more engaging and effective learning journeys.
Electronics & Home Appliances Industry
China boasts the fastest-growing household appliance market. Leveraging greater access to cost-effective technology, its exports carry higher value. Traditional categories command a substantial market share, while emerging categories are gradually gaining ground. In November 2023, the retail sales value for household appliances and consumer electronics in China reached nearly 95 billion yuan. The household appliance industry in China has evolved into a multi-billion dollar sector.
Mother & Baby Industry
In reaction to shifting customer preferences and the burgeoning market demand, the newborn and mother care business has ventured into diverse industries. Notably, the online sales growth rates include a -0.8% year-on-year decline, while baby formula exhibits a 2.3% year-on-year growth, and breast pumps experience a 6.1% year-on-year increase. Among the top products witnessing substantial online sales growth are baby milk powder and baby skin products. Additionally, Guochao-themed products continue to maintain significant popularity within this industry.
What You Missed in 2023 in China: SHOPPING EVENTS
Chinese New Year
Chinese New Year primarily revolves around the exchange of gifts and stands as the most crucial traditional holiday in China. Throughout the Chinese New Year festivities, numerous individuals purchase items for their families. Consequently, various short video platforms and e-commerce platforms organize interactive campaigns centered around the “New Year Goods Carnival” theme. These initiatives involve the release of coupons and the provision of discounts, aiming to incentivize people to engage in shopping activities. During the Chinese New Year travel season in 2023, the tourism industry generated close to 376 billion yuan in China.
March 8 marks International Women’s Day, serving as the first significant e-commerce marketing festival following the onset of the Lunar New Year. In contrast to previous celebrations such as Queen’s Day and Girls’ Day, contemporary e-commerce platforms simplify the event, straightforwardly labeling it as the “38 Festival”. This streamlined approach results from the promotion’s normalization, allowing for a concise delineation of the promotional rhythm.
With the sustained growth of the “She economy” and the ascendancy of female influence, major e-commerce platforms now recognize the 38 promotion as an annual S-level marketing campaign (process that aligns marketing and sales).
Chinese Valentine’s Day
The Qixi Festival, also recognized as Chinese Valentine’s Day, stands among the traditional festivals in the country. Observers mark the occasion by exchanging gifts such as flowers, chocolates, ties, and watches. E-commerce platforms and physical stores alike initiate diverse campaigns and promotions during this holiday period. Chinese consumers actively engage in discussions about special offers, gift boxes, and new arrivals tailored for Chinese Valentine’s Day. Additionally, approximately 17.1% of the content focuses on brand-related topics across various categories, encompassing makeup, skincare, fashion, and beverages. The Singles Day of 2023 signaled the first occurrence post-pandemic where consumer spending returned to ‘normal’ levels. There is a noticeable boost in sentiment and expenditures, illustrated by an 18% surge in total spending compared to 2022.
618 Shopping Festival
In 2022, China’s e-commerce platforms leveraged the 618 shopping festival to assist retailers in recuperating a portion of their diminished sales. This initiative took place against the backdrop of dwindling consumer confidence in China, attributable to major cities emerging from stringent Covid-19 lockdowns. During the 618 shopping festival in 2023, major e-commerce platforms in China recorded a Gross Merchandise Volume (GMV) of 798.7 billion yuan, marking an increase from approximately 695.9 billion yuan in the preceding year.
The Chinese “Golden Week” pertains to the extended holidays surrounding National Day on October 1. Many brands tend to provide special discounts during this period. Given that it is the lengthiest public holiday in China, it presents a significant business opportunity for international brands. According to data from the Ministry of Culture and Tourism, the National Day witnessed a total of 422 million domestic tourists, reflecting an 18.2% year-on-year decrease. Despite this decline, domestic tourism revenue reached 287.2 billion RMB, indicating a 26.2% year-on-year decrease.
Alibaba’s Singles’ Day, also known as Double 11, stands out as China’s most renowned e-commerce shopping festival. This event holds immense promise for brands and retailers, attracting an ever-expanding number of enthusiastic participants each year. For Alibaba, Singles’ Day serves as an opportunity for innovation, testing system potential, and making future adjustments. The profitability of pre-sales during the lead-up to the event continues to grow annually, and live streaming remains a significant contributor to the market.
In the initial sales surge of Double Eleven in 2022, the gender characteristics of the new users drawn to Taobao and Pinduoduo were not distinct. However, JD.com saw a higher influx of female consumers. Initially, JD.com’s primary product categories comprised digital products and home appliances, with a target audience predominantly being men. In the 2023 Double 11 promotion, significant e-commerce platforms attained a Gross Merchandise Volume (GMV) of ¥1,139 billion, indicating a modest year-on-year increase of 2.1%.
What You Missed in 2023 in China: SOCIAL MEDIA INSIGHTS
Since its official debut in 2011, WeChat has emerged as the dominant social media platform in China, boasting about 1.3 billion monthly active users in 2023. It not only serves as an instant messaging application but also functions as a comprehensive platform for social networking, information sharing, and participation in campaigns. Many brands consider WeChat their primary marketing platform.
Introduced in 2009, Weibo rapidly gained popularity as a dynamic platform. Similar to Twitter, Weibo delivers real-time news to its audience anytime, anywhere. It operates as a fast-paced medium, offering glimpses into the world and behind-the-scenes stories, facilitating self-expression, and enabling individuals to share their opinions. Additionally, Weibo serves as an excellent platform for celebrities, idols, and influencers to engage with their fans. In 2023 Weibo had about 605 million monthly active users.
Douyin, recognized for its music videos and vibrant creator community, is a short video social media platform. The international iteration of Douyin is known as TikTok. Established in 2016, it is owned by ByteDance, now known as Douyin Group. Boasting 752 million monthly active users in 2023, Douyin experiences rapid growth as a short-video platform, positioning itself as a major contender in the realm of live-stream commerce.
Xiaohongshu, commonly known as RED, operates as a combined social media and e-commerce platform. Users can share product reviews, lifestyle narratives, creative short videos, and photos on this platform. In April 2020, RED introduced new features such as livestreaming, Lucky draw tool, and Enterprise Account setup. With an impressive user base, in 2023 Red had 200 million monthly active users.
Bilibili is a Chinese video-sharing platform centered on animation, comics, and games (ACG), allowing users to upload, watch, and provide overlaid commentary on videos. The majority of Bilibili’s user base consists of young individuals. Advertisements on the platform adopt content marketing strategies with a range of diverse advertisers. As of 2023, Bilibili boasts 260 million monthly active users.
KOL & Virtual Influencer
Emerging as the leading category in advertising expenditure, the KOL market has witnessed significant growth, reaching 80 billion RMB in 2021. According to surveys, the top three focal points for brands in 2022 include investing in KOL marketing, short video marketing, and managing official social media accounts. The total number of KOLs experienced a year-on-year increase of 15% in 2022. Notably, China’s virtual KOLs, which encompass digitally generated characters like virtual singers, IP characters, and hyper-realistic virtual humans, have become a notable segment. The virtual KOL industry in China is projected to reach 20.52 billion RMB by 2023. Over the past three years, more than 30 brands have collaborated with virtual humans, and these digital entities have gradually secured a portion of the endorsement market. Consequently, in efforts to enhance brand promotion and generate novel attractions, brands have begun launching their own avatars.
Here’s everything that happened and what you missed in China in 2023.
Long Advisory digital marketing agency in China
Long Advisory supports American and European companies in China through digital marketing. In fact, our experience has led us to believe that today, the best and most convenient approach to making your brand well-known in China is through a digital approach. Furthermore, thanks to our know-how, we know how to make your brand known to potential Chinese consumers. With the effective coordination of Long Advisory, your company will see a new rise in the largest market in the world: China.
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