WPIC Marketing + Technologies

WPIC is pleased to announce the appointment of Zarina Kanji as Managing Director, UK & Europe.

What will potential tariffs mean for Temu and Shein? Was happy to share my thoughts on this question with Aditi Bharade at Business Insider. In my opinion, it's not a guarantee that we’ll see higher prices on these platforms from potential tariffs. Shein and Temu were able to avoid tariffs during Trump’s first administration due to the de minimis provision. Even with tariffs applied to their imported products, Temu will still be price competitive due to thinner merchant margins and access to cheap Chinese sourcing. Moreover, Temu has recently moved into the semi-consignment model, which allows for merchants with goods outside China to sell to local sellers on Temu. The semi-consignment model now accounts for over a quarter of U.S. GMV, which further reduces Temu’s exposure to tariffs and its reliance on the de minims provision.

Fantastic webinar on recent retail festivals and global e-commerce trends from WPP—featuring WPIC's Zarina Kanji, Jing Zhang, and others. Zarina breaks down some of the numbers from the WPIC Marketing + Technologies data team on Singles' Day and other developments in China. Highly recommend a watch.

This week, WPIC officially opened the “Sydney Room” at its Nanjing campus, a state-of-the-art studio dedicated to livestreaming for Australian brand partners. Simon Woods of AustCham Shanghai joined WPIC CEO Jacob Cooke for the opening ceremony. Read more below.

Today at the WPIC Marketing + Technologies Nanjing campus, we were proud to open the “Sydney Room”, a studio dedicated to livestreaming for our Australian brand partners. Since opening WPIC's office in Sydney earlier this year, we’ve been so encouraged by our positive reception in the market—and the enthusiasm from Australian consumer brands for expansion in China and across APAC. We’re excited to open a dedicated space to livestream for our growing portfolio of Australian brand partners—and the new studio increases our daily livestreaming capacity from 200 hours to 220 hours. Thank to Simon Woods, CEO and Executive Director of AustCham Shanghai, for visiting our Nanjing campus and participating in the dedication ceremony. For the inaugural livestream from the Sydney Room, we welcomed Tang Ze, a prominent beauty influencer on Douyin, to stream on behalf of one of our Australian skincare brand partners. Thanks to our team for their hard work in setting up this studio—and we’re excited about our continued expansion in Australia.

It was great to hop on Bloomberg Friday morning to speak with Annabelle Droulers and Stephen Engle about China’s consumer landscape and WPIC’s latest market data report. Before Singles’ Day, we released a report identifying China’s fastest-growing product categories and sub-categories across Tmall/Taobao, JD, and Douyin. We found significant sales growth in the beauty, personal care, fashion, nutraceuticals, outdoor, sport, pet, mother-baby, and homewares segments. As I explained on Bloomberg, this growth is driven by new lifestyle trends and consumer needs—which are shaped by influential platforms like Little Red Book (Xiaohongshu). Despite macroeconomic headwinds, these new consumer preferences present enormous opportunities for premium global brands. A few highlights from our report (which analyzed MAT up to the end of July): - Outdoor and sport product sales are up 22% on Taobao/Tmall - Mother-baby is up 7.3% on Taobao/Tmall - Beauty sales are up 6% on Taobao/Tmall, JD, and Douyin combined On a more granular level, we found enormous growth in sub-categories like baby vitamins (+52.5%), protein powder (+55%), and pet grooming products (+29.5%)—which all reflect new lifestyle trends. Please reach out if you’d like to view the report. 

Chinese consumers are swapping Louis Vuitton for Lululemon. Lululemon's recent performance in China has been nothing short of impressive. Sales are up 40% this calendar year and have already topped US $1 billion. Since 2018, Lululemon has grown from a footprint of 10 mainland stores to 130, including a new massive flagship in Beijing's Sanlitun that opened a few months ago. What makes Lululemon's strategy even more remarkable is that the brand's China prices are 20% higher than the U.S.—and products priced at 1,000 RMB (US $140) or more account for 40% of online sales. Already dominant in China's first-tier cities, Lululemon is taking that premium pricing strategy to lower-tier cities, where the company has identified a major growth opportunity. And yet headlines are dominated by this notion that Chinese spending power has cratered. Certainly, there are macroeconomic pressures—and over the last few years that's led to higher savings and the "pingti" (平替) trend, with some consumers swapping branded goods for cheaper, unbranded alternatives on discount platforms like PDD. But these headlines don't capture the full story. At WPIC Marketing + Technologies, we work with dozens of premium imported brands across virtually every product category. In many of these categories, we've been seeing "consumption upgrading"—consumers swapping cheaper alternatives for premium brands. That's especially true in categories related to new lifestyle trends like healthy living— functional food, vitamins, athletic wear, science-backed skincare, mother-baby, personal care, and more. Consumers are not "cash-strapped", they are seeking value—and they are willing to pay a premium for the things they care about. Premium brands like Lululemon and Arc'teryx are thriving because they've positioned themselves at the center of trends related to wellness, outdoor sports, healthy living, etc. They've done that through popular offline activations and strategic use of Xiaohongshu (Little Red Book), as Olivia Plotnick has analyzed. And knockoff versions of these brands are highly accessible in China—fire up PDD and take a look at the enormous selection of fake Lulu pants and Arc'teryx jackets available at bargain bin prices. They look close to the real thing—but Chinese consumers want the real thing because they believe in the brands, they care about quality, and there is even a subtle signaling effect by wearing "real" premium athleticwear. In addition to the increased focus on exercise and heating healthy, younger consumers are simply less interested in sporting flashy luxury labels—that's one reason Hermès, with its more subtle and refined ethos, has outperformed flashier luxury houses in China amid a broader industry downturn. Hope this adds some nuance to the discussion about China's consumer confidence.

At WPIC Marketing + Technologies, we're expecting massive GMV growth on Xiaohongshu (Little Red Book) over the next year. Already a crucial platform for influencer marketing (or "zhong cao"), Xiaohongshu's new strategy is to to close the loop from search/disovery to commerce—and rapidly expand their e-commerce function. Four-fifths of Xiaohongshu's 300 million users are women, and mostly from top-tier cities. Xiaohongshu already plays a key role in their search and discovery process of brands and products, especially in the beauty, fashion, and lifestyle categories. As Xiaohongshu expands it's e-commerce function, the growth runway is massive and brands need to be targeting this platform. That's why we're running a webinar early next month with Joseph Cooke, Charles Lavoie, and Olivia Plotnick—to help brands understand how they can start selling and marketing on Xiaohongshu.

Contributed my thoughts to this Financial Times piece about growth in China's second-hand luxury market. I do disagree with the framing in the headline—the rise of second-hand luxury does go back to the start of the pandemic and associated economic pressures, but a more significant factor is changing consumer preferences. Today's aspirational and high-spend consumers are buying premium brands in categories like personal care, consumer electronics, and functional wear—and also spending on experiences like eating out and travel. Consumers are still able and willing to splurge, but on products that align with new trends and lifestyles. As I've been saying, they are swapping Louis Vuitton for Lululemon. Meanwhile, the rise of new technology platforms have made it easy to shop for authenticated second-hand luxury items—and buying second-hand also aligns with emerging values like sustainability.

Xiaohongshu, or "Little Red Book," is one of the most exciting platforms in China's e-commerce landscape. For years, Xiaohongshu has served as a key platform for social discovery and recommendation, especially for beauty, fashion, and lifestyle brands. With over 300 million monthly users, it's a space where premium brands like Hermès and Lululemon thrive, leveraging authentic content and user engagement to connect with China’s highly discerning, urban consumers. Now, Xiaohongshu is investing in closing the loop from discovery to shopping, making it easier for users to purchase seamlessly within the app—and at WPIC Marketing + Technologies we believe now is the time for brands to set up stores on the platform. In our latest blog, we explore why Xiaohongshu is a must for brands targeting millennials and Gen Z in China—and how to leverage tools like KOL and KOC partnerships on the platform. Read the blog here: https://lnkd.in/gBf5aWpj