What the World Needs to Learn From Chinese Content Commerce: Part Four

    As gaming goes mainstream, players include members of the crucial higher-income demographics, and brands across the consumer spectrum are taking note.
    A growing number of luxury brands are turning to virtual idols as a controversy-free way to reach young audiences. (Image: Hololive)
      Published   in Retail

    In this five-part series, Jing Daily looks into the lessons that every brand should learn from the evolution of content commerce in China since the start of the Covid-19 pandemic in early 2020. We will publish one piece every week, with the full series to be made available for download as a PDF. If you missed Part One of the series, you can give that a read here, and check out Part Two here and Part Three here.

    Strategy 4:#

    Gaming, the ACG Community, and Virtual Idols#

    Globally, gamers have progressed far beyond the old stereotype of shut-ins spending hours glued to their monitors. As gaming goes mainstream, players include members of the crucial higher-income demographics, and brands across the consumer spectrum are taking note. China’s gaming industry brought in $43 billion in revenue in 2020, up nearly 21 percent from the previous year, with the mobile gaming sector representing more than three-quarters of the total.

    According to Newzoo, 42 percent of gamers are millennials (age 23 to 38), with Gen Z coming in second at 20 percent. These two groups have become the main drivers of China’s luxury goods market, with Gen Z consumers showing particular promise. According to a recent study by L Catterton, those born between 1996 and 2010 make up an estimated 17 percent of China’s population but account for a quarter of total expenditure on new brands. It’s no surprise that brands now see games — and gamers — as worthy of their attention.

    The love affair between high-end brands and the world of gaming has been brewing for nearly a decade. Characters from Final Fantasy were featured in a 2012 Prada campaign, as well as in ads for Louis Vuitton in 2016, while Moschino launched an in-depth collaboration with The Sims in 2019, creating an in-game and matching real-life capsule collections.

    The Power of ACG#

    But luxury-gaming collaborations have begun to fully hit their stride in the past 18 months, particularly among brands interested in tapping the growing spending power of China’s ACG (Anime, Comic and Games) subculture, with Louis Vuitton’s well-received collaboration with League of Legends in 2019 a key moment. In November 2020, Burberry announced a deal with Tencent Games’ Honor of Kings, which was scuppered at the last minute in March 2021 after the British brand was caught up in the Xinjiang cotton controversy. Meanwhile, New York’s Metropolitan Museum of Art and Tesla partnered with Game for Peace, Tencent’s Chinese mobile version of PlayersUnknown Battlegrounds to offer custom game modes and skins, respectively.

    Over the past decade, China’s ACG subculture has gone increasingly mainstream, emerging as one of the most important channels for reaching millennial and Gen Z consumers. The size and rising spending power of China’s ACG community has attracted a flood of brands — mostly in the consumer technology, food and beverage, and sports sectors — looking to launch brand collaborations or integrations. Big names like Nike, KFC, Maybelline, are among the scores that have increased their investment on platforms such as Bilibili to reach its audience in meaningful ways, but one segment that has yet to make a strong move is luxury fashion — likely owing to the perception that ACG fans lack sufficient spending power to significantly boost demand.

    However, a handful of premium brands have experimented with Bilibili, among them Shiseido, which produced a livestreamed product launch/variety show in May 2020 that racked up 1.34 million engagements. Others, including Chanel Beauty and Gucci, have invested in ads shown on the Bilibili opening screen, while Fendi launched a promotional campaign across its personal and discovery feeds.

    Gucci collaborated with the Japanese anime and manga series “One Piece” in 2020. (Image: Gucci)
    Gucci collaborated with the Japanese anime and manga series “One Piece” in 2020. (Image: Gucci)

    Luxury and ACG: An Unlikely Pairing#

    There are signs that luxury brands are becoming more comfortable with the ACG market, both in China and globally. In 2020, Gucci unveiled a collaboration with the Japanese anime and manga series “One Piece” by way of a “lookbook” published in the Chinese Ellemen magazine, featuring the characters Luffy and Zoro dressed in pieces from the brand’s Fake/Not collection, a throwback to its 2013 work with the manga Jojo’s Bizarre Adventure.

    Meanwhile, Dior featured virtual influencer Xuefei Nova in a cyberpunk film that blended the real and animated worlds. It’s only a matter of time before more luxury giants start chasing the rising spending power of China’s ACG enthusiasts, taking a cue from the consumer brands that paved the way.

    In China’s current “new normal,” marked by recurring clusters of Covid-19 cases, strict disease control measures, and a slower-than-anticipated vaccine rollout, consumers will likely continue to spend more time indoors glued to their smartphones, and brands cannot afford to ignore the opportunity to meet consumers where they are — via the platforms and types of content that engage them.

    Like video games, luxury and fashion are, at their core, based on escapism. Brands should seek to be involved in the mesmerizing popularity of games by entering them strategically and becoming part of their immersive experiences, rather than merely inserting disruptive in-game ads. It’s a five-star marketing strategy. In this arena, China once again provides validation for smart esports and gaming collaborations.

    Virtual idol Luo Tianyi "co-hosted" a campaign with livestreamer Li Jiaqi in April 2020. (Image:
    Virtual idol Luo Tianyi "co-hosted" a campaign with livestreamer Li Jiaqi in April 2020. (Image:

    Virtual Idols#

    Cross-dimensionality is also extending into the way brands market themselves in China (and globally) with the rise of computer-generated “virtual influencers” or “virtual idols,” which resonate deeply with China’s digitally native Gen Z demographic. Brands seeking to reach this group of consumers are increasingly turning virtual idols to represent their products.

    This trend accelerated in 2020 with the onset of the Covid-19 pandemic, which shut down or sharply curtailed video production on a global scale. Pioneering brands are turning to computer-generated spokespeople to promote their products, while avoiding some of the downsides of working with real-life celebrities and influencers, such as high costs, difficult egos and potential personal controversies.

    In the West, virtual influencers are a relative novelty, exemplified by standout examples like Lil Miquela (a virtual teenage girl with 3 million Instagram followers who has “worked with” the likes of Calvin Klein and Prada) and Kentucky Fried Chicken’s “Virtual Colonel,” a version of Colonel Sanders created by Wieden + Kennedy. Given a youthful makeover and playing the role of a stylish jetsetting influencer, the Virtual Colonel has collaborated with brands like Dr Pepper, Old Spice, and TurboTax.

    But where virtual influencers are a curiosity in the West (albeit one we will undoubtedly see more of in the years ahead), in China they are already a well-accepted part of many brands’ marketing strategy. Xing Tong, a virtual idol in Tencent’s QQ Dance game, was partnered with Beijing-based sportswear brand Li Ning as a brand ambassador and appeared in a Levi’s campaign during Shanghai Fashion Week in 2019. It’s a win-win for all parties involved — Li Ning and Levi’s are able to reach Xing Tong’s millions of real-life fans, while Tencent Games gains a new income stream from the creation and licensing of its characters.

    Virtual influencers have even become headline acts of major events, such as Bilibili first all-virtual version of its annual BML (Bilibili Macro Link) concert in December 2020, and Kuaishou’s “cross-dimensional” Spring Festival concert in February 2021, which brought together real-life performers like folk singer Tengger and computer-generated artists like AC Niang (the “face” of Kuaishou-owned anime platform ACFun). Kuaishou also invited singer Huang Zitao to debut his own digital avatar “Selu,” part of a growing trend of celebrities spinning off virtual versions of themselves on various platforms.

    Virtual influencers are also becoming a valuable tool for brands interested in taking advantage of China’s e-commerce livestreaming boom. In May 2020, Tmall’s Youth Lab brought together five top virtual stars — including China’s top vocaloid, Luo Tianyi — for a special via Taobao Live. The idols interacted with fans during the broadcast while promoting goods for global brands such as Bausch & Lomb and L’Occitane. The one-hour show reached a peak viewership of 2.7 million with extremely high engagement: nearly 2 million viewers participated in an interactive segment to try to win prizes.

    The boom has even extended into popular China’s competition reality show sphere, with streaming platform iQiyi aiming to mint the next generation of China’s virtual idols with the show “Dimension Nova” (跨次元新星), which premiered in September 2020. The program offered a new take on the popular idol competition format, with actress and social media celebrity Angelababy and rapper Xiao Gui among the mentors who formed teams and offered feedback on the singing and dancing skills of the virtual contestants. For brands, this type of program offers multiple opportunities for brand sponsorships and collaborations with both the virtual idol contestants and their celebrity mentors.

    Discover more
    Daily BriefAnalysis, news, and insights delivered to your inbox.