Video apps: Customers, influencers or retailers?

In retail marketing, less is more. That’s why short-form video apps, including Douyin (a Chinese social platform similar to Snapchat), are soaring in popularity -- and US retailers should start planning to add short-form video to their marketing strategies. These apps put consumers in the spotlight by creating user-generated content that influences other shoppers – and how global marketers reach them.

Douyin’s virality is a miracle amid the competitive digital landscape in China. Within six months of launching a beta version, Douyin achieved over 100 million downloads. The snappy video app targets a gap within social video among the BAT (Chinese tech powerhouses Baidu, Alibaba and Tencent). It quickly amassed users searching for useful tricks and funny entertainment.

Diverse users make their own short videos, ranging from housewives and high school students to fashion bloggers and celebrities. Most Douyin users come from 1st and 2nd tier cities, revealing a new, urbanized lifestyle in China.

Short and sweet sells: Supermodel Angelababy’s funny video received over 490,000 likes.

 

According to iiMedia Research, short-form videos engaged 242 million viewers in China last year; experts say the figure will rise to 353 million this year, a 46% increase. Before Douyin, Chinese consumers used Kuaishou, a video app with 230 million active monthly users. However, the gap is closing between them. As QuestMobile found, Douyin’s successful Spring Festival campaign attracted over 45 million users in a single month.

Video apps go mainstream

Admittedly, mass adoption takes time. Here’s how Douyin and other video apps are trying to accelerate consumer engagement:

User-friendly training: To make video creation easier for consumers, Douyin offers simple online training and third-party tools on how to produce short, enticing content.

Predefined game model: To spark engagement, Douyin operates ‘Challenge’ campaigns. For a lipstick challenge, women carefully applied bright lipstick before voraciously devouring a mouthful of food.

Maximum viewership: Douyin applies a complex algorithm to distribute content to screens, leveraging its parent company Toutiao’s content distribution algorithm. Even users with few followers can get showcased by Douyin if their videos are interesting.

Influencers and celebrities: Fabian Bern, founder of UpLab, an agency that focuses on Douyin marketing, informed Azoya that Douyin commissioned hundreds of key opinion leaders (KOLs, as influencers are called in China) to make creative videos. ‘Some KOLs became friends and rented a house together, and create content together,’ said Fabian, because ’a 15-second short video could take over 8 hours to produce.’ When collaborating with KOLs, retailers must need a sophisticated system to select, filter and evaluate available candidates to maximize the return.

Popularity among younger generations: Aurora’s iAPP platform discovered 75% of Douyin app users are under the age of 30. These digital-savvy consumers share interesting videos they discover on Douyin with their friends.

Young video stars: 75% of consumers aged 29 and younger use the Douyin app to create short videos.

Brands and retailers get in the game

What makes video apps so popular? People tend to be in a relaxed state when they open these apps, so they may be more receptive to advertisements, making Douyin a perfect platform for digital marketing.

Douyin marketing is powerful. Last summer, Michael Kors launched a branded hashtag campaign, in which over 40,000 participants shared their creative videos. The top video earned over 160,000 likes.

Video success story: Michael Kors’ Douyin hashtag campaign attracted 40,000 viewers.

 

Viral videos on Douyin can suddenly transform products into top sellers on China’s e-commerce marketplaces. 

Recently, Douyin announced its integration with Taobao, an e-commerce subsidiary of Chinese retail giant Alibaba. A button pops up as the video starts to play, linking to a Taobao store selling the products. This integration makes Douyin a potential platform for cost-per-sales marketing; however, Douyin currently only accepts Taobao integration. While retailers can insert promotion codes or shortened links in the video, shopping buttons often convert better.

 

Azoya ran an analysis of best-selling products on Taobao with the keywords ‘Popular in Douyin.’ Most items are toys and accessories valued below 50 RMB ($8 US). The low price point means Douyin may not immediately be suitable for per-transaction based marketing.

High volumes, low prices: The top 8 products branded with “Popular in Douyin,” tend to be priced

below $8 US, which aligns with the app’s young audience.

Mobile leaders Alipay and Xiaomi also launched their official Douyin accounts to share behind-the-scenes videos with fans. Created with handheld mobile phone cameras – not ‘agency-level’ photography – the videos’ end result is shaky, obscure content. Yet audiences love the raw candidness and refreshing lack of pretention. The authenticity bridges the gap between brands and customers, strengthening brand trust.

How companies can stand out
To effectively connect with consumers using short-form video apps, retail companies should:

  • Emphasize unique products and experience that could convert viewership to sales
  • Build trust with live videos that look real, not orchestrated
  • Resonate by communicating the message as a person, not as a brand

Since short-form video apps are hot in China, it’s only a matter of time for Western markets to follow. To stay relevant, retail companies can create their own videos and encourage user-generated content to make their multimedia marketing strategies more robust and engaging.

Franklin Chu, managing director of Azoya USA, is an expert in China cross-border e-commerce.  Franklin also serves as President of Sage Capital Group Inc. a private equity and investment management firm and is a graduate of Yale University and Harvard Business School.