Survey reveals Red and Douyin are priority growth channels for Chinese brands

Digital agency Totem surveyed marketing leaders from 90 brands on their advertising plans for 2024. Most of these cross-section brands are global ranging from large- to medium-sized, with 80% having over ten years of experience in China.

According to the 2024 brand survey, Douyin and Red lead in positive ROI, with 46% of brands reporting gains on the two platforms. WeChat, Tmall Live and Weibo maintain above-average returns for brands. BiliBili, Kuaishou, and Zhihu fall into the category of channels that show weak brand ROI.  

When asked how they might adjust marketing spend on channels, marketers favoured Douyin and Red which indicated increased spend of 70% and 74% respectively. However, marketers seem on the fence about Tmall Live, Tmall, and JD.

Last year, when brands were asked if they were confident that their channels and platforms will play a key role three years from now, WeChat (88%), Tmall (84%) and Red (63%) ranked among the top three. This year, meanwhile, the top three are Red (89%), Douyin (88%) and WeChat (76%).  

Based on its analysis, Totem divided digital growth for brands in China into four modes,  which are platform-to-commerce (Tmall/Taobao), community-to-commerce (WeChat), excitement-to-commerce (Red/Douyin) and DTC, spanning over two decades, following a four-quadrant analysis about brand growth, converting sales, high/low quality in retaining audience. 

In terms of CRM and private traffic, WeChat (70%) leads as the top channel, while Tmall (49%) and Red (48%) closely followed.

Totem published its brand survey in its ninth annual report on China marketing and media trends. The study brings three key takeaways from the China marketing landscape in 2024:

• The new study advises that brands must reposition themselves as the Chinese economy has downshifted from growth to a new paradigm of caution and prudence.
• Marketing and sales success in China is still firmly connected to social commerce. However, the approach is not just about building hype but more about creating a foundation of assurance and trust for consumers. 
• As companies covet conversion, the rift between brand and performance marketing will be stressed again. Brands need to be positioned to have core audiences who love, trust and buy them. 

As observed by this report, middle-class consumer confidence has declined more rapidly in lower-tier cities than in top-tier cities. Before Covid, brands tapped into lower-tier consumers, while the new data from the post-Covid period tell a different story, as consumers in lower cities pulled back spending due to shrinking property prices. Totem’s report used income as a better measure of potential and also suggested that targeting may shift from city tiers to generational tiers. 

It pointed out Gen Z’s ‘laying flat’ phenomenon in China. For instance, even if Gen Z consumers  usually have essential financial support from parents and grandparents, with incalculable youth unemployment rates, Gen X and Gen Y remain core drivers of consumption.