2022 The China Outlook

Jan 26, 2022

The five market trends to look out for in 2022 are Marketing & Advertising, Technology, Tourism, Education, and Consumer Goods.

Marketing & Advertising

Keywords: short videos, social media advertising, e-commerce marketing

As China-focused specialists, we've witnessed some truly exciting changes that had profound implications on the industry in 2021, including the continued rise of short videos, social media advertising, and e-commerce marketing as the most valued digital marketing mediums.

These trends show no signs of slowing down. According to the "Report of Chinese Digital Marketing Industrial Trends 2022", 79% and 77% of advertisers will increase their investment in short video marketing and social media marketing.

For all social media marketing advocates, 70% will continue to place their confidence in KOLs and KOCs, while over half are willing to buy more social media paid ads.

The amended Chinese advertising laws (which came into effect only recently) and some of the latest crackdowns on tax-evading leading KOLs appear to send some mixed signals into the market. But we believe, given the livelihood of the Chinese digital landscape, the new laws will create a more vibrant and fair environment in China’s digital marketing industry in 2022.

Short video marketing will see a big increase in 2022 as marketers invest more


Keywords: Metaverse, gaming, e-commerce, retail

Metaverse is one of the most talked-about themes in the 2021 Chinese technology sphere. We noted that a wide range of social sectors, both public and private, in China are picking up the pace in integrating VR/AR-driven technology to provide a better experience for consumers.

The Metaverse has found its way into the official political discourse put forward by both the central government and local governments. It’s viewed as the next major growth driver in the economic transformation. According to Daiwa Securities Group, the size of Metaverse-related industries is expected to reach 30 billion USD by 2025.

In the private sector, gaming is leading the Metaverse race, as a response to the much-regulated video game market in 2021 and is eyeing for exporting to other markets. E-commerce and retail are also swiftly adopting the Metaverse in a bid to provide a unique digital shopping experience to Chinese consumers, in preparation for the post-Covid consumption rebound.

Gaming is leading the Metaverse in China


Keywords: Reopen

Tourism, especially outbound international tourism, is the industry that was, and still is, hit hardest by the ongoing pandemic. However, after over two years of draconian travel restrictions, we believe we are finally seeing some light at the end of the tunnel.

It’s widely believed in the industry that China will relax at least some of its travel restrictions as soon as mid-2022, after the Winter Olympics and the national Two Sessions, both will be held in Beijing.

The China Civil Aviation Bureau issued a statement last week, designating 2022 as a "period of recovery and accumulation" and 2023-2025 as a "period of growth and release".

The pent-up demand for traveling internationally for leisure, education, and business is huge in China. We can predict that such demand will see a quick and powerful release in 2022, so get ready to capitalize on this.

2022 is the main period of recovery for travel


Keywords: Adult education, non-curriculum education, international education

The most unexpected industry-wide shift in 2021 was seen in K-12 education. The sudden release of new rules effectively killed off the 110 billion USD off-campus tutoring market and sent shockwaves across the entire education industry.

In 2022, we believe the online tutoring industry as a whole will figure out a way to restructure, with capital and attention being diverted to adult education and non-curriculum, experiential, specialised education programmes being developed for K-12 students to meet the demand of rapidly growing Chinese middle-class families.

International education, particularly graduate and post-graduate degree programmes, have not been impacted either by the regulations or the pandemic. According to our research, less than one in ten students said they’d changed their minds about pursuing a degree overseas at the peak of the pandemic in 2021. Therefore, we are confident that it will continue to remain in high demand in 2022 and beyond.

International education is here to stay

Consumer Goods

Keywords: "China-chic"

The dialed-down scale of import and strong governmental initiative during the past two years due to the pandemic gave rise to a new generation of local Chinese brands. This trend is most evident in the consumer goods sector (beauty, fashion, luxury goods, electronic appliances, etc). A new term, “China-chic” has been coined for this phenomenon.

These “China-chic” brands have been quickly gaining popularity among Chinese young millennials and Gen-Z consumers because of the high quality of their products and the uniquely tailored branding that has been designed specifically to appeal to Chinese consumers. Even though they are relatively young, we can see that they are gearing up to take on some of the biggest brands in the world, and will increase competition in China, meaning international brands will have to focus more on localizing for China.

What global brands should be aware of is that simply being present in the market no longer guarantees sales and brand awareness. In the consumer goods categories, China is becoming an open race between domestic brands and global ones, with global brands having to pay more attention to what these “China-chic” brands are doing in terms of marketing and audience activations.

China-chic brands will give international brands a run for their money

On January 15th 2022, Lou Jiwei, the former Minister of Finance for China and now chairman of the Global Asset Management Forum, made a public speech in which he envisioned China’s economic outlook in 2022. “Continue opening up” is the key phrase. This speech is the first, and an important one to signal what we should expect from China in 2022.

We have every reason to believe that despite the fact that we are entering the third year of the coronavirus pandemic, it will be an interesting year for China and the brands doing business in China, what won't change is the 1.4-billion-person market that makes China the most exciting and rewarding place to do business.

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