SHANGHAI, China — Tech Buzz China Podcast co-host Rui Ma is used to non-Chinese tech users misunderstanding Bilibili. Even experienced investors have written to her, perplexed.
“There’s no real analogue here,” says San Francisco-based Rui. “It’s so different from anything in the States,” although high-profile celebrities including Dwayne "The Rock" Johnson, Justin Bieber and YouTuber NikkieTutorials have all joined the platform. When she visited the social media platform’s investor relations department last year (it listed on Nasdaq in 2018), an employee described it as "the YouTube of China" (a label the company has not adopted for itself).
“Out of the Chinese social media platforms, it’s probably the closest thing you can get to YouTube,” said Lauren Hallanan, the head of marketing at WeChat management firm Chatly. But beyond the online video sharing element, the comparison doesn’t feel quite right. And in a market crowded with fast-growing video-centric apps, Bilibili has attracted investors and partners in Alibaba, Tencent, Louis Vuitton and Tesla, while growing at a relatively modest but steady pace.
What sets it apart from the competition, and what do brands and marketers need to know before signing up?
Tuning Into Generation B
Bilibili has roots in China’s ACG (Anime, Comics, Games) industries but has grown into categories like fitness, beauty, lifestyle, fashion and music. Its origins laid foundations for a quirky, loyal user base that differentiate it from other players in the video space. “The community-feel on there is much stronger than most Chinese social media platforms,” said Hallanan.
The digital sphere provides brands with a lucrative opportunity to target soon-to-be big spenders.
Where YouTube generates the bulk of its revenues through advertising, Bilibili generates around 50 percent of its money from game licensing; live streaming and 'value-added services' (such as its premium membership program), advertising and e-commerce make up the remaining 25 percent, 13 percent and 12 percent respectively.
While China’s fast-moving tech landscape is littered with user-generated video platforms, Bilibili is the most popular app among the country’s “Post-’90s” cohort by data intelligence service Questmobile’s estimates. The site’s 128 million monthly active users (as of 2019’s Q3) do pale in comparison to YouTube’s 2 billion as of last May, but the platform’s core demographic (78 percent “Post-’90s”) and average daily screen time (83 mins) reveal that audiences are very young and very engaged.
With global management consultancy Bain predicting that China’s Generation Z (often cited as being born between 1997-2012) will account for more than 55 percent of the mainland’s luxury consumption by 2025, the digital sphere provides brands with a lucrative opportunity to target soon-to-be big spenders. A year after Bilibili inked a partnership with Alibaba to help streamline its content-commerce operations in 2018, the retail giant bought an 8 percent stake in the platform — the company remains one of the few to count both Tencent and Alibaba as investors as the mainland's tech giants work to woo younger users.
"All the other platforms don’t have a Gen Z focus," said Ma. "Bilibili users are the most creative, engaged and trendsetting audience in China."
From ACG to Fashion and Beauty
Last November, Louis Vuitton partnered with Bilibili to develop an AR filter for users to transform themselves into a character from hit Tencent-owned fantasy video game League of Legends (LoL). The following month, the brand launched its capsule collection in collaboration with LoL, and Bilibili signed a £113.1 million, three-year-long deal to exclusively broadcast the game’s Superbowl-sized world championship events.
The deal was Bilibili’s bid to draw Chinese LoL players to its space (as opposed to local rivals like eSports-focused Huya and Douyu), but Louis Vuitton, which has previously sponsored the championship event, isn’t the first fashion or beauty brand to tap into the big business of gaming (the brand did not respond to BoF’s request for comment). Last year’s successful M.A.C. crossover with the mobile game Honour of Kings is a prime case study for brands hoping to enter the gaming space. “Brands who are looking to do something similar really have to leverage Bilibili,” added Hallanan.
Bilibili has emerged as an alternative for homegrown beauty brands in particular.
This means linking arms with the platform’s scores of well-regarded key opinion leaders (KOLs), who are known on it as uploaders, or Upzhu. Though WeChat and Xiaohongshu have become the default Chinese social media platforms for fashion and beauty brands and KOLs, Bilibili has emerged as an alternative for homegrown beauty brands in particular. The likes of Marie Dalger and Girlcult Cosmetics have tapped Bilibili’s content creators for product seedings and sponsored posts, and the platform has become home to a host of quirky, creative fashion and beauty personalities who often deviate from China’s wanghong norms.
Take plus-sized beauty influencer Hannah, Benny Dong (the face of his own beauty brand Croxx), up-and-coming singer Lexie Liu and hanfu-clad creator Shiyin, whose hit videos include one of her visiting the European Commission in the traditional dress. While Western audiences may take the likes of Hannah for granted, plus-sized KOLs are few and far between in the mainland, noted Hallanan. “I think [Bilibili creators] conform a bit less to the latest content trends,” she said.
The Bigger Picture
Bilibili has grown slowly compared to its peers, but this seems to be paying off. “In general, they’ve done better in terms of stock performance than most of the other companies that went public in the same year,” said Tech Buzz China’s Ma. Though the platform only kicked off monetisation efforts in 2015 and “[was] thinking very little about revenue,” its Chief Executive Rui Chen has publicly announced intentions to propel growth by expanding into other verticals that would appeal to its core audience.
When Bilibili published its latest round of earnings in November 2019, net revenues hit 1,859.0 million yuan (around $265.2 million), a 72 percent increase from the same period the year prior. Live-streaming and ‘value-added services’ including a premium membership program saw revenue growth of 167 percent from 2018, which the company attributed to its amped-up monetisation efforts. When Bilibili releases its fourth-quarter earnings on March 17, investors expect to see a further surge in traffic as users stay home to avoid contracting the coronavirus.
Even so, the company is unlikely to become a video platform for the masses. “[It] could have already become very mainstream a long time ago, but their growth has deliberately been a lot slower than other Chinese social media platforms,” Hallanan said. She noted that the approach will help retain Bilibili's valuable community identity and loyalty, even if unpopular with investors (particularly as rival Bytedance racked up $7 billion in revenues for the first half of 2019).
Bilibili has grown slowly compared to its peers, but this seems to be paying off.
“My feeling is [that] no matter what, they’ll try to keep the community more engaged and not have it become overrun with all types of content,” Hallanan said. And though a company spokesperson did not rejected the idea of expanding beyond China, Bilibili has yet to announce plans to do so.
For global brands considering it as a marketing tool, metrics may appear underwhelming — follower and view counts are lower on the site compared to other social media platforms Weibo, Douyin and Xiaohongshu, but it also doesn’t have as much of a problem when it comes to fake followers and bot accounts.
Like Louis Vuitton’s eSports ties, it is important for brands to establish a strong connection with Bilibili’s user community before investing in campaigns and sponsored posts. Campaigns should adopt the vocabulary and mindset of “Post-’90s” users within the Bilibili ecosystem, which Ma calls “the birthplace of Chinese memes.” This means that relying on the celebrity-centric rulebook adopted for platforms like Weibo, WeChat and Xiaohongshu won’t cut it.
A brand-platform mismatch (Chanel’s lukewarm Douyin campaign from July 2018 is a case in point) could waste time and dilute brand equity. Mature heritage luxury brands should ensure that their “Post-’90s” angle (ACG-related or otherwise) is believable. “It makes a lot of sense for international fashion and beauty brands to use Bilibili, but the brand has to fit this playful, quirky style,” said Ma.
Though trite, content needs to be authentic. “Audiences expect more from vloggers and creators and content tends to be long-form, so brands really have to try and understand the demographic,” said Hallanan. “Because it’s a stronger community, you don’t want to anger them.”
FASHION & BEAUTY
Shanghai Fashion Week Goes Digital
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JNBY Owner Reports Slowing Growth
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TECH & INNOVATION
Live Streaming Gains Momentum as China Stays Home
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CONSUMER & RETAIL
Hong Kong Retailers Stage Unprecedented Strike
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Will Coronavirus Change Chinese Consumers’ Luxury Appetite?
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POLITICS, ECONOMY, SOCIETY
Chinese Government Unveils First Wave of Economic Assistance
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A Courier’s Life in Wuhan in the Time of Coronavirus
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