COVID-19 // China POV Vol.8

1
Havas Group China
August 10th 2020
EDITION
2020 #8

2
In this edition
Key market developments
• Economic outlook
• Consumer behavior developments
• Key category outlooks
• Havas POV
China advertising market
• Advertising market development
• Media consumption update
• Media market news
• Campaigns worth mentioning
• Havas POV

3
Economic outlook

China’s Q2 GDP rebounded to 3.2%. Some sources upgrade the
year GDP forecast to 2.5% from around 1.5% earlier
4
GDP growth rate fast recovered to 3.2% in Q2 after the hard hit
China GDP Growth Rate
6.8% 6.7% 6.5% 6.4% 6.4% 6.2% 6.0% 6.0%
-6.8%
3.2%
2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2
“China’s economy will grow 2.5% this year
according to UBS Group AG, which raised its
forecast from 1.5% due to the recovery in
domestic consumption and strong investment”
—— UBS / Bloomberg
Source: National bureau of statistics, Bloomberg, Asian review
“The steady economic recovery in the first half
has laid a solid foundation for a sustained
recovery in the second half ”
—— NPC spokesperson

As a result, Chinese live with the new normality confidently and
optimistically
5Source: National bureau of statistics, Bloomberg, Asian review
I believe that the recovery after
the crisis will be fast
(vs. 36% global)
77%
COVID-19 has limited
impact to their
finance
88%
I am optimistic in China
to overcome COVID-19
92%

China retail market growth is gradually recovering
Domestic retail market keeps recovering despite growing
inter-country relationship tensions
6
Retail Market YOY Growth Rate
9.6% 8.9% 9.0% 8.3% 8.4% 8.5% 7.6% 7.8%
-20.5%
-15.8%
-7.5%
-2.8%
-1.8%
Source: National bureau of statistics, South China Morning post

Multiple positive vaccine developments contribute to confidence
and hope for a better economic rebound
7
There are now 5-6 first generation coronavirus vaccines
globally led by China, US, UK and Russia, expected to be
ready in 2021
At end of July, Tianjin-based CanSino Biologics published
results from an early-stage clinical trial showing that its
vaccine is safe and can trigger an immune response.
China’s Shanghai Fosun Pharmaceutical Group and
Germany’s BioNTech on Wednesday began clinical trial
of its novel coronavirus vaccine candidate
Source: South China morning post

As a result, brands massively focus for business growth, like
Chinese V’day campaigns with intensive support
Source: BCG
Valentines campaigns Special editions exclusively for China
Dior campaign by the Nine
Swarovski X Palace museum
Valentino popup WeChat store

Also confidence is shown by brands long term investments,
as new store openings and business initiatives are being launched
9Source: 36KR
Opening IKEA new O20 stores: Ikea city
Link shopping, restaurant, discount
voucher, etc. to its mini programs
Burberry launches the first comprehensive
O2O retail experience in luxury

10
Consumer behavior
developments

Chinese keep buying more online, though offline footfall has
almost recovered to pre-Covid level in well virus-controlled cities
11
5150
billion
China H1 online sales
(RMB)
7.3% online sales growth
rate in H1
5.6% share increase of
online real product among
total retail sales in H1
Source: National bureau of statistics, Savills research, Mob Tech
lockdown measures
remain due to the
second round of virus
offline footfall boosts
due to high attraction
of tourists and buying
luxury domestically

The live streaming industry keeps booming while more strict
regulations are launched
12
China’s first set of regulations for the livestream ecommerce took effect on 1 July. It restricts misleading advertising on livestreams
and requires real-name verification from both merchants and individual live streamers
Source: Linkedin

Chinese cultural elements continue to be more appreciated after
COVID-19, mainly driven by young consumers
13
Sales of Hanfu (Chinese traditional
outfit) rose 300% on Pinduoduo
between January and June this year
Baidu index of “New Chinese goods”
sees climbing recently
新国货
Online Chinese goods market share
keep increasing year by year
Post 95 is the main driver
Growth rate by age
Market share by age
Source: CBN data

Second-hand luxury market was activated during COVID-19,
big potential to be further unlocked
14
Secondhand EC platform
• ZHIER increased its DAU 82.4% yoy,
• HONGBULIN increased its DAU 40.4% yoy
• SECCO also see significant user increase on second
hand luxury during COVID
5%
28% 31%
22% 26%
China Japan US France UK
Secondhand luxury sales share of total luxury market
47%
11%
9%
26%
7%
Value for money Like vintage
Sustainability Limited edition
Others
11%
13%
52%
24%
<19 y.o. 19-29 y.o. 29-36 y.o. >36 y.o.
Secondhand luxury
market share by age
Secondhand luxury
market purchase reason
The market is dominated
by young audiences
Value for money as the top
reason to buy secondhand
Source: Yousheyipai APP

Source: China skinny
Cosmetic sales continues to grow with anti-pollution cosmetics
becoming a must-have
Cosmetic industry new regulation, effect from Jan 1st, 2021
• Enhanced Compliance Obligations for License Holders
The soon-to-be-implemented regulation places significant requirements
on cosmetic license holders, making them responsible for compliance
obligations related to the cosmetic products they make and sell
• Stimulation of Innovation for New Ingredients
the new regulation requires only certain high-risk new to be approved
by the regulatory authority. Applicants of other unlisted new ingredients
only need to go through a simplified notification process
• New Rules for E-commerce Platforms
e-commerce operators should record and verify the identity of cosmetic
distributors or retailers that trade on their e-platforms, and suspend
retailer’s ability to engage in EC service
• Outstanding Questions under the New Regulation
The regulations specifies what types of products fall within this realm to
a certain extent
Anti-Pollution cosmetics become a ‘Must-Have’ for
Chinese consumers in all segments including hair care
Consumer anti-pollution awareness is increasing, and they are linking
pollution, outdoor and indoor, to their skin issues like skin sensitivity

Source: China skinny
Rising consumer interest for elderly-care property concepts
241 M
486 M
2017 2050E
China’s over-60 market is
expected to be double by 2050
Elderly people(>60 y.o.) market
17.3%
36.0%
Population
Population
share
Elderly market
Family life
Career
Age
Entry level Career climbing Career mid-late stage Retire/re-employment
Give birth to child Raise children Kids being independent Have grand children
Get married Family life
Take care of parents Take care of yourself
Spare time Pass away
Elderly people equipment & daily use products
Entertainment
Aged finance
Travel
Aged organization &
professional service
Nursing
Interest consumption
Remarried
Elderly-care property
Funeral and interment service
A big pension market to be further unlocked

17
Key categories outlook

Luxury brands are seeking growth on platforms relevant for young
audiences
19Source: BCG, Chozan
140% YoY increase of new account openings of luxury
brands on Douyin and RED in April and May
Dior open Bilibili official account in June 2020

20Source: BCG
Luxury brands get even more active on social media
In the three months through
June, average engagement on
luxury Weibo account posts, a
proxy for brands’ social media
spending in China, increased
230% compared
2019 same period
Kering saw China sales increase
40% Q2 vs. 2019 same period,
LVMH was up 65%
LV 2021 spring summer
show on Weibo
Gucci Chinese V’day
campaign on Weibo
Chanel beauty boy line on
WeChat

Jewelry brands start to cooperate with young celebrities to refresh
brand image and attract young audiences
TIFFANY CARTIER CHOW SANG SANG
Tiffany announced Jackson Yi (易烊千
玺) as brand spokesperson
on 6.3
Cartier continued cooperating with
Meiqi Meng (孟美岐)&Vin Zhou (周震
南) on 6.6 &6.7
Chow Sang Sang announced
Alan Yu (于朦胧) as brand friend
on 6.15
PIAGET
Piaget announced Haoran Liu
(刘昊然) as brand ambassador
on 7.20
21

The domestic travel recovered to 80% driven by summer holidays,
booking lead time is dramatically shorter due to COVID-19
23
80% of domestic travel recovered
compare to last year summer period
4 times higher on flight search
in July vs. Jun
50%+ travelers are below 30 y.o.
Source: Qunaer, forward keys
68% of people booking lead time is less than 4 days
After a 172-day hiatus due to the coronavirus outbreak, China has greenlighted the resumption of tours that
cross provincial boundaries on Jul 14th.

#88元随心乘#
“88 Take any train you want”
#66元任性飞#
“Take any flight as you wish”
• Half year card: ￥88 can be exchanged
for 10 times of tickets discount in 12306
mini program within Alipay and￥200
will be deducted from the total cost.
• Train biweekly card: limited 60,000
cards. Get 4 times discounts for 14 days.
People can buy domestic flights
below￥500 for only ￥66; If the
ticket price is above ￥500, tourists
need to make up the difference to
buy.
Alibaba's Alipay and Fliggy promptly launched special offers for both
plane and train ticket, targeting relaunched domestic group travel
• The promotion is tailored to families living apart, commuters flying to and from work, and excursion on weekends.
• Such budget promotion will change people’s travel pattern and will definitely help fulfill their desire to explore the country in an
affordable way.
24

Hainan is becoming the top travel destination, as well as a new
luxury shopping paradise
25
The first month(Jul.) of a new 100,000 RMB
individual duty-free allowance coming into
force, Hainan has seen its offshore duty-free
sales surged to 2.2 billion RMB
Source: Qunaer, forward keys, Xinjingbao

The “Free Flying” promotion may be aiming to meet three primary objectives:
✓ First is the sorely-needed cash flow: Because this is a prepaid product, the airline is able to amass enormous revenue before the passengers use its service.
✓ The second objective is to optimize flight occupancy.
✓ Lastly , “Free Flying ” product also play a lot of advertising effect for airlines.
Chinese Airlines offer “Free Flying” promotion to boost domestic
travel and increase flight occupancy
HNA airline : ￥ 2,999 unlimited to flight in and out
Hainan within half a year, and extra offer￥2,880 of
CFS Duty free voucher and 10 kg of free baggage
allowance.
China Express: ￥2,999 covering more than 100
destinations in China. It is available both on weekends
and weekdays until Oct 24th.
Chunqiu airline: ￥2,999 not limited for service time,
destinations, and number of times through the end of
the year.
26

More foreign airlines resume flights to China
27
KLM Royal Dutch Airlines resumed passenger flights on 22nd July
following the relaxation of travel restrictions by the Chinese
government.
Apart from KLM, other foreign carriers such as Air New Zealand,
Delta, United Airlines, Air France, Lufthansa, Swissair, Aeroflot and
Turkish Airlines have also resumed flights to Shanghai. Finnair
restored flights between Helsinki and Shanghai on July 23.
Additional airlines, such as Etihad Airways, have announced dates
to restart flying to Shanghai.

In July RT-Mart and Hema Fresh develop community-customized
mini shop to approach consumers at last mile
29Source: IFengNews（凤凰新闻）&北京商报网
Hema Fresh opened two Hema mini
in Beijing to explore community shop marketing
RT-mart developed
community-customized mini shop
Traditional supermarket began to upgrade business
model in the direction of community-customized mini
shop, which can solve consumers’ demands at last mile.
RT-Mart supermarket developed RT-mini, which
provides 3 dinners on basis of fresh food and local
specialties, on July 15th, 2020 in Nantong.
On July 6th, Hema Mini settled in Beijing after 1-year
operation in Shanghai. Compared to Hema Fresh,
Hema mini has added Beijing local food, minimized
dining area, increased the proportion of instant food
and applied daily food to replace high-price food.
With support of Hema Fresh supply chain, Hema mini
is more flexible and convenient. Sales per square meter
of Hema Mini is six times larger than Hema Fresh.

Heytea and Nayuki widen food category, and new retail category
will be the new normal for them
30
Heytea: Utilizing New Retail Industry
Nayuki: Optimizing offline experience and
strengthen online precise operation
Nayuki started new retail business this year. To be
specific, it successively developed frozen-dried yogurt,
frozen-dried fruits, cookies and tea gift box, which are
health driven and easy to carry. Besides, it opens
online channels such as WeChat mini-program, Tmall
store to reach more consumers.
Frozen-dried snacks Tea Gift Box
Heytea registered trademark for its food and instant
food, including popcorn, rice bread nuts and so on.
Previously, Heytea established Heytea Lab in Shenzhen.
Recently, Heytea developed chips by cooperating with
Shake Shack and cooperated with Airbnb to provide
real time experience for consumers.
Heytea x Shake Shack
Heytea x Airbnb

In June car sales continue to recover, exceeding even 2019 and
2018 monthly sales
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2018 2,809 1,718 2,656 2,319 2,288 2,274 1,889 2,103 2,394 2,380 2,548 2,661
2019 2,367 1,482 2,520 1,980 1,848 2,056 1,808 1,958 2,271 2,284 2,457 2,658
2020 1,927 310 1,430 2,070 2,194 2,300
0
500
1,000
1,500
2,000
2,500
3,000
Monthly car sales in China
32
• The auto market continued to recover in June, both MoM and YoY sales are growing, while the monthly growing
rate is slowing down.
• The YoY growth in SUV sales (+11%) and minibus sales (+26%) are still the main drivers for the increase of overall PV
sales.
• The NEV sales in June continue to drop significantly (-38.5% vs. last year), which is mainly due to the reduction of
national subsidy.
Source: China Association of Automobile Manufacturers (CAAM),China Passenger Car Association (CPCA)
Unit: Thousand

Auto and Tech brands rush into joining the playground of
autonomous driving
33
• Basing on Deloitte, China will have the world’s most
autonomous vehicles of 30 million in operation till 2030,
which indicates the great potential of China autonomous
driving market despite the challenges in current stage.
• Didi has made its self-driving debut in Shanghai on June
27th. Didi also plans to hire 200+ employees this year to
strengthen its autonomous driving division.
• Tesla is building an autonomous driving team in China and
will complete the L5 basic functions this year, said CEO
Musk on July 9th.
• Huawei then released a patent for autonomous driving
system on July 10. This patent is for autonomous driving
system that sets driving strategies based on historical and
real-time environmental data.
Source: Gasgoo
Didi launched autonomous driving service in Shanghai

34Source: Tencent news, Baojun Weibo official account
A consumer complains
about gearbox problem
on the show.
• During the 3·15 consumer rights gala held on July
16th, Baojun 560 – a model car from SGMW joint
venture, was criticized for its gearbox breakdown
problem.
• The gearbox problem of Baojun 560 has been
long existed. The company had recalled 32000+
units and consumers also had the malfunctioned
cars repaired at their own expenses, but all in
vain.
• After the exposure, Baojun quickly released an
apology and vowed to take responsibility for the
issue at all costs.
Baojun official statement
with apology and
commitment
Baojun was critized during the 3·15 consumer rights gala

35
Havas POV

36
Rebounding consumer’s spending, while competition being
back at full force, drives the need for longer term approaches
• GDP and domestic retail recover better than expected. Many categories show positive
developments over the last period with growth expected back already now in Q3 and Q4.
• This also attracts competition, with more intensity and unexpected tactics. Including more
international brands focusing on recouping business here and shifting investing to China.
• At the same time, when lacking real longer-term initiatives, competitors continue uplifting their
(mostly) digital activations including live stream and EC festivals. It has become more difficult to
push on activations only as many brands have followed this path, while more brand pull power,
new relevant offering and differentiation is needed to keep on growing the months/years ahead.
• So brand building and real innovation, versus one offs EC festivals, live stream and special
editions (cosmetic innovation) are important to drive organic sales and profitability.
• Which means real innovations based on longer-term pre-Covid existing growing consumer needs,
sometimes accelerated or distracted by Covid, like health, cosmetics, O2O and elderly care are
needed.

37
Advertising market
development

While YTD ad spend remain below 2019, we see a significant increase in spend
as advertising activities return in line with the overall economic recovery
Month by month comparison
51,303
49,337
38,803
10,000
20,000
30,000
40,000
50,000
60,000
2018 May 2019 May 2020 May
YTD vs YTD comparison
257,443
232,012
168,059
50,000
100,000
150,000
200,000
250,000
300,000
YTD 2018 YTD 2019 YTD 2020
Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020
Note: excluding media spending on social and search; discounts are estimated based on Havas methodology
38
• In May 2020, the total actual* Ad market in China achieved RMB 38 billion; compared with last May, the total category spending decreased by 21%. Comparing to May 2018, investment also decreased.
• YTD May 2020, the total actual* Ad market in China achieved RMB 168 billion; compared with same period last year, the total category spending decreased by 28%.
• The main reasons behind decrease are COVID-19 outbreak and economic environment.
0
10,000
20,000
30,000
40,000
50,000
60,000
1 2 3 4 5 6
2020 2019 2018
Monthly Spending

Market trend varies strongly by category, only IT category shows
high increase in monitored spending
-12.8%
-18.3%
-41.2%
-25.2%
-1.7%
-14.3%
-2.7%
-44.2%
37.9%
-35.0%
-8.0%
-14.3%
-8.3%
-14.6%
-37.8%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
39
Compared with same period (Jan.- May.) last year, “IT Product & Service” experienced 2-digital growth rate in media investment while most
other categories cut their spending, such as “Leisure”, “Household”, “Clothing”, “Leisure” and “Transportation, Logistics & Auto”.

Digital media remains the main battlefield and the primary
media choice for most categories
China Ad Spend Market Media Mix
Digital, 41.4%
TV, 27.3%
Outdoor,
28.0%
Cinema, 0.9% Radio, 1.6% Newspaper,
0.5%
Magazine,
0.4%
Top Categories
40
• 70% of overall media investment through Digital and TV.
• In specific industries such as TLA and IT Product & Service category, the share of digital raised up to over 70% of total media investment.
POST & COMMUNICATION
LEISURE
PERSONAL ITEMS
REAL ESTATE & CONSTRUCTION…
PHARMACEUTICALS
COSMETICS & TOILETRIES
TRANSPORTATION,LOGISTIC & AUTO
BUSINESS & SERVICES
FOODSTUFF & BEVERAGES
IT PRODUCT & SERVICE
0% 20% 40% 60% 80% 100%

41
Media consumption

While life has mostly gone back to normal, TV rating show seasonal
decline but remain higher than 2019 especially in lower tiers
5.9 6.4 5.5 5.4 5.4 5.3
6.9
9.5
7.2
6 5.7 5.4
0
5
10
Jan Feb Mar Apr May Jun
2019 2020 Tier 2
42Source: Infosys, Target:P18-45, Period:2020/01/01 – 2020/6/30, Timeslot: All Day Tier1 including（BJ、SH、GZ、 SZ）,Tier2 including almost Provincial capital
6.2 6.8
5.2 5 5 5.1
7.2
10.2
7.2 6.5
5.4 5.1
0
5
10
2019 2020
Tier 1
4.9 5.8 4.9 4.7 4.6 4.5
6.5
9.2
6.5
5 5.1 4.9
0
5
10
2019 2020
Others

Hunan STV continues to be successful with their Dramas and Variety shows
43
Drama
Hunan STV dramas won the first and second place in Jun.
Variety
Although several popular variety series air new season in Q2, Hunan STV still dominates variety shows.
Zhejiang STV
局中人
Ave Rtg 1.1
Zhejiang STV
三叉戟
Ave Rtg 1.2
Hunan STV
蜗牛与黄鹂鸟
Ave Rtg 1.9
Hunan STV
幸福触手可及
Ave Rtg 1.7
Dragon STV-
挑战极限
Ave Rtg 2.1
Zhejiang STV-
奔跑吧
Ave Rtg 1.7
Dragon STV
燃烧
Ave Rtg 1.0
Hunan STV-
笑起来真好看
Ave Rtg 2.2
Zhejiang STV-
青春环游记
Ave Rtg 1.8
Hunan STV-
618超拼夜
Ave Rtg 2.2
Source: Infosys, Target:P18-45, Period: 2020/06/01-2020/06/30, Timeslot: All Day Market: 57 Markets

In Digital all app categories see a steady DAU increase, while EC and
Financial service report the most significant growth
44
Source: iResearch, period: 2019-2020.06
22
23
85
180
281
387
428
442
754
1258
Health & medicare
Food delivery & Recipes
Education
Travel & Navi
Gaming services
General news
Financial service
EC
Video services
Social networking
2020 June DAU
2020 June
2019 avg
Unit: Mil
2019 Avg. VS. 2020 June
growth rate
+3%
+8%
+22%
+23%
+13%
+13%
+5%
+17%
+12%
+1%

Early July overall Social DAU and time spent are in line with Q2
45
896
344
182
13 16
912
328
215
15 14
920
318
212
15 14
921
319
203
15 14
WeChat QQ Weibo LRB Baidu Tieba
2020 Top 5 Social Apps by DAU
2019 avg.
2020 Q1
2020 Q2
2020 Jul(till 12th)
Unit:
Mil
1220
1265 1254 1250
92.5
95.9
91.0 90.3
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
0
200
400
600
800
1000
1200
1400
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 Social Networking Apps User Behavior
Average DAU Average time spent
Unit:
Mil
Unit:
mins
Sources: iResearch, period: 2019-2020.07.12

Mango TV increased usage sharply since own-made variety show
launched end of June
46
365
436
407 414
112.1
123.1 119.2
123.7
0.0
20.0
40.0
60.0
80.0
100.0
120.0
0
100
200
300
400
500
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 Online Video Apps User Behavior
Unit:
Mil
Unit:
mins
167
153
78
32
22
191
172
97
46
25
172
156
86
42
27
173
156
87
49
30
iQIYI Tencent Video Youku Mango TV Bilibili
2020 Top 5 Online Video Apps by DAU
2019 avg.
2020 Q1
2020 Q2
2020 Jul(till 12th)
Unit:
Mil

Total short video DAU & time spent has stabilized, while Douyin
continues to enjoys a strong growth momentum
47
430
476 460 471
39.0
56.4
60.1 60.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0
100
200
300
400
500
600
700
800
900
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 Short Video Apps User Behavior
Unit:
Mil
Unit:
mins
211
123
52 46
36
274
145
57 51
35
286
136
55 47
35
297
135
56 48
36
Douyin Kwai Watermelon
Video
Douyin Volcano
Edition
Haokan Video
2020 Top 5 Short Video Apps by DAU
2019 avg.
2020 Q1
2020 Q2
2020 Jul(till 12th)
Unit:
Mil

Live stream market continues its healthy growth and is
expected to further increase together with 5G implication
48
397
477
613
2018 2019 2020 e
Live Stream User Scale in China
Unit: Mil
29%
7.5
10.6
16.3
2018 2019 2020 e
Live Stream Market Size in China
Unit: Mil
Source: SCMP Analysis, China Internet Network Information Center
20%
41%
54%
The market value per user has steadily increased over the last 3 years, from US$19.0 per user in 2018 to US$22.3 per user
in 2019 to an expected US$26.6 per user in 2020

Kwai claim its livestream DAUs reached 170 million, a 70%
increase within 6 months
49
TikTok’s biggest rival in China, Kwai (Kuaishou) released its 2020 H1 Content Ecosystem Report in July. This report
claims that its livestreaming function reached 170 million* DAU, a 70 million surge since the end of 2019.
Sources: Kwai 2020 H1 content ecosystem report, 2020.07.22
Tier 4 &
below
Tier 1
Tier 2
Tier 3
Users under 30 y.o.
70% +
EC DAU
100 M+
Livestream
DAU
170M+
Male
52%
Female
48%
2019 July -2020 June
300M
Gender distribution of Kwai content
creators that published original contents
Notes: Claim by Media owner, data does not correspond with iResearch data
15%
30%
24%
31%
Overall Kwai user distribution
by city tier

No big changes for News apps and Gaming compared to Q2,
however both on much higher levels as in 2019
344
385 383 390
46.9
56.2
52.3 52.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0
100
200
300
400
500
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 General News Apps User Behavior
Unit: Mil
Unit:
mins
249
300
285 287
70.2
75.3 76.5 77.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
0
50
100
150
200
250
300
350
400
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 Gaming Apps User Behavior
Unit: Mil
Unit:
mins
50

Navigation apps see a significant rise in time spend, while OTA apps
start to show an upward trend based on recovering domestic travel
51
127 126
143 143
19.5
17.3
28.9
33.2
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
50
100
150
200
250
300
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 Navigation Apps User Behavior
Unit:
Mil
Unit:
mins
24
18 17 18
9.5
7.9
7.4 7.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0
5
10
15
20
25
30
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 Online Travel Apps User Behavior
Unit:
Mil
Unit:
mins

279
73
37
16 10
270
84
38
18 10
302
89
43
18 12
300
91
39
18 11
Taobao Pinduoduo JD.com Xiaomi Mall Tmall
2020 Top 5 EC Apps by DAU
2019 avg.
2020 Q1
2020 Q2
2020 Jul(till 12th)
Unit:
Mil
After 618 shopping festival in June time spend on EC platforms
declined, but overall EC usage remains on a very high level
363 397
424 425
17.9
16.5
17.4 16.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
0
50
100
150
200
250
300
350
400
450
500
2019 avg. 2020 Q1 2020 Q2 2020 Jul(till
12th)
2020 E-commerce Apps User Behavior
Unit: Mil Unit:
mins
52

Pinduoduo targets young female consumers with aggressive
pricing and coupons
53
Alibaba
Taobao &
Tmall 9,076
PDD
1,842
JD.com
5,761
Annual Spending per User (RMB)
Alibaba & PDD year ended Mar 31st 2020; JD.com year ended Dec 31st 2019
company filings, GMV/ annual active users
Sources: iResearch, period: 2020 H1; Alibaba, JD.com, Pinduoduo company filings.
50% 59%
47% 43%
54%
50% 41%
53% 57%
46%
Taobao PDD JD.com Xiaomi Tmall
Female Male
29% 32% 29% 28%
29% 27% 30% 32%
21% 24% 22% 19%
14% 12% 14% 14%
7% 5% 6% 6%
Taobao PDD JD.com Tmall
below 24 yrs 25-30 yrs
31-35 yrs 36-40 yrs
above 40 yrs
EC Apps User Distributed by Gender and Age
What’s the typical user portrait of PDD?
• Young females
• Like to use entertainment or shopping app in her spare time
• Spend more time on social media than average
• Want to pursue a high-quality life but very sensitive to price

54
Media market news

In July Cinemas have started to reopen with strict rules and
preventive measures
Data source: China Daily, the paper
• On July 20, cinemas, in domestic low-risk areas, have resumed operations. In the
medium-high-risk areas, cinemas remain closed for the time being.
• As of 30th July, 6,066 of more than 10,000 cinemas had reopened, accounting for
55.3% of all such venues in China. From July 24 to 26, China’s box office grossed
nearly 93 million yuan ($13.3 m), more than 4 times the total amount earned
from July 20 to 23, propelling the first relaunch week to gross over 100 million
yuan.
• Cinemas that reopen will be subject to a strict set of rules, including screenings
being limited to 30% capacity and the number of movies shown at a venue
capped at 50% of its previous volume.
• While cinemas are rebooting the major cinema supplier Focusfilm and others
have not yet begun to sell cinema advertising.
55

1 / Quality population coverage
Greatly improve the UV coverage and reach the member population.
2 / Automatic add pre-rolls to fill up vacancy
The inventory gets through between pre-roll and digital flow, the pre-
roll can be played in the background automatically
3 / No threshold, one-click delivery
The pre-rolls materials can be reused directly
↑140%
All reached universe
↑50%+
Concentration of
High-quality population
↑20%+
Concentration of
core cities
Pre-roll
Digital flow
Combine Pre-roll
& Digital flow
New video ad format combining and connecting pre-roll and
video feeds ads by Tencent
Data source: Tencent Video Marketing guidance WeChat account 56

57
• Better exposure：OneShot Plus
• Accurate reach：Gender brush
• Much more fun in interaction：
Light OneShot/FollowU
Static / Dynamic
CPD/CPM
Regular Buy
New Playing Method
upgrade
Data source: Tencent Video Marketing guidance WeChat account
Tencent launched new opening screen ad format ‘OneShot Plus’

Tencent OneShot Plus Introduction
Two prime positions :
OneShot + Homepage focus video
① Boot up with 5s
OneShot
②60s Homepage focus
video play after OneShot
③Fixed frame to
prompt conversion
✓ 200%↑ average CTR
CTR vs. Conventional splash screen
✓ 40%↑ Build brand memory
Brand memory vs. Conventional splash screen
✓ 23%↑ Enhance users’ brand preference
Brand preference vs. Conventional splash screen
Support CPM/CPD/第一刷 buy，support jump to H5/EC APP/mini program etc.
OneShot linked homepage focus video
makes the brand more memorable
5+60s Long video bearer
• Fully tell the brand story and product details
• More creative space and richer presentation content

Gender brush
——The first ad seen by the user (Male/Female) when
he/she opens the app for the first time on that day
① Open Tencent APP ②Show the brand ads
③Click to jump to the
landing page
Full coverage of men and women（UV） ,
Seize the user's first view to increase reach
✓ Meet different demands
✓ DIY delivery forms
Static / Dynamic / Light OneShot / FollowU
Girls' Day
Mothers’ Day
Valentine’s Day
520
Chinese Valentine’s Day
Tencent OneShot Plus Introduction

FollowU · continuous splash screen
① OneShot
② Narrow down to
homepage floating window
③Click to jump to the
landing page
Floating window show:
✓ 20%↑ average CTR
CTR vs. Conventional splash screen
✓ 30s extend the exposure time
continuously accelerate the users’ conversion
✓ Easier and more efficient
Strong suitability, just need to add a floating window
OneShot+30s homepage floating window,
improve the effect in an efficient way
Tencent OneShot Plus introduction

Phone 5+60s OTT 15s
① Boot up with 5s
OneShot
② The focus page will
frame out after 2s
① Boot up with 5s
OneShot
Tencent OneShot Plus example by Tiffany
1 / Strong exposure
Both mobile and OTT are supported，and
the two devices can be put together or put
separately.
2 / Out of frame to improve efficiency
On the basis of OneShot, the out-of-frame focus image
is added to make it more attractive and increase CTR
3 / Attract customers and drive sales
• 5+60s ultra-long video on Mobile, connecting
to the mini-program and the e-commerce APP
to form a closed loop;
• 15s video on OTT, family scenes influence
consumption decision
② The focus page will
frame out after 2s

WeChat launched a new e-commerce mini program feature Westore
62
Westore, or Weixin Xiaoshangdian, offers basic functions such as product listings, order management,
payment, logistics, and after-sales service as well as built-in streaming features. The new WeChat-based
e-shop mini program will replace Weixin Xiaodian, which the company stopped updating on July 9 and will
gradually phase out.
Data
Monitoring
customer
service
Funds
Settlement
Logistics
Management
Order
ManagementFunctions
Promotion
Channels
UGC Ads Live Streaming New
Product
listing
Account
Screenshot
Data source: Technode

Comparing Westore vs. other key e-commerce platforms
Westore Taobao/Tmall JD Pinduoduo
Positioning
Focus on SMEs and individual can
quickly own a online shop with zero
cost
Professional online shopping
platform
Professional comprehensive
online shopping mall
New e-commerce pioneer
"Social + e-commerce" platform
APP
Payment WeChat pay Ali pay No limited (Ali pay excluded)
WeChat pay & Ali pay (Bank
cards directly excluded)
DAU 1.2 billion 3 billion 0.5 billion 1.6 billion
Pros and Cons
• WeChat is the most popular social
media app with huge population
base
• WeChat mini programs as
lightweight applications. No need
to download or upgrade
• Late-start in e-commerce
battlefield may customers have
already formed shopping habit on
Tmall or JD
• Recently just focus on SMEs, lower
competition
• The commodity category is
relatively complete as the
foundation e-commerce
platform, it has already
accumulated a huge
amount of users.
• Lower competition in
logistics and more female
users, less male users
compared to JD
• Outstanding in 3C products
• Warehousing logistics
system, competitive
logistics speed but high
investment problem
• Huge social foundation,
users share benefits with
fun
• The low-price model is
attractive, but it can't
attract high-end users.
• Also exist quality issue for
low price model
63
Data source: Havas

TV/OTV – New program hot Variety
64
元气满满的哥哥 – The Irresistible
Period: 2020 Jul 31st
Episodes: 12
Cast: 杨洋、吴奇隆、胡军、黄明昊、蔡国庆、王耀庆、李维嘉、陈学冬
Media: Mango TV，Hunan TV
Introduction
This variety show is an all-star competitive real game show. Guests play the
traditional childhood games to compete, allowing young people who are
addicted to the electronic world to find the joy of original games. This show
focuses on childhood. The beautiful memories and games bring the audience
back to childhood, and it is easier to resonate with the audience. While
maintaining entertainment, it focuses on the correct value orientation, and
subtly influences audience behavior in the game.

OTV – New program hot Variety
65
夏日冲浪店 – Let’s Sacalaca
Period: 2020 Jul 4th – Sep 5th
Episodes: 10
Cast: 王一博，黄轩，黄明昊，韩东君，乔欣
Media: iQIYI
Introduction
“Let’s Sacalaca" aims to show the surf culture and the trendy life of contemporary
young people through the full record of the guests and surf instructors operating
in the summer surf shop, and lead everyone to establish a healthy lifestyle.
In the program, the four guests went to Riyue Bay, Hainan, and worked as
apprentices in the surf shop. They spent 21 days learning surfing skills and
accumulating surfing practical experience while helping operate the store. The
show advocates the concept of "being no fear of worries and enjoying the wave",
hoping to make the users’ spiritual life full of vitality, while demonstrating their
trendy life attitude.

OTV – New program hot Variety
66
奇妙小森林 – Wonderful Little Forest
Period: 2020 Jun 13th
Episodes: 12
Cast: 郑爽，谭松韵，张新成，吴奇隆
Media: Mango TV
Introduction
“Little Forest" aims to "return nature to children; and return the wonderful little
forest to the world". In the natural environment, the program built a small forest
house for children to play, inviting children to put down their electronic devices,
explore the nature, and learn about nature in outdoor activities and understand
the meaning of life.

OTV – New program hot Drama
67
河神2 – Tientsin Mystic 2
Period: 2020 Jul 6th
Episodes: 24
Cast: 金世佳、张铭恩、王紫璇、陈芋米
Media: iQiyi
Introduction
"Little River God" Guo Deyou and Ding Mao continued to investigate the source
of the evil water explosion mystery. Unexpectedly, the madman Cui died, the
diplomat is burned to death, and a water-buried tomb emerged from Haihe. The
jailed, newcomers appeared on the scene. The intricate political and business
relations between Tianjin and Wei behind the case are obvious, and it is about
the tomb of the "Nine Bulls". New cases ensued one after another, and for a
while, Tianjin Wei was full of panic. The shocking secret of "Two Tigers and One
Chicken" gradually surfaced. Let's see whether Guo and Ding can reveal the
secrets and continue the legend.

TV/OTV – New program hot Drama
68
二十不惑 – Twenty Your Life On
Episodes: 40
Cast: 关晓彤、金世佳、牛骏峰、卜冠今、李庚希
Media: iQiyi，湖南卫视
Introduction
It tells the story of four girls who are about to graduate. Although they
experienced setbacks, confusion and embarrassment during the transition from
campus to society, they understood the meaning of true love under the family
guidance and friends’ support. Finally they obtained career success and personal
development.

TV/OTV – New program hot Drama
69
三十而已 – Nothing But Thirty
Episodes: 43
Cast: 江疏影、童瑶、毛晓彤
Media: Tencent，东方卫视
Introduction
The drama unfolds from the perspective of three thirty-year-old women, telling
the story of urban women encountering multiple pressures at the age of thirty.
In this drama, Gu Jia is a full-time wife with high IQ and EQ, Wang Manni is a
good-looking gold salesperson, Zhong Xiaoqin is an ordinary staff in a company,
and a writer who has reached the pinnacle of life because of unexpectedly high
returns in writing.
They embraced their 30s in their own way and opened a new chapter in their
lives.

70
Campaigns Worth Mentioning

1st Outdoor LED live broadcasting of Jay Chou’s Kwai debut
Source : Phoenix media
• On July 26, Jay Chou made his live broadcast debut on
Kwai and outdoor LED large screen was
simultaneously broadcasting live in Beijing, Shanghai,
Guangzhou, Chengdu and other cities.
• Landmark OOH was also used for promote this
broadcast
• Outdoor LED relies on the advantage of "outdoor
first-sight media", combined with online live
broadcasting to increase traffic, which is the new
value of traditional media.
71

Campaign Summary
Key Takeaways
Result
➢ Campaign Period: Mar.26, 2020
➢ Est. Budget: 1.0Mil
➢ Market: Nationwide
➢ Key Platform:
➢ Highlight:
• First try with 15K View Number, but social feedback
was negative.
➢ Learning:
• Live streaming is a double-edged sword for brand to
communicate with consumer. Well prepared in
equipment, content and platform selection is
necessary.
RED
➢ RED Performance:
• Views Number: 15,000+
• Brand Account Followers: +10%
➢ Social Feedback:
• Most social reactions are negative, focus on:
unaesthetic scenery, boring content and low
atmosphereOpening Page Topic Page Live Streaming Page Brand Customized Gift
Comments from Weibo
Paid Social (RED)
LV uses live stream on RED to promote
new collection
72

Campaign SummaryFila X Maison Mihara Yasuhiro
celebrities encourage social buzz
Key Takeaways
• FILA announced new spokesperson KUN and
cooperated with designer MIHARA YASUHIRO to launch
cross over product at the same time, which showed
fashion style of deluxe sports for the first time by ‘致锋
尚者’ theme.
• FILA aroused imagination and exploration about deluxe
sports fashion of the young through online and offline
activities, broke fashion loop and started the marketing
competition of sports fashion.
• FILA established group of ‘致锋尚者’ consisted by
different celebrities such as KUN and Kimura Mitsuki,
invited celebrities of different ages to act in the
advertising film <致锋尚者>. The topic of #致锋尚者#
also successfully expanded to the public vision and
generated plentiful UGC.
• FILA held offline party that showed Tokyo trend and
Shanghai night scene, which cooperated with online
Tmall Super Brand Day at the same time. ‘致锋尚者’ led
by KUN and Jinna showed daily style on the party which
directly drove sales.
Party Style Conference
FILA x Maison MIHARA YASUHIRO 致锋尚者
UGC
73
Result
• Weibo topic
#FILA# 80.68 million reads, 115k comments
#致锋尚者# 360 million reads, 3.215 million comments

Key Takeaway
• New Zealand captured people's enthusiasm for
tourism in summer vacation, and leveraged the live
streaming hosted by official endorsement &
influencers to arouse people’s interest and create
social buzz
• The recovery campaign is more like a cheer-up effort
than a really strong performance drive, New Zealand
becomes one of the dream destination when the ban
on outbound tourism is lifted.
2. The popular KOL links to Tourism New
Zealand Via live streaming to introduce local
cuisine
1. The official Weibo of Sina Tourism has
launched a theme campaign of “Meet New
Zealand,/与新西兰不见不散"
Campaign Summary
• Period: Jun 15 – Jul.13, 2020
• Est. Budget: Over 1Mil
• Market: Nationwide
• Key Platform:
Result
• Topic Reading：150M times
• Comments：42000 times
• live streaming viewers：4.56M
3. Top travel KOL @ "Meet
New Zealand" topic , to
share their experience
and feeling while traveling
in New Zealand
New Zealand Tourism launches social campaign to inspire and
become a bucket list destination once boarders re-open
74

Continental x BOSE partner up and have joint JD Super Brand
Day Social Promotion
75Source: Continental official Weibo account
Warm Up Social Poster
Series poster indicating “Best partner”
to attract audiences’ attention
Brand Video
2 preview short videos to trigger
curiosity, 1 long video to fully display
product benefits
Celebrity In Livestream
Invite popular celebrity to join in the
livestream

76
Havas POV

77
In line with the overall economic recovery also advertising
activities are recovering
• Advertising activities continue to recover and show a strong MoM growth since the COVID-19 peak in
February. Digital media continues to be the main battlefield for brands.
• Overall digital media consumption shows strong increase vs. 2019. Especially Online Video, Short Video, live
streaming and EC are booming and have been proven meaningful media.
• Live streaming continues its growth momentum with steady increase in user base and value by user. Hence more and more brands
across all category leverage streaming in their comms activities on various platforms in order to drive sales.
• Key platforms launch new ad forms in their fight for audiences, media dollars and to enlarge inventory. E.g. Tencent adding new
formats combining pre-rolls and video feeds or impactful opening screens and pre-roll ads.
• Try new and innovative formats as forerunners presence pays off and help you to break through the
intensifying clutter.
• While TV ratings show a seasonal decline, ratings remain above 2019 especially in lower tier markets
• New hot dramas and hot variety shows are launched on TV and OTV platforms. Your Havas team can help
you evaluate how those can be used to drive your brand visibility.
• For OOH ensure to lock in premium resources as soon as possible as inventory will get tight.
• While Cinema has re-opened in July, given the remaining uncertainties and limitations ad placements are
currently not recommended.

MOBILE
DATA STRATEGY
VIDEO & AUDIO
NATIONAL/LOCAL
PUBLISHING
NATIONAL/LOCAL
OUTDOOR
SPONSORSHIPS
SPORTS
MARKETING
BRANDED
CONTENT
EXPERIENTIAL
MARKETING
SOCIAL MEDIA
CREATIVE
STRATEGY
CRM
SEARCH
INNOVATION
GEO-LOCATION
PERFORMANCE
MEDIA
MUSIC
GAMING
ENTERTAINMENT INTEGRATIONS
Recouping business and
brand growth in China
need a fully integrated
approach with
high speed to market.
Within Havas Village we
can efficiently mobilize the
team you need tomorrow.
78
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