COVID-19 // China POV Vol.7

1
Havas Group China
July 2nd 2020
COVID-19
EDITION
#7

2
In this edition
1. COVID-19 situation update
2. Consumption impact
3. Media consumption
4. E-Commerce 618 update
5. Media market implications
6. Economic and key category outlook
7. POV & recommendation

3
COVID-19 situation update
More daily life positive
picture, this one would
have been for the peak not
for now

4Sources: Ipsos; Cosmose; GWI
Chinese are becoming more optimistic, with shopping festivals
and special deals resulting in spend impulses
88%Claim COVID-19 has limited
impact to their finance
May 26th, 2020
92%Are optimistic in China to
overcome COVID-19
May 26th, 2020
1 Trillion
RMB sales generated during 618
EC shopping festival
June 18th, 2020

Chinese are living the new normality more optimistically
5
• A short shock has arisen when a second wave of infections has been traced to a wholesale market in
Beijing. Beijing has raised its emergency respond level to 2 since June 16th. 318 new local case has been
reported from June 11th to 28th. Luckily the number of new cases is decreasing day by day and didn’t
spread widely under government prevention and control. This has strengthened appreciation by the
audience of government control and its feeling of security and safety.
• According to WHO, it still takes time to kill COVID-19 as it is easily to bounce back. People are preparing to
live in this new normality.
• China’s domestic economy continued its recovery from the coronavirus slump, while the better domestic
sentiment among companies is tempered at the same time by the grim global outlook.
• Many economy indicators are now neutral instead of contracting. Also smaller firms show more
confidence, with production and new orders up, according to a Standard Chartered survey.
Source: China skinny

Chinese are living the new normality more optimistically
6
• Meanwhile, Chinese keep growing their spending, especially when there are special deals or events. During
the 18-days of the 618 shopping festival, consumers spent over a trillion RMB in gross merchandise value
(GMV) across China's ecommerce platforms, JD clocked 34% YoY growth and Alibaba enjoyed 2.5 times than
last double 11 shopping festival.
• Offline store traffic further recovered. Lower tiers show a faster rebound with around 88% recovered.
• Domestic air travel has just now topped 60% of its 2019 level. Hotel occupancy on Hainan Island has now
exceeded 2019's rates year-on-year benefit from its tax-free shopping increased to 100K RMB.
Source: China skinny

Big purchase categories further recovered by the 618 shopping
festival. Daily enjoyment categories keep recovering as well
8
Phase Cancel or reduce Unchanged or limited Increase
Current
situation
Longer term
situation
• Big purchases further recover driven by big
online shopping festival 618
• Domestic travel recover to 50% of 2019
level during Duanwu festival. International
travel keep postponed
• Dining out & daily life enjoyment keep
reenergizing
• Big family purchase categories without
urgency: luxury, car, furniture etc.
• Online entertainment
• Financial investment
• Online shopping through live
streaming keep booming
• Health related categories,
including healthy food
• Entertainment, especially OOH
activities
• Home decorations and
appliances
• Fresh food
• Personal care products
• Major appliances,
consumer electronics,
liquor, etc.
• Luxury: overseas buying
high decrease,
domestically to
compensate
• Travel
• Health related categories,
including healthy food, fresh
food, gym
• Home decorations and
appliances
• Insurance
• O2O will accelerate
Sources: desk research and social listening

China retail market growth is gradually recovering Q3 is forecasted to have limited impact, Q4 start to increase
Retail market keeps on gradually recovering after the big slump,
limited impact is expected for Q3
9
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%
Retail Market forecast 2020
Data source: National Bureau of Statistics; The Economist intelligence unit

The high level results of the 618 shopping festival has shown the
remaining spending power of Chinese consumers
10
1
Trillion
RMB
Sales of 618 online shopping
festival from JD and Alibaba
JD
33.6% YoY growth rate
Alibaba
2.5 times vs. double 11
JD 618 sales results
Data source: JD, China skinny

Lower tier cities see faster offline traffic recovery, tier 1 cities
are quickly catching up since May
11
76.7% 80.2% 87.6%
Tier 1 Tier 2 Tier 3 or 4
China offline shopping mall daily traffic recovered level
compared to pre-COVID (May average)
Tier 1 Tier 2 Tier 3 or 4
Mar 110.96% 173.91% 113.90%
Apr 38.73% 49.63% 36.39%
May 28.3% 17.22% 16.4%
Data source: Win data
China offline shopping mall daily traffic recover rate
compared to last month (May average)

Street vendor policy and stimulation to boost the economy
12
Keqiang Li has announced that roadside vendors are now allowed and even encouraged in order to promote the economic
recovery and remedy the unemployment
• ‘Street vending trucks’ are now trending and many platforms have them sold out. (one such truck sells for around RMB 50,000)
• New businesses and models are popping up at an enormous speed. It’s not just selling fruits and snacks on the sidewalks, but fashion stores,
hairdressers, DIY gifts, express massage and much more.
• Alipay payment code (to accept payments from others) has seen over 100,000 new registrations every single day since the announcement
on 1st June.
Data source: Linkedin

13
Longer term consumer impact
55%Keep concerns about the
COVID-19 situation
Mar 20th, 2020

New essentials have emerged during the crisis, family bonding
and entertainment keep being more important than before
70.6
57.1
50.9
47.9
51.5
41.7
31.9
38
27
15.3
11.7
57.6
53.6
38.3
32.9
25.1 25.1 27.4
21.6
18.2
10.4 8.4
The pleasure of
being with my family
A more frugal way
of living
The pleasure of
cultural activities
(reading books,
watching movies,
home concerts, etc.)
The pleasure of
being home
Online gaming The importance of
human connection
(through virtual
events: remote
happy hours, DJ
streams, watch
parties, etc.)
The pleasure of
being alone
New activities
thanks to online
classes
Myself 'Zoom parties' New types of
concerts from home
from music artists
%
Data source: Havas prosumer study
14

15
After the COVID-19 crisis, I will be a
lot more careful with my money
82%
PROSUMERS
74%
MAINSTREAM
77/66
Also longer term, Chinese keep more careful with their money
Data source: Havas prosumer study
Saving money so I’m better
prepared to face the next crisis
43%
PROSUMERS
42%
MAINSTREAM
33/30

Non-necessities Necessities
Hence, a reversed China’s prolonged trading up trends is seen –
necessities are trading up, non-necessities are trading down
16
Data source: BCG
Consumers trading up/down for fast
moving consumer goods in 2018 (%)
Consumers trading up/down to more
expensive/cheaper brands across all types
of products in May 2020 (%)
17
18
18
24
32
40
Cosmetics
luxury
personal care
Food&drink
Vitamin
Fresh food
25
25
28
29
29
32
32
37
Dine-in
Apparel
Cosmetics
Luxury
3C
Sport fashion
Fashion accesory
Shoe
% consumer buy cheaper
products due to COVID-19
% consumer buy more expensive
products due to COVID-19
Others

Fresh food e-commerce keeps booming, more locally sourced
17
China’s fresh food EC was already growing rapidly even
before the outbreak, achieving a CAGR of 64.6%
During the Covid-19 outbreak, China’s online food
sales grew faster than any other sector.
• 32.7% YoY growth in Q1
• 400% growth of meat, 300% growth of seafood
sales on Alibaba platform
As a result of COVID-19, I will be more
inclined to purchase locally sourced
food, even if it’s more expensive
82%
PROSUMERS
70%
MAINSTREAM
74/59 76/70
Data source: Havas prosumer study; China skinny; PWC

China’s single economy shows bigger potential, as singles show
higher spending willingness
18
Buy
apparel
Food &
drinks
3C Skin care Tourism
Buy
apparel
Food &
drinks
3C Skin care Tourism
single Non- single
% of consumer who plan to purchase below
products in next year
single Non- single
% of consumer who are willing to pay more
for below products in next year
Data source: Nielson
China’s single population is now over 260 Million, drive the single economy to a hot topic
More time More entertainment
More self-indulgence
consumption
More expectation for
self-improvement

TV ratings show seasonal decline, but remain higher than last year
5.9 6.4 5.5 5.4 5.4
6.9
9.5
7.2 6 5.7
0
5
10
Jan Feb Mar Apr May
2019 2020 Tier 2
20Source: Infosys, Target:P18-45, Period:2020/01/01 – 2020/5/31, Timeslot: All Day Tier1 including（BJ、SH、GZ、 SZ）,Tier2 including almost Provincial capital
6.2 6.8
5.2 5 5
7.2
10.2
7.2 6.5 5.4
0
5
10
Jan Feb Mar Apr May
2019 2020
Tier 1
4.9 5.8 4.9 4.7 4.6
6.5
9.2
6.5
5 5.1
0
5
10
Jan Feb Mar Apr May
2019 2020
Others

Hunan STV continues success with their drama and variety shows
21
Drama
Hunan STV dramas won the first and second place in May.
Variety
Although several popular variety series air new season in Q2, Hunan STV still dominates variety shows.
0201 0403 05
Jiangsu STV
秋蝉
Ave Rtg 1.22
Zhejiang STV
三叉戟
Ave Rtg 1.35
Hunan STV
清平乐
Ave Rtg 1.81
Hunan STV
幸福触手可及
Ave Rtg 1.91
Dragon STV-
挑战极限
Ave Rtg 2.02
Zhejiang STV-
奔跑吧
Ave Rtg 1.30
0201 0403 05
ZhejiangSTV
我们在梦开始的
地方
Ave Rtg 1.6
Hunan STV-
笑起来真好看
Ave Rtg 1.95
Zhejiang STV-
天赐的声音
Ave Rtg 1.43
Hunan STV-
向往的生活
Ave Rtg 2.4
Source: Infosys, Target:P18-45, Period: 2020/05/01-2020/05/31, Timeslot: All Day Market: 57 Markets

MI launched new OTT Open Screen Ads format ‘BeyondView’
22
Recently, Mi OTT launched a new type Open Screen Ads 3.0 called BeyondView. The difference between the new version and the previous
ones is that the new one cooperates with Tmall and audience can directly go to Tmall store via the ads. According to the quantitative
survey of OTT users aged from 20 to 55y.o. conducted by Xiaomi and Zhimeng Consulting in 2019, the monthly shopping scale exceeded 10
million on OTT, with 54.8% of users saying they would shop on OTT.
OTT may become the next entry of e-commerce platforms. Now users can directly enter the Tmall page by clicking the OTT ads, which
further shorten the consumer decision-making process.
Above all, BeyondView fully displays products and brands through 15s TVC and 5s static super guide, plus the unlimited playing method,
effectively arousing users' desire to buy and truly realizing purchasing while watching.
Source: <MI OTT_Open Screen 3.0_-_BeyondView> published by 2020.6
• Shopping On TV
• 3D Cloud - Vehicle
Configuration Browse
• Brand Zone
• H5
• Channel / Content page
• More…
15s Open Screen Ads 5s Super Guide Unlimited Playing Method
100% playable & clickable
5s Static Ads
Improve the users interactions
Clickable
Achieve retention fund, promotions,
one-stop purchases, etc.
+ +

+
New product promotion
sales promotion /
Purchasing guide
Shopping On MI OTT
Product Details page
Get coupons and add items
Shopping cart settlement
Shopping cart settlement
15s Open Screen Ads
BeyondView could build a shopping guide platform on OTT with
the direct link to Tmall
5s Super Guide
23

+
15s Open Screen Ads
5s Super Guide
Recommend offline 4S
stores based on IP
3D Cloud - Vehicle Configuration
Browse
Playlist column
(Driving test，KOL broadcast，Brand TVC, etc.）
Full-screen play
Achieve retention fund
BeyondView also provide new 3D features for user engagement
MI OTT 3D Cloud-Vehicle Configuration Browse
24

New TV - Program Hot Variety
25
乘风破浪的姐姐 Sisters Who Make Waves
Period: 2020 Jun 12st – Aug 28th
Episodes: 12
Cast:宁静、阿朵、伊能静、张雨绮、郑希怡等年龄在30+成名女艺人
Media: Mango TV
Introduction
The variety program features 30 female celebrities over 30 years old who must
compete to debut in a 5-member girl group.
After debuting, the show has triggered a wave of discussion around ageist
stereotypes and female empowerment. By 29th June, the hashtag tied to the
show’s Chinese name — #乘风破浪的姐姐# — has already attracted 18 billion
views and 7.7 million discussions on Weibo. And after the first episode aired on
June 12, Sisters pulled in a total of more than 370 million views in its first three
days of release.

New OTV – Program Hot Variety
26
这就是街舞III Street Dance of China: Season 3
Period: 2020. July
Episodes: 12
Cast:张艺兴、王嘉尔、王一博、钟汉良
Media: YOUKU
Introduction
Dancers come from all walks of life and embody many different styles from old-
school to new-school hip-hop, urban to locking, ballet to wacking, etc. Young
and old generations come together to create/perform some of the most
intricate pieces. The four captains guard the Chinese style old Beijing street,
Guangzhou arcade street, Shanghai Shikumen street and graffiti street. They
choose street dancers for their team and the teams battle in different street
formats, but they still maintain the motto of the show that is “Love and Peace”.
Sources: https://mydramalist.com/60593-street-dance-of-china-season-3

New TV – Program Hot Variety
27
密室大逃脱 S2 Great Escape: Season 2
Period: 2020 July
Episodes: 12
Cast:杨幂、邓论、黄明昊、大张伟、郭麒麟
Media: Mango TV
Introduction
Cast members work together to escape a secret room. Each episode has six
guests. They are trapped in a closed space with different themes and have to
discover clues, accomplish tasks to escape from the room. In addition to finding
clues and decoding them, members may need to interact with the story
characters played by the staff (such as helping the character, leading the
character to escape, etc.) before they can escape from the game. There is no
time limit for each game, it will only end when all members and story characters
(if any) have successfully escaped.

New TV – Program Hot Drama
28
余生请多指教 The Oath of Love
Period: 2020 July
Episodes: 32
Cast:杨紫、肖战
Media: Tencent Hunan STV
Introduction
Lin Zhi Xiao's life hits rock bottom right as she is about to graduate from
university. Her father falls ill and has to be hospitalized, she ends up having to
give up a job opportunity, and she breaks up with her boyfriend. All her hopes
and dreams for the future are dashed. At this time, Gu Wei, her father's
attending physician, walks into Lin's life. Love has the tendency to creep up on
you when you're not looking for it. Two people who have been hurt before
gradually get to know each other and fall in love. They go through doubts and
hit road bumps, they experience misunderstandings and trying times, but in the
process of falling in love, they realize that they are made for each other.

New TV – Program Hot Drama
29
有翡 Legend of Fei
Period: 2020 Q3
Episodes: 58
Cast:王一博、赵丽颖
Media: Tencent
Introduction
A legendary story follows the heroine Zhou Fei who traverses the pugilistic world
with her blade in hand. The nation has descended to chaos since many years ago. A
chivalrous hero receives orders from the king to surround the bandits which result
in him becoming the leader of the 48 mountain stronghold that takes in those who
are in need. After his death, his daughter Li Jinrong becomes the new leader and
marries Zhou Yitang. Their daughter Zhou Fei is born into a dynasty that has seen
the reputable families decline in power. Zhou Fei runs away from home at the age
of thirteen. She would have met certain death if not for Xie Yun who saves her from
harm. Years later, they meet again at Huo manorThe young heroes start an
adventurous journey together.

30
Cinemas will still remain closed across China
On 12th Jun, Chinese authorities formally
announced that cinemas in Beijing must remain
shut for the time being after new coronavirus
cases were discovered in the capital.
Chinese cinemas have been shut due to COVID-
19 since late January, with thousands going
bankrupt since. The country’s top administrative
body, the State Council, said on May 8 that
entertainment venues including cinemas could
resume work, but no local directives to do so
ever emerged, leaving cinemas vacant and in
limbo.
Data source : Beijing Youth Jun,2020

All app categories see a steady usage increase compared to last year
31
Source: iResearch, period: 2019-2020.05
20
23
73
171
249
344
347
363
701
1220
22
24
87
182
284
382
420
422
749
1255
Health & medicare
Food delivery & Recipes
Education
Travel & Navi
Gaming services
General news
Financial service
EC
Video services
Social networking
2020 May DAU
2020 May
2019 avg
Unit: Mil
2019 Avg. VS. 2020 May
growth rate
+3%
+7%
+16%
+21%
+11%
+14%
+6%
+19%
+11%
+3%

Social apps DAU increases while avg. time spent keeps decreasing.
WeChat continues its user base growth in June
32
896
344
182
13 16
912
328
215
15 14
916
320
215
15 14
921
315
216
15 14
923
317
213
15 14
WeChat QQ Weibo LRB Baidu Tieba
2020 Top 5 Social Apps by DAU
2019 avg.
2020 Q1
2020 Apr
2020 May
2020 Jun (till 14th)
Unit:
Mil
1220
1265 1250 1255 1260
92.5
95.9
92.4 91.0 90.4
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 Apr 2020 May 2020
Jun(till
14th)
2020 Social Networking Apps User Behavior
Average DAU Average time spent
Unit:
Mil
Unit:
mins
Source: iResearch, period: 2019-2020.06.14

OTV apps DAU shows a downward trend while the time spent
remains at the same level as May
33
365
436
416 402 397
112.1
123.1
117.4 119.9 120.4
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 Apr 2020 May 2020
Jun(till
14th)
2020 Online Video Apps User Behavior
Unit:
Mil
Unit:
mins
Sources: iResearch, period: 2019-2020.06.14
167
153
78
32
22
191
172
97
46
25
177
163
89
40
26
170
155
86
41
27
166
149
83
42
28
iQIYI Tencent Video Youku Mango TV Bilibili
2020 Top 5 Online Video Apps by DAU
2019 avg.
2020 Q1
2020 Apr
2020 May
2020 Jun(till 14th)
Unit:
Mil

Total short video DAU & time spent stabilized, while Douyin
continues growing daily usage with almost 50% increase vs. 2019
34
430
476 455 459 463
39.0
56.4
59.9 60.7 59.7
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 Apr 2020 May 2020
Jun(till
14th)
2020 Short Video Apps User Behavior
Unit:
Mil
Unit:
mins
211
123
52 46
36
274
145
57 51
35
280
137
55 47
35
286
136
55 47
35
290
135
55 47
35
Douyin Kwai Watermelon
Video
Douyin Volcano
Edition
Haokan Video
2020 Top 5 Short Video Apps by DAU
2019 avg.
2020 Q1
2020 Apr
2020 May
2020 Jun(till 14th)
Unit:
Mil

Both gaming apps and general news apps DAU and time spent keep
flat, but at a much higher level than 2019
344
385 379 382 386
46.9
56.2
53.9 52.0 51.0
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 Apr 2020 May 2020 Jun(till
14th)
2020 General News Apps User Behavior
Unit: Mil
Unit:
mins
249
300 289 284 280
70.2
75.3
78.2 76.0 76.0
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 Apr 2020 May 2020
Jun(till
14th)
2020 Gaming Apps User Behavior
Unit: Mil
Unit:
mins
35

OTA apps DAU and time have stabilized, but remain much below
2019 avg., while Navi apps see a uplift in use time vs. last year
36
127 126
143 145 141
19.5
17.3
25.6
29.3
31.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
50
100
150
200
250
300
14th)
2020 Navigation Apps User Behavior
Unit:
Mil
Unit:
mins
24
18 17 17 18
9.5
7.9
7.4 7.6 7.6
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
14th)
2020 Online Travel Apps User Behavior
Unit:
Mil
Unit:
mins

China remains the largest e-commerce market in the world.
Strong growth is driven by social commerce
38
Source：eMarketer, iResearch，Alibaba financial report,JDfinancial report, Pinduoduo financial report
Alibaba & JD steady growth, while Pinduoduo double the GMV
• Meanwhile, social commerce sales in China totaled $186.04 billion in
2019—nearly 10 times the number of sales in the US.
• Social commerce sales will continue to rise over our forecast period,
nearly doubling to $474.81 billion (RMB3.280 trillion) by 2023.
1.16
2.09
6.59
Pinduoduo
JD.com
Taobao
GMV in 2020 Fiscal Year
2019.04.01-2020.3.31 YoY
+15%
+24%
+108%
Trillion, RMB
186.04
242.41
315.5
394.69
474.81
10.3% 11.6% 13.0% 13.8% 14.2%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
0
100
200
300
400
500
Retail Social Commerce Sales
billions % of total retail ecommerce sales
China, 2019-2023

39
1.5
2.4
2.9
2.0
1.9
0.9
5th and below tier cities
4th tiercities
3rd tier cities
2nd tiercities
New 1st tiercities
1st tiercities
2020-3 2019-3
1st-2nd tier cities
- 7.14 M
3rd tier cities
and below
+ 24.61M
Huge user base in low tier cities with online purchase fast growth
Internet Users Scale
Alibaba and JD new users mainly from low tier cities
Low tier cities users have different APP preference
Video Shopping
Online
Payment
70%
+
70% news users from lowtier
cities in Alibaba FY 2020
70% new users from 3rd - 6th tier cities
according to JD new released quarter report
70%+
Source: Quest Mobile/ TalkingData
Increased consumption in lower tier cities keep key drivers for
overall e-commerce growth
Hundred million

40
Almost 80% of all netizens have become online shoppers and with
increasing popularity of livestream further growth is expected
4.7
5.3
6.1 6.4
7.1
63.8%
69.1%
73.6% 74.8%
78.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2016 FY 2017 FY 2018 FY 2019 FY 2020 Q1
China Online Shoppers Growth
Online Shoppers Penetration
Unit:
hundred Mil
Source: iResearch，Alibaba financial report,JDfinancial report, Pinduoduo financial report
6.286
3.87
7.26
Pinduoduo
JD.com
Taobao
Annual Active Buyer in FY2020 2019.04.01-2020.3.31
YoY
+11%
+24%
+42%
Hundred million
Taobao has the largest active buyer base, JD and PDD grow faster
309 290
135
93
48
Taobao Douyin Kuaishou PDD JD
App DAU May 2020
Million
Livestreaming apps have huge traffic,
taking more share of users’ time spent.

279
73
37
16 10
270
84
38
18 10
292
84
40
18 11
303
90
42
18 12
316
92
49
18 14
Taobao Pinduoduo JD.com Xiaomi Mall Tmall
2020 Top 5 EC Apps by DAU
2019 avg.
2020 Q1
2020 Apr
2020 May
2020 Jun(till 7th)
Unit:
Mil
EC apps DAU & time spent increased monthly, with Taobao,
Pinduoduo, JD.com and Tmall all gained more active users
41
363 397 408 422
446
17.9
16.5 16.9
17.6
18.3
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 Apr 2020 May 2020
Jun(till
14th)
2020 E-commerce Apps User Behavior
Unit: Mil Unit:
mins

5.0%
2.2%
4.6%
10.4%
0.6%
0.7%
12.5%
8.0%
-2.1%
1.2%
-2.2%
1.0%
0
50
100
150
200
250
300
350
Taobao Pinduoduo JD.com Tmall
Weekly DAU increase
5.11-5.17 5.18-5.24 5.25-5.31 6.1-6.7 6.8-6.14
618 pre-sale drives active traffic and usage on all platforms,
showing an increasing popularity of this shopping festival
42
Unit: mil

43
618 shopping festival is also boosting economy with record sales
Tmall 618 generated a total sales of 698.2 billion yuan (US$98.49 bn).
SME merchants saw one more billion orders during this year’s Tmall 618.
Close to 180 luxury brands are participating this year, nearly double the
amount from 2019 Double 11 shopping festival. Burberry, Montblanc,
Cartier and Michael Kors are offering customized special edition items co-
created with Tmall just for 6.18.
JD 618 total transactions reached 269.2 billion yuan (US$37.98 bn).
This is the 17th year for JD.com to hold its 618 Grand Promotion. JD
will provide RMB 10 billion yuan in subsidies, hundreds of billions of
discounts, and 10 billion yuan consumption coupons during the JD
618 event this year, announced on 25 May.
JD will host over 300,000 key live streaming sessions during this
year’s 618. It will also work with partners including Kuaishou, Douyin
Wesee, Bilibili, Huya, Douyu, and others.
Tmall reported its 618 GMV for the first time JD broke its record this year
Source: Havas research, WIC
3,000
brands
10,000
stores
Grew by more than
1000% year over year
300
celebrities
e.g. Wu Yifan, Zhu Dan,
Zheng Shuang with
huge fan base
Grew by more than
100% year over year

More players participate in this year’s 618 Shopping festival
10 Bn subsidies
Livestream／
Short Form Video
Interactive/
ExperienceNew Product
• 1st trial on 618 shopping festival,
strengthen 10 Bn subsidies; Big
amount of e-coupon
• 618 Super Group Buy gala show
• Kuaishou + JD double 10 Bn
subsidies
• Launch 1st short firm video
shopping festival for whole month
• J-10% saving plan
• Double billion subsidies storm
campaign
• 618 Super Gala Show
• Douyin livestreaming sales carnival
• Partner with SN for “Super Buyer”
live room
Source: Havas research
10 Bn subsidies
44

Due to COVID-19 the market ad spend keeps declining
Month by month comparison
49,966
47,259
32,694
10,000
20,000
30,000
40,000
50,000
60,000
2018 Apr 2019 Apr 2020 Apr
- 31%
YTD vs YTD comparison
206,140
182,676
130,493
50,000
100,000
150,000
200,000
250,000
300,000
YTD 2018 YTD 2019 YTD 2020
- 28%
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 46
• In Apr 2020, the total actual* Ad market in China achieved RMB 32 billion; compared with last Apr, the total category spending decreased
by 31%. Comparing to Apr 2018, investment also decreased.
• YTD Apr 2020, the total actual* Ad market in China achieved RMB 130 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.

Market trend varies strongly by category, only IT category shows
high increase in monitored spending
-13.1% -16.5%
-39.2%
-13.0%
0.8%
-11.2%
1.0%
-45.5%
40.4%
-35.3%
0.9%
-8.3%
-3.7% -4.8%
-28.8%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Note: excluding media spending on social and search; discounts are estimated based on Havas methodology 47
Compared with same period (Jan.- Apr.) last year, “Personal Items”, “Consumer Electronics” and “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 is the key battlefield, especially for technical products
and services
China Ad Spend Market Media Mix
Digital, 45.5%
TV, 25.1%
Outdoor,
26.1%
Cinema, 1.1%
Radio, 1.5% Newspaper,
0.4%
Magazine,
0.4%
Top Categories
48
• 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%
Note: excluding media spending on social and search; discounts are estimated based on Havas methodology

China has set the growth priorities and targets for 2020;
with a key role for employment
50

With the key objective to gradually increase spending power of
a big audience proportion and further drive domestic growth
51
“China income level of a large number of residents in rural
areas and the central and western regions is still low. The task of
alleviating poverty and revitalizing rural areas is very arduous.
At the same time, it should also be noted that as the Chinese
economy continues to develop, more and more low-income and
lower than middle-income groups will be converted into
middle-income people. (China aim to eliminate rural poverty
until 2020) China’s domestic market has great potential and
there is no end to its development”
——NBS
China has over 600 million poor with 1000 RMB monthly
income, accounting for 43% of its total population
Data source: Linkedin; South China Morning Post

Short term shopping vouchers give an important impulses for
domestic economy recovery
52

Domestic tourism pick ups for Dragon Boat Festival
OTA platforms saw the increase of bookings of travel-
related products by two digits
• Trip.com reports an increase of bookings of hotels, flights,
train tickets as well as other tourism products by 10% (from
June 8 to 14 on average from the previous week)
• Meituan Dianping reported that the average daily bookings
of hotels on its platform jumped by 16% compared to the
last weekend of May. Among them, luxury and boutique
hotels have seen a noticeable growth in demand.
• Mafengwo shared insights on domestic travel destinations,
highlighting that destinations like Inner Mongolia, Xinjiang
and Qinghai Province have been top picks
Dragon Boat Festival tourism rebounds to over 50% of
the same period 2019, post-90s are the main consumers
Qingming
Festival
May Day
holiday
Dragon Boat
Festival
Dragon Boat Festival travel enthusiasm surpasses
Qingming, lower than May Day holiday
2019 2020
Almost 40%
of 2019
Almost 60%
of 2019
Over 50% of
2019
55
Thanks to Dragon Boat Festival, travel-related bookings for the holiday have witnessed an uptick shown by data
from various online travel agencies (OTAs).
post-90s
post-80s
post-00s
before-
80s
Sources: CGTV, fliggy
From Fliggy

Domestic air travel has recovered to 60%, less than expected.
The upcoming summer holiday may further drive recovery
56
Domestic air travel recovery
Data source: Air4Casts, Chozan
60%
50%
Hotel booking recovery
Reasons for not fully recovery:
1. Safety concern – prefer short-term & self-drive; avoid crowd place
2. Regulation related (COVID test needed for certain area, company regulation)

Chinas Civil Aviation Administration relaxed its flight restrictions,
more international airlines resume flights to China
57
Air France
Air France announced that it will resume
service to Shanghai with one flight a week.
The airline's first flight is scheduled to
depart from Paris on Jun 18th and arrive at
Shanghai on Jun 19th.
Besides, more overseas carriers including Turkish Airlines, Lufthansa, Air New Zealand,
Delta Air Lines, United Airlines and Virgin Atlantic have been approved to resume flights
into Shanghai after suspending flights to China due to the COVID-19 epidemic for nearly
five months.
Sources: Xinhua, Airlines Official Site
• The Civil Aviation Administration of China
(CAAC) on June 4 relaxed its flight restrictions
for international carriers and introduced the
new restrictions called Circuit-breaker Rules.
• It mandate that all incoming passengers to
China must be tested for the coronavirus. If 5+
passengers on the same flight test positive,
that airline will be suspended for one week. If
10+ passengers on one flight test positive, the
suspension increases to four weeks. The rules
apply to all flights into China, and passengers
are tested on arrival.
• CAAC issued its first "circuit-breaker" directive
on Jun 14, suspending China Southern Airlines’
flights between Bangladesh and Guangzhou for
four weeks from June 22 after 17 passengers
tested positive for the coronavirus.
Finnair
Finnair said on its official account on
WeChat & Weibo that it would resume
passenger flights to China mainland
beginning in July. It also posted a short
video to show the strengthened cleaning,
disinfection and protective measures.

Also the European Union is starting to lift some travel
restrictions by July 1st
58
The EU has decided that from Wednesday, July 1st EU borders
will be reopened to citizens from 15 non-EU countries. The
unanimous decision by the European Council is not legally
binding, so states can choose not to open up to all those
countries.
The so-called "safe destinations" are: Algeria, Australia, Canada,
Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda,
Serbia, South Korea, Thailand, Tunisia and Uruguay. The UK and
four other non-EU states - Switzerland, Iceland, Liechtenstein
and Norway - are automatically included as "safe".
Source: bbc.com
China is on the list of potential safe countries, pending that China reciprocates and lifts restrictions for EU citizen
itself. The lifted restrictions would mean open season for Chinese travelers and good news for luxury brands.

China Eastern Airlines offers special deal on weekend flights
59
• The Special Deal costs ￥3322(~$470) and will be expired on
Dec 31, 2020. It is only bought and booked on official APP &
mini-program.
• The special deal offers unlimited weekend flights in economy
class within China mainland. But it requires booking for 5 days
in advance and cancellation for 4 days in advance.
• The primary audience is price-sensitive leisure travelers due to
the strict booking & cancellation rules. It would boost demand
of domestic travel in the second half of this year.
• China Eastern seizes the opportunity of 6.18 mid-year
shopping festival to drive positive cash flows while the whole
airline industry is suffering through the coronavirus crisis.
Data Source: Airline Official Site

Luxury industry depends more on Chinese shoppers: shifting
to more domestically online and offline
61
China offline shopping mall daily traffic recovered level compared to pre-COVID by
different mall type (May average)
77.5%
78.5%
80.0%
80.8%
Mainstream mall
Mid-level mall
Premium mall
Luxury mall
Data source: Bain; Win data, JD
The domestic luxury buying trend see from both offline and online
During 618, JD reported over 100% sales of luxury products YoY. More than 100
luxury brands increased 10x YoY

Celebrity endorsements are changing in China by Covid-19
Giving KOLs greater
recognition
• Celebrities have become more
approachable and accessible to the
public now that KOLs have
accumulated large followings
thanks to their professionalized
social media management.
• The roles of celebrities and KOLs
are now merging into each other.
the recognition of successful KOLs
has reached a superstar dimension
to where they can now be
considered the “new celebrities.”
Approaching the idol
economy with new variations
• Campaigns are shifting away
from solely portraying the youth
and perfect appearances and
towards displaying a celebrity’s
personality.
• Brands should go a step further
in their collaboration with idols
and find a way to differentiate
from others. One way is to make
the personality shine through
and be in line with the brand but
not overshadowing it.
Diversifying celebrity
representation
• When brands gauge celebrities for
potential collaborations, the matrix
that they refer to consists of their
followers’ buying power along with
the celebrity’s popularity and
reputation. Instead of solely
leaning on young idols, diversified
celebrity representation will better
engage different customer targets.
• Experienced brands now choose to
collaborate with multiple
celebrities to help them manage
these risks.
Souce: https://jingdaily.com/why-celebrity-endorsements-are-drastically-changing-in-china/ 62

As the epidemic is under control in most regions, jewelry brands
restart investing in media, especially during holidays
TIFFANYCARTIER
PANDORA CHOW SANG SANG
• Due to COVID-19, the media spending of jewelry market was -54%
lower in 2020.1-5 vs 2019.1-5.
• Many jewelry brands began to devote more budget for 520 period;
• Total spending see significant increase in May
Data Source: iResearch & Adpower monitoring spending , Jewelry category, Jan.- May 2019-2020
BVLGARI
733
815 788
750 692
644
203 222
255
416
200
300
400
500
600
700
800
900
Jan. (CNY) Feb. (VD) Mar. (IWD) Apr. May (MD & 520)
2019-2020 Jan.-May Jewelry Market Media SPD（Mil.）
2019 2020
63

Cartier used multiple stars and presence on
top apps to drive exposure Campaign Summary
Key Takeaways
Result
➢ Campaign Period: May.6 – May.16, 2020
➢ Est. Budget: 12Mil
(Mobile App-3.5Mil.; Paid Social-8.5Mil.)
➢ Market: Nationwide
➢ Key Platform:
➢ Highlight:
• Cartier leverage three celebrities influence and big exposure on lifestyle hero
apps and social media for Trinity relaunch
• All landing page is link to E-commerce(mini program& Tmall), which directly
sales driven
➢ Learning:
• Celebrities influence of KV helps to drive traffic and catch eyeball on social
media, especially young targets, who are willing to engage with brand and
support their idols
• WeChat moment is still the key channel to drive traffic to mini-program, and
media like Weibo and Douyin is helpful for Tmall traffic driven
➢ Performance:
• Weibo Hot search topic Page–Reads: 350,000,000;
Comment: 4,286,000
• Mobile Average CTR – 1.43%
Paid SocialMobile App
Mobile App(News/Camera/Video Apps)
Paid Social (WeChat/Weibo/Douyin)
Link to mini program
Opening Page Oneshot
WeChat Moment
Ads
Hot Search Fans tool Top View
Video record
Fans Headline
64

Cloud Exploration
• Malls including K11, BFC and TX in Shanghai,
Guangzhou, Wuhan, Shenyang ran a campaign with
Red from April 25th to May 10th;
• Nearly 30 KOLs/streamers on Red broadcasted
themselves at the malls and visited different stores to
explore and interact with brand founder or sales rep.;
• Through lively broadcasting, interaction and online
giveaways, viewers were intrigued and invited to visit;
• Viewers and visitors also received coupon or gifts by
offline visiting stores and post content on Red, in any of
the following forms: notes, video, Vlog;
• Online experience (content, live-streaming) triggered
viewers’ intention to visit and led to offline experience
(offline visit) and more content were generated to
enhance online experience;
• Win-Win for all parties:
• Red - UGC, Traffic;
• Brands - UGC, Traffic, Sales, Awareness;
• Malls - UGC, Revenue, Traffic, Awareness;
• KOL/Streamer - Revenue, Content, Traffic;
• Consumers - Coupon, Gifts, Entertainment
65
Shopping malls cooperate with Red to
drive leads
Data Source: Desk Research

In May auto market gained 6% YoY and grew 19% compared to
April
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
0
500
1,000
1,500
2,000
2,500
3,000
Monthly car sales in China
67
• The auto market is posting gradual rebound as consumers' pent-up demand have been unleashed as companies
resume to production, employment stabilizing policies launched and the incentives to spur car sales. Total car sales
has gained 6% YoY growth.
• The upturn in PV sales resulted from the substantial growth in SUV (+20%) and minibus sales (+47%). However, the
increase was somewhat offset by the downturn in car (-1%) and MPV sales(-25%). Total PV sales gained 7% growth
vs. Apr.
• The NEV sales in May dwindled 23.5% over a year ago to around 82,000 units, while still increased 14% than Apr.
Source: China Association of Automobile Manufacturers (CAAM),China Passenger Car Association (CPCA)
Unit: Thousand

More focus on promising Intelligent-Connected Vehicles (ICV) industry
68
• The Two Sessions focuses on ICV development and
raised several proposals to support its technology
development, pilot projects and new infrastructure
construction.
• Shenzhen has issued a string of measures to support
orderly and sound development of local ICV industry,
with attractive capital fund encouragement, intelligent
road traffic management improvement and beneficial
talents policy
• Bytedance has set up an ICV team for In-vehicle
Infotainment system solution and ICV in-vehicle system,
by taking advantage of its great user base, owned auto
vertical platform (Dongchedi), and tech ability from
Smartisan.
Source: Gasgoo; CITIC Securities, Bytedance: New Entrants to ICV
2016 2017 2018 2019E 2020E 2021E
Market Size 37 43 49 57 98 115
Growth Rate 15% 17% 14% 18% 70% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
20
40
60
80
100
120
140
ICV Market Size (With Prediction)
China ICV market size is predicted to reach 100 billion till 2021, according to
CCIDWise, Dec 2018.
Unit: Billion RMB

Cadillac “Second Time Proverbs” to highlight the importance of
rear-drive
69
• By sharing the life experience that help to
avoid pain points, Cadillac stressed out the
importance and necessity of rear-drive for
cars, especially luxury cars.
• Cadillac aims at consumers with certain
life experience and purchase power by
brought out scenes including buying 2nd
house, having 2nd baby, etc.
• The video is widely spread on social
platforms and caused a lot of discussion:
WeChat KOL (GQ) article reached
100,000+ reading, Weibo KOL (Fuma) post
got 3,000+ likes.
Source: Cadillac Official; https://mp.weixin.qq.com/s/DJ13TkLRodBnuvGng8Qc2w; https://weibo.com/1837638812/J56XUf0kq

Cloud Exploration
Continental cooperated with Auto Lab on a new
program: “Continental Tech College”, to introduce
the brand techs on Weibo.
The program leveraged 12 KOLs from Auto and
travel industry to release high quality video
content for consumer education.
70
Continental introduced new product
tech with social KOLs
Video link: https://weibo.com/tv/v/J5z971EaS?fid=1034:4513265993056267

The pandemic has seen strong growth from China's leading players
in the frozen and processed seafood space
72
Mintel, forecasts the frozen ready-to-eat-meals market and the
chilled ready-meals market will grow at value CAGRs of 9.9
percent and 14.6 percent, respectively, over the period 2018-
2023.
The utilization of new sales channels and greater product
innovation are also new trends in China. Long associated with
value-priced frozen snacks, Synear Food cooperated with online
retailer Ele.me to introduce a new restaurant called “Synear
Warm Kitchen,” while Wu Da Sao, another frozen foods
specialist, opened a foodservice store inside Hema Fresh, the
online/offline supermarket chain controlled by Alibaba.
Retailer Hema provides branded frozen seafood products that
are well-packaged, of higher quality, or better processed to
people who look for convenience and quality life.
Source: https://www.seafoodsource.com/news/foodservice-retail/chinese-market-undergoing-drastic-change-through-coronavirus-crisis

73
Fulinmen livestream by crossover
cooperation during 618
Campaign Summary
• Fulinmen is a food brand with long history, which involves oil,
sauce, rice, sugar and grains.
• Livestream is more important in marketing field under
pandemic. Fulinmen create a feast of “大吃一夏” during 618,
which launched mainly by livestream and combine current
hotspots.
• Fulinmen livestream by crossover cooperation and cross-
regional by fusion recreational scene and consumptive scene
to interact with audiences and promote online sales and
offline traffic
Operational Format
• Livestream
• Pop-up Shop
• Dinner Scene
• Crossover Cooperation
Key Takeaways
• Livestream: Livestream with Chime-Long and implant food
scene to display charm of Cantonese cuisine and promote
online sales and offline traffic.
• Pop-up Shop: Spot of offline livestream called “饭局的诱惑”
with cartoon elements, release by social power and adopt
booth format which is popular under pandemic.
• Dinner Scene: Variety of dinner with elements of cross-talk,
rap commentary and dialectal introduction of snack in Beijing,
Shanghai, Chongqing and Changsha, which can cover
audiences from multi-platform and extend launched scope.
• Crossover Cooperation: Expand audiences in new field by
crossover cooperation to combine cantonese cuisine with
product of Fulinmen to strengthen brand awareness.
Livestream
Fulinmen X Chime-Long
Pop-up Shop
Fulinmen X Chime-Long + JD
Dinner Scene
Fulinmen X Dmall APP + Hema APP + Kandian Mini-
Program + Better Gou
Crossover Cooperation
Fulinmen X Chime-Long + JD

75
1. Adapt your road map to recoup business on the latest positive
consumer trend and competitive intensity uplift
a) Many categories show positive developments over the last couple of weeks. Retail
development recovered till only -2.8% in May, with positive growth expected back in Q4. This
also attracts competition, with more intensity and unexpected tactics. Also more
international brands focus on recouping business and shifting investing to China.
b) Many competitors still keep on uplifting their digital activations including life stream and EC,
which implies you still need to keep your digital SOV. However this doesn’t mean always to
uplift your digital activations as well. It has become more difficult to push on activation only
as many brands have followed this path, while more differentiation is needed.

76
2. Keep to focusing on products and
messages that enable to enjoy daily life
a) Consumers still are concerned about global developments,
economic crises, 2nd waves.
b) Small scale enjoyment in daily life still shows highest
spend: indulgence food & beverage, OOH activities,
domestic travel, home decoration, sports and accessible
priced apparel.
c) Solutions for barriers of longer term concern, like financial
insecurity, education and health shown effective.

77
3. Create more consistency in activations to drive synergy and
brand pull effect
a) When increasing the number of activations and tactical campaigns including live streaming,
EC and social commerce activities, consistency is important. It creates efficiency which is
important as cost of acquisition in China keep on increasing, more to be expected in H2.
b) Especially now it is important to create brand consistency, relating to your overarching brand
message. You can not base your long term recoup on activations only. Sales support by a full
program of tactical campaigns without brand pull effect is inefficient over time. You need to
maintain additional brand pull effect for a long post period to come.

78
4. More opportunities than before to resonate on collective
benefits
a) Support of local economy, domestic production and communities get more sympathy.
b) We see that national pride resonance in your messaging continues being appreciated,
especially by younger audiences.

79
5. Update your media strategy to the latest developments
a) Keep using new digital formats (like short video, live streaming, social commerce) and new
platforms that have risen during the outbreak, as they have been proven more meaningful media.
b) Try the new formats of booming digital media. Forerunners presence pays off.
c) For outdoor, smaller formats in commuting routes, residential areas, and elevator areas,
especially in CBDs keep on being effected, but inventories are low as more brands discovered
these formats being effective.
d) Ensure locking in premium media resources. Give your media agency some bandwidth and
leeway beyond standard formats and requirements to reserve and book premium resources on
your behalf, as speed to market delivers impact.
e) IP cooperation development is in full swing. Evaluate with your client service- and media planning
team how the new formats fit in your strategy.
Additional notes:
It is estimated that TV, online video, short video, news app’s usage and stickiness will greatly increase. So far, the Chinese national and top media have opened “Fight Against Coronavirus” column to rolling
update the real-time epidemic status from Jan 20,2020. Which almost fully catch the Chinese audience’s attention.

Sources: Havas prosumer report
In June we hosted our Market Pulse Seminar
80

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.
81
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