Why Guo Jingming Cried, and the Vanishing Voice of the Post-80s | QDaily 2017 Trend Insights, No. 4

Why has every once red-hot product, company and emblematic figure failed to carry over to the next generation of consumers — why did even Guo Jingming, who seemed to have timing, terrain and allies all on his side, fail this completely this year?

Fast-fashion logic everywhere, people buying more often, middle-class insecurity, demand bent out of shape by demographics… In 2017, the phrase "consumption upgrade" alone will no longer tell you where business is heading.

QDaily's 2017 Trend Insights series takes up these questions from four different angles, one per article. This is the last one: demographics.

Guo Jingming, brimming with confidence, probably never imagined he would lose.

The things that had carried him from one success to the next now seemed to be working against him. Before this Waterloo in the summer of 2016, every "tailwind" looked to be blowing his way — you could even conclude that Guo Jingming had caught the best possible moment.

Right: the fan economy. Guo Jingming may have been one of its earliest beneficiaries. IP: judging by the novel behind L.O.R.D: Legend of Ravaging Dynasties (《爵迹》), it was no runaway hit, but it had a decent foundation. The wave of film and television money that surged from 2015 on was never going to miss Guo Jingming, or this famous piece of IP — investment in those two years really did reach tailwind strength. And then the stars: celebrities were the most powerful force in the film and TV market in those years, and the cast of L.O.R.D included Fan Bingbing, Kris Wu, Chen Xuedong and Yang Mi. Add Guo Jingming's own pull, and everything looked to be under control.

He lost anyway. L.O.R.D scored 3.7 on Douban, Ice Fantasy (《幻城》) sank to 3.0 — and if a score measures nothing but taste, then consider this: L.O.R.D took 388 million yuan at the box office against production costs of roughly 150 million yuan, which means the film by itself could never turn a profit for its investors. As for the TV series Ice Fantasy, even in its first days on air its ratings on Hunan TV never passed 1%, and as the show wound toward its finale they slid further, to around 0.4%.

The peak of all this misfortune came around October 3, at L.O.R.D's last promotional roadshow, when Guo Jingming cried and said, "Would you only be happy if I were dead?" Unfortunately, the line drew even harsher reactions on social media — beyond "sore loser," there was plenty of far more scathing feedback.

Before we try to sum up why this happened, look at two other cases.

The first is Xiaomi. Founder Lei Jun ran into trouble of his own in 2016. From 2015 on, Xiaomi's phones badly lost momentum — they could not beat the powerful, hard-charging Huawei, and they could not beat the old-fashioned, second-tier Oppo and Vivo either.

Lei Jun used to love pointing out that his "highest-premium" products were little figurines that would otherwise sell for a few dozen yuan: worth almost nothing in themselves, but users were happy to buy them to show their love for Xiaomi. In the end, that obviously could not save Xiaomi's phone business.

If you remember, in 2014 Li Wanqiang, the vice president in charge of marketing, published a whole book, The Sense of Participation (《参与感》), on how Xiaomi built up its fan base. Gather your first fans through forums, then build them into a community so they feel like Xiaomi's friends — that was what Li Wanqiang meant by a sense of participation.

Today that sense of participation seems to have faded too.

The second case involves older products — Kaixin001, for instance, China's imitation of Facebook.

Kaixin001 peaked in December 2009, with nearly 70 million registered users, more than 2 billion page views and over 20 million daily logins. Unfortunately, none of that advantage carried over to mobile. On July 20, 2016, Kaixin001 announced it was selling itself to Sunwin Intelligent, a company listed on the A-share market. Founder Cheng Binghao resigned.

We could list examples that look entirely unrelated: the singer Lisa Ono fading in China; "petty bourgeois," once a word for a whole style of consumption, dropping out of use; Mop and Xici Hutong, online forums that once thrived and drew huge numbers of post-80s users, now half abandoned… Douban is doing a little better, but it is struggling too.

If you look at all of this casually, it seems to come from changes in the wider environment — the rise of the mobile internet, the arrival of younger consumers, channels splintering, information splintering.

But you can also ask a different question: why has every one of these once red-hot products, companies and emblematic figures failed to carry over to the next generation of consumers — why did even Guo Jingming, who seemed to have everything on his side, fail this completely?

Guo Jingming's Failure: He Misjudged His Audience

From 2003 to 2016 was Guo Jingming's golden age.

He got his start in the New Concept Writing Competition, and went on to show a real grip on commercial opportunity and on demand. The model he built looks textbook-standard in hindsight. Born in Sichuan in 1983, he won first prize in the New Concept Writing Competition, run by Mengya magazine, in both 2001 and 2002. He quickly published two novels, Ice Fantasy and How Many Flowers Have Fallen in My Dream (《梦里花落知多少》), along with two essay collections, which built him a large fan base — and even after How Many Flowers Have Fallen in My Dream was accused of plagiarizing Zhuang Yu's In and Out of the Circle (《圈里圈外》), his fans' enthusiasm did not dim.

In 2004 Guo Jingming set up the Island studio and began publishing the magazine Island (《岛》); Island later spun off ZUI Novel (《最小说》), which became his platform for launching new young-adult authors. In the same years he published one novel after another — 1995–2005: The Summer Has Yet to Come (《1995—2005 夏至未至》), Cry Me a Sad River (《悲伤逆流成河》), Tiny Times (《小时代》) and L.O.R.D — each selling more than a million copies.

What really carried Guo Jingming to the top was Tiny Times. In 2012 he announced he would direct and write the Tiny Times films. Over the next three years the four Tiny Times movies grossed nearly 1.8 billion yuan against production costs of just 231 million yuan — and that is before counting the advertising, sponsorship and venue support various sponsors threw in, worth nearly 70 million to 80 million yuan.

Look closely, though. After his early campus-youth books took off, Guo Jingming's work splits roughly in two: urban consumerist stories, of which Tiny Times is the model, and fantasy, which covers both the early Ice Fantasy and the later L.O.R.D.

On the fantasy side, the side that flopped, what Guo Jingming — and his over-eager investors — may have missed is this: the early readers of the books and the new audience the screen adaptations were chasing were two completely different generations.

The readers were mostly post-80s. When Ice Fantasy came out, the market held almost no fantasy fiction, and the book's voice and emotional core stood apart besides. Move to 2016, and the people interested in fantasy are mostly post-90s, possibly younger. After years of growth in fantasy fiction both in print and online, they have seen far more of it, and they have their own standards for visual effects and for storytelling.

That is also why L.O.R.D drew so much mockery after billing itself as China's answer to A Song of Ice and Fire. Guo Jingming had wandered into territory he was not good at without noticing, and his audience had changed completely without his noticing that either — and the production itself showed little sincerity, falling back yet again into imitation.

One last possibility: the heat of the "tailwinds" made Guo Jingming careless.

These Disappointing Products: Risen With the Post-80s, Fallen With the Post-80s

In 2010, its hottest year, a report by iResearch found that post-80s users made up about 50% of Kaixin001's core user base. You could see similar numbers at Mop, Xici Hutong and Douban.

Xiaomi's users skewed post-80s too. In 2014 AVC surveyed 230,000 fans on Xiaomi's forums and found that 53.9% of them were post-80s or post-85s. That year Xiaomi sold 61.12 million phones, still growing at a startling rate: annual sales were 7.19 million units in 2012, 18.7 million in 2013 and more than 70 million in 2015.

It should be said that Xiaomi also has a great many post-90s users — its products still hold a sizable edge on value for money and on brand marketing, one reason that slower growth has not yet put it in real danger.

The full generational arc of the post-80s shows most clearly in the rise and fall of Kaixin001. Founded in 2008, Kaixin001 was pitched at white-collar socializing. Games like "move the car," "steal vegetables" and "buy and sell slaves" pulled in huge numbers of young people just starting out at work — stress relief that was also social, nothing like the dull, formal workplace tools that came before.

By 2010, though, user activity was already falling. At the end of April 2012 Kaixin001 passed 130 million registered users, but by then engagement was far below what it had been.

Looking back at the collapse of this star product, many people listed causes: competition and copying from other social products, real-name registration rules on social networks, its own thin innovation. Few noticed that Kaixin001 had at least four years to fight for its life before the decline became obvious. The management team certainly had its limits, but that alone probably cannot explain where everyone who once loved Kaixin001 went.

The likeliest answer: most of them had reached the point of starting a family or building a career, and no longer had the hours to spend on a social network that demanded so much upkeep. The users who took up Kaixin001 in 2008 were mostly born before 1985; by 2012 even the youngest of them were 27. Even without family pressure, their work pressure had grown a lot since they first started out. What suited this group then was a more fragmented way of socializing — Weibo, for instance.

Why Did the Post-80s Never Build Real Clout?

A stable, large enough consumer group can support a stable business later on — you already know the logic. And that is exactly what never happened with the post-80s.

Look at this chart, built from China's 2010 census.

Among all the bars, the one for people born between 1980 and 1984 is relatively short, the 1985-89 cohort is the biggest, and the 1990-94 cohort is nearly the equal of the cohort born a decade before it.

Our reading is this: the post-80s have no advantage in sheer numbers, and the older, more settled half of them could fairly be called weak. That is what doomed the products built around this group — they could not withstand the shock of passing time and shifting consumption, and were replaced by the products favored by an equally large post-90s generation.

It is also why, in 2016 and in 2015 before it, you saw company after company scrambling to remake itself for the young, why consumption styles that stood for the new generation rose so fast, and why consulting firms rushed out rankings of the favorite products of post-90s and even post-95s consumers and issued young-consumer insight reports — reports whose biases and errors were often good for a bitter laugh.

In 2016 the post-80s were 26 to 36 years old. Many were racing to secure their footing at work and start families, feeling for the first time the squeeze of "old parents above, small children below" — and, now that family-planning policy had loosened, weighing whether to add another member to the household. Some, knocked about by setbacks, false starts and imbalances, were starting to experience what gets called a midlife crisis.

Given how this group lives, it makes perfect sense that the products built on post-80s users ran into trouble. Worth noting: the ones hit hardest were probably cultural and social products.

A Few More Words About the Post-80s Label Itself

The term "post-80s" first appeared in 2003, when the online writer Gong Xiaobing posted an essay titled "A Summary: On the Post-80s" (《总结：关于 80 后》) on Tianya. The term, meaning people born after 1980, was picked up quickly and widely by media outlets and publishers. But the post-80s had already begun drawing attention before that, mainly because the New Concept Writing Competition, run by Mengya magazine, had produced a crop of post-80s writers, with Han Han and Guo Jingming at the front.

The most concentrated argument about this generation happened around 2005.

A 2005 report from the China Human Resources Development Network claimed that, compared with every other age group, young people born after 1980 were the least dedicated to their jobs. In 2006,

the post-60s writer Jian Ning wrote in Southern Metropolis Weekly that "the post-80s generation carries widespread flaws, some of them fatal."

The same charges now transfer to the post-90s without friction, but look back and you find that those born between 1980 and 1984, as the first true generation of only children, faced unprecedented controversy. The labels — "little emperors," "little suns," "self-centered" — stuck to them for years. The effects of the materialism that arrived after reform and opening up landed on this group all at once. What counts as "consumption upgrade" for the post-90s could, for people born before 1985, still be chewed over again and again as a social problem.

The most important social change the whole post-80s generation lived through was probably the shift from the internet to the mobile internet. In China it happened so fast that the rise and fall of one medium after another all landed inside their formative years.

The first medium they met was the television — by the late 1990s TV penetration had climbed past 100%, and the screens kept getting bigger. Then, in the 2000s, the post-80s lived through the spread of personal computers and the internet, with internet penetration rising from 7.23% in 2004 to 42.1% in 2012. After that came the move from the PC to the phone.

The mobile shift seems to have begun in 2010. That year,

SMS revenue at the major carriers began to fall, while the number of people using instant messaging like Fetion and mobile QQ began to rise. Smartphone shipments also started climbing steeply in 2010. In 2009 they were only 20 million units; by 2012 they had jumped to 170 million, and by 2014 they reached 420 million.

Through all this upheaval, the post-80s — especially those born between 1980 and 1984 — look more like a product of China's transitional phase. The products that mattered most in their formative years, Kaixin001 and online games, mostly stayed on the PC. The post-80s loved them, and in the end the wave of the mobile internet washed them all away.

The Best Case Study in Generational Change: the Baby Boom

The baby boomers are the Americans born between 1945 and 1964. The Second World War had just ended, the US economy was growing fast, and Americans who finally had a chance to catch their breath began having children in large numbers. The generation known as the baby boomers came to nearly 80 million people, against 30 million in the Swing Generation and 45 million in Generation X before the boom.

The American feminist Susan Douglas described how the baby boomers changed America this way: "Once you become a market — especially a huge market — you can change history."

Imagine it: 80 million people arriving in under 20 years. Their demands really could change a great deal. As babies they needed toys. Growing up, they took to Coca-Cola and McDonald's and other consumer products, and drove those companies' expansion. As adults, they made the housing and car markets swell fast.

At the same time, the boomers rode the spread of new things like the car and the television, which cemented their influence further.

In the 1950s, boomers' parents picked larger vehicles because they had to ferry their children around. By the 1960s, as the boomers grew up and started chasing cool, the sporty Ford Mustang and the newly styled Volkswagen Beetle became the mainstream. Then in the 1970s and 1980s, as the boomers began to feel social pressure, the thriftier Toyota Corolla and Honda Accord seized the moment and broke quickly into the American market.

Because the car industry mobilizes enormous resources, labor and capital, and is one of America's most important pillar industries, the industry moved with the boomers and the boomers in turn moved the whole US economy. They turned television and cars into ordinary, basic consumption, and drove more than half a century of American growth.

Beyond the consumer market, the boomers also changed American culture. Television spread rapidly across postwar America and national broadcast networks were built; through these shared experiences the boomers formed a common character, in what has been called the first unified national culture. That culture includes many things now treated as synonymous with America: rock and roll, sexual liberation, hippies, the civil rights movement.

By 2008 the baby boomers held $13 trillion in investable assets and 50% of disposable income, with total wealth of about $40 trillion, roughly 70% of all US household wealth — the generation that ran America, literally.

Now look at Generation X and Generation Y, who came after them. Their numbers fell far short of the boomers', so they struggled to build a culture that could stand against the boomers' — which let the boomers' influence run on.

Today the boomers have reached retirement age. They are still an enormous group, and they are generating enormous demand for elder care.

So Who Actually Calls the Shots?

What the baby boomers and the US economy show is that population is a basic element of economic development. Find the generation that can shape a whole society, and you can read the direction of business for decades. The same holds in China today, which makes finding that generation the most important question there is.

As noted above, the post-80s probably cannot carry that weight. Phones and the mobile internet have become infrastructure, and the genuinely mature products get built at this stage. That is the environment the post-90s and post-95s grew up in. Young people today are not fazed by typing long blocks of text on a phone or a tablet — even if they find it a bit inconvenient — and they are not embarrassed to express every shade of feeling with emoticons.

On social media, WeChat has taken over Facebook's role in China. By Tencent's latest quarterly results, WeChat has reached 846 million users. Growth is widely thought to have topped out, but as basic mobile-internet infrastructure WeChat still shows little sign of decline.

In entertainment spending, the music business has more or less settled. The MP3 download, which wrecked the music industry and grew up alongside the post-80s, has largely vanished. What has risen in its place, and what the post-90s prefer, is streaming. A report from Analysys found that users 24 and under — the post-90s — already make up more than 40% of the user base at QQ Music, Kugou Music, Xiami Music and NetEase Cloud Music; count the post-85s as well, and the share reaches 70%.

Anime and ACG culture belong to post-90s habits too. Bilibili's total user base reached 50 million by the end of 2015, 75% of them under 24 — that is, post-90s. In an ACG report from iResearch, post-90s, post-95s and post-00s users made up 93.4% of the total, and more than 80% were still students. That is why ACG culture became a tailwind in investors' eyes, and it may well become the mainstream consumption habit in Chinese society for a long time.

By comparison, the post-80s were a subject of public argument again and again through the first ten or twenty years of their lives, but mostly as juniors and as a symbol of youth, sized up by the generation above them. Now that they have genuinely become society's backbone, they have turned into the generation most likely to be overlooked.

QDaily's first three Trend Insights pieces were all, in the end, about the shifts in consumption that come with generational change. Consulting firms may always over-read the post-90s, but the instinct behind it is not wrong: capture the post-90s, capture the young.

If any of this holds a lesson for people running companies, it might be this question: are you building a business that serves a transitional generation, or one that serves a group whose voice will still carry ten or twenty years from now?

To put it in terms of Guo Jingming's story: if he had grasped earlier how much today's young people already know about fantasy, he would not have cried.

Graphics: Feng Xiuxia

Cover image: a film still