Elderly Chinese Mobile User

Top 5 trends International brand should be aware of upon Chinese Social Media in 2014

Western brands that are trying to get to grips with social media in China know that it is a fast paced and often complex arena and, with nearly 600 million users and a year on year growth of over 165% for mobile shopping, it’s something they have to work hard to keep up with.

1. China gets the exercise bug

GarminForERun

Advert for the Garmin Forerunner 220, a wearable smart device. (File photo courtesy of Garmin)

Well into 2014, microblogging platform WeChat are forging into new territory by teaming up with third party vendors to promote smart hardware like fitness bracelets. As with Western users, Chinese netizens are getting the exercise bug, particularly in the more affluent Tier 1 and 2 cities.

According to Want China Times, this month saw “iHealth, Huawei Honor, Lifesense and Codoon put their respective WeChat version of smart bracelets for sale on platforms such as Jingdong Mall (JD.com) after the WeChat team closely worked with these vendors for nearly half a year.”

It may be a sign that WeChat is beginning to collaborate more with third party providers, though they are keeping their cards close to their chest. The integration allows WeChat users to put on their smart bracelets, measure their sporting or exercise performance and then share it with friends on the popularmicroblogging platform.

2 . Search targets “big data” in China

Internet search giant Baidu is thinking about big data as they move into the later parts of 2014. With trillions of web pages in storage and billions of searches conducted every day, Baidu is China’s major search engine, modelled on Google, but perhaps slightly behind in developmental terms. According to Wang Jing, vice president of Engineering: “Baidu hopes to build a big data engine on the massive data the company collected over the years and offer it to traditional businesses.”  

3. Online to offline is getting bigger

Elderly Chinese Mobile User

Elderly Chinese Mobile User (photo from http://www.chinadaily.com.cn)

Online to offline, whereby a mobile or pc is used to order something like a taxi is set to become more popular as offline businesses start to get a slice of the ecommerce pie. Tencent has been leading the way mainly because of its 355 million monthly active users and others may well jump on the band wagon in the future.

4. Chinese companies are becoming more competitive

China’s own companies are beginning to realise the power that can be had from harnessing social media and are starting to become more visible, competing with Western brands who have long been working hard to make China’s various platforms work for them.

According to Econsultancy.com: “The trend in China is towards using social media as a bridge between consumer and company. And as 500m of China’s 618m internet users use a mobile device to access the internet, m-commerce has become even more important.” 

ChinaWorldCupFever

(photo from ChinaDaily.cn)

5. China gets World Cup fever

And finally, although they didn’t have a team in the tournament, China’s netizens have been keeping a close eye on the World Cup this year with interest peaking with around 11 million users including a hashtag in their posts throughout the group stages.

Advertisements
Online Shopping in China

How Social Media is Changing Online Shopping in China

It used to be that your average netizen in China would hook onto one brand and stay with it… not any more

Lately, though, with the rise of social media platforms like WeChat and Weibo and online shopping through internet giants like Alibaba, greater choice has meant that China’s ever growing online army are more likely to follow several brands.

ChineseOnlineShoppingThe younger generation coming through are also more likely to go for quality products and spend more than older netizens who have grown up through a range of social changes and some difficult economic times. There is more disposable income and greater social freedom now than ever before and it is driving the changing landscape of social media and online shopping.

Social Media is Spreading but the Market is Shrinking for Western Brands

With changing infrastructure and increasing popularity, social media is moving out of the Tier 1 and 2 cities into the rest of this large and complicated country. In 2014, rural areas made up nearly half of netizens and instant messaging is the most popular online pursuit with 530 million active users across all platforms. http://socialmediatoday.com/we-are-social-singapore/2350106/understanding-social-media-china-2014

Online Shopping in ChinaIt’s not all good news for social media marketers working to promote Western brands. According to China Daily: “Amid a sluggish consumer goods market in China, foreign brands are facing pressure, with six out of 10 losing market share to their domestic rivals last year.”

It seems that the domestic market is forging ahead and capturing the attention of netizens. For instance, western soft drinks brands lost a 6.3% share of the market while domestic carbonated brands such as Wahaha “increased market share by 3.8 percent through product innovation and large scale marketing,” according to China Daily. http://www.chinadaily.com.cn/business/2014-07/02/content_17635342.htm

Lower Tier Cities Spend as Much as Higher Ones

The value of rural markets for Western brands is becoming more and more important and, with their greater connectivity, more accessible. In fact, lower tier cities, though having smaller incomes, spend more of their disposable income on online shopping. Brick and mortar stores are also still important to netizens in all areas with over 70% opting to pop into a shop to check out their possible purchase ‘in the flesh’ before buying online.

China is Investing in Infrastructure

The growth of domestic markets that are beginning to compete with high end Western brands has also led to greater investment in infrastructure. After all, if you are selling a lot of products online then you will need adequate storage space.

According to Reuters: “It is estimated that in the next 15 years China will need to invest $2.5 trillion in land and warehouse construction, equating to 2.4 million square metres of storage space.” http://www.marketmechina.com/four-key-facts-e-commerce-china/

Online-Shopper-chinaThere are, of course difference between the consumers you find in lower tier cities and those you find in the more exclusive neighbourhoods of Shanghai. For instance, lower tier netizens are not used to luxury and tend to focus on value for money and functionality. Higher tier consumers are more likely to buy luxury, ego enhancing products to show off to their friends.

But the landscape is changing and it is doing so quickly, and nowhere is this more obvious than with Chinese domestic brands. According to Forbes: “Chinese firms have great ambitions. For many, building their own company into a global brand that’s accepted by consumers in developed economies is a matter of national pride.” http://www.forbes.com/sites/onmarketing/2014/06/30/chinas-future-in-brand-awareness/

Garnier China

How Brands Have to Adapt their Marketing in China

Brands have long been aware that what sells here in the West doesn’t necessarily sell that well in the East and nowhere is this more noticeable than in China.

Often seen as cut off from the rest of the world, the country represents one of the biggest retail markets for brands and succeeding in it is something akin to the Holy Grail.

According to Start Up China: “A 63% majority of international companies operating in China acknowledged that they needed to alter their product specifically for the Chinese market.  In most cases, this does not mean completely creating a new product or service, but rather making small adjustments to better suit Chinese culture and preferences.”

How Taobao got the edge over EBay taobao

A big difference between the West and countries like China is the way things are paid for, something which eBay were slow to take up.

  • Whereas eBay wanted people to pay by credit card, Taobao realised that many Chinese consumers didn’t have them or were worried about paying online. They introduced a way for a buyer to pay for a product in cash when it was delivered to the door.
  • EBay required sellers to pay for listing a product whereas Taobao decided to make its money from advertising revenue.
  • EBay didn’t particularly like that customer and seller would bargain on the price privately and so didn’t add a chat feature. Taobao accepted that the Chinese way is to haggle over the price and was happy to include a chat function that allowed this to happen.

Localisation is the key

According to Forbes, marketers make the mistake of treating China as one big market: “Treating China as a single market is a flawed concept – it’s 29 different provinces with their own peoples, dialects, customs and brand preferences. Procter & Gamble was one of the few U.S. marketers to realize this early on, investing extensively in proprietary research across multiple cities.”

Garnier ChinaNot only that, but social marketers have to deal with a whole swathe of localised digital platforms such as Weibo and WeChat. China’s social media landscape is vast and complex and choosing the right platform is integral to brand success particularly considering that there are around 500 million netizens and the number is growing.

Beware of bad translation

Many brands, both big and small have fallen foul of poor or ill advised translations of their products and key messages. When Pepsi first ventured into the market its slogan “Pepsi brings you back to life” translated to the Chinese public as “Pepsi brings your ancestors back from the grave” and KFC entered with “Finger licking good” which got translated as “eat your fingers off”.

In truth, many large brands have failed to do the research needed into the culture and customs of their target audience when moving their product into another country.

According to Mike Fromowitz of Ethnicity Multicultural Marketing and Advertising Inc.: “Many international companies have had problems with expanding their brands worldwide because they have failed to put in the research and effort necessary to understand the culture. This has led to several failed brands, to offended consumers, and to the loss of millions of dollars that comes with having to start all over again.”

Is WeChat the First Choice Social Media App?

is Tencent’s WeChat set to be the app of choice for both business and pleasure?

Wechat 4Its growth has been phenomenal in the last 4 years since its launch, with an estimated 355 million users worldwide and a healthy stake in the social media market. But

According to multimedia journalist Paul Bischoff on TechinAsia: “In China, all online communication converges at WeChat. The four-year-old chat app now functions as text messenger, Facebook, Reddit, Skype, IRC chatroom, Meetup, and Instagram – all rolled into one.”

It used to be that apps like Facebook and Twitter would take care of the personal and those such as LinkedIn would satisfy our business and work needs. With WeChat though, we have an app that is trying to break down the barrier between the two. Business meets social and personal. It works well in China’s social media world and it may well be heading West to Wechatchallenge some of our established platforms.

In China, social capital is a vital prerequisite to success. Whereas people in the West might have one account for their personal life and one for business, in China it is often rolled up into one. And something like group chat is very important to our Eastern colleagues.

Networking groups are big in China

WeChat2WeChat groups have a limit to the number of members. You need special permission to run one that has in excess of 100 people and if you run it, you must be able to moderate the content accordingly. For many Chinese businesses, selecting the right group to follow, and networking through it, can bring success and vital information exchanges.

With all its functionality, WeChat is an ideal platform for a varied range of activities from selling online and settling disputes to running a web style seminar. There are predictions that WeChat is going to overtake even Facebook as the world’s premier social marketing tool.

The benefit of Tencent’s platform for Western brands is that it is possible to categorize people according to their location and gender. More than half its users are aged between 25 and 30 and many are white collar workers who reside in first tier cities. And with business merging into personal with many of its users, this provides a unique opportunity for brands hoping to develop a marketing approach tailored for Chinese consumers.

The problem for brands trying to make their way on this multi-faceted platform is that it’s not quite there yet. There are still challenges in marketing your brand on WeChat.

WeChat

According to Xiaofeng Wang from The Forrester Group: “The information that users share on WeChat is private and can be seen only by personally approved friends; as a result, WeChat is used more as a communication tool for friends to keep in contact. Users are less likely to repost brands’ information massively, as marketers expect them to do on Weibo.”

There are also restrictions on brand accounts for how many messages they can send to their fans. With the government crackdown on luxury items and self-indulgent behaviour, Western brands are still weighing up the options and discovering how best to leverage WeChat as a marketing medium. But the truth is that its growth in popularity across the globe may well make it a primary focus for many years to come.

Marketing in China

Do Marketing Departments Need a Deeper Understanding of the Chinese?

The continued explosion of smartphones throughout China will provide marketing teams with major challenges over the next few years. The country is opening up and it’s not just people in Tier 1 and Tier 2 cities, where the affluent few live, that brands will be able to reach out to.

imageThey will have to get to know consumers in smaller cities and towns across the whole of China. And that means discovering a whole new set of marketing demographics.

Tier 1 and 2 cities have long been seen as areas where luxury brands from Rolex to Yves St Laurent have been successful. Even specialist food products are beginning to get a foot hold in these places, fulfilling the need for luxury items that set individual consumers apart from their compatriots.

“Online groceries are developing quickly in Tier 1 and Tier 2 cities,” says Yougang Chen, a McKinsey partner in China. “China’s urban consumers enjoy niche food products, and many kinds of products are not easily available in supermarkets.” (http://www.businessweek.com/articles/2014-02-13/how-to-reach-china-s-avid-online-shoppers)

So who are these new customers hitherto beyond the reach of social media marketers in the West? Around 54% of China’s people live in cities and that figure is growing as more office jobs are created attracting people from the rural areas looking for a better and more prosperous life. China’s cities are divided into tiers from 1-6 depending on population and economic value.

Tier 1 cities such as Beijing and Shanghai represent highly developed markets for Western brands and are home to consumers who are considered affluent. Tier 2 cities such as Nanchang and Zhuhai have been attracting increasing attention from brands because of their growing wealth and greater propensity for consumerism.

Below Tier 1 and 2, the classification, originally introduced by the Chinese government, becomes a little less easy to understand. But the truth of the matter is that smartphones are opening up these areas to greater consumerism and Western brands will have to get to with it.

Brands like Proctor and Gamble have been making contact with the less affluent members of Chinese society for years, even before the advent of social media and internet marketing. And Proctor and Gamble, the maker of household and personal-care products, has three of the top five brands in China: Colgate, Pampers and Crest.

Following some mistakes in the late 80s and early 90s, they realised that a one size fits all strategy wasn’t going to work in China and they had to get to know their consumers better. The way they did this was to send out 1000s of their employees to stay with and observe families around China, using that information to develop the right products for those people and the right marketing approach.

What brands need to understand, if they are going to sell to new markets which are being brought closer by the expansion in smartphone usage, is that they are not a uniform body of people. In other words, they are not the affluent rich.

“The city-tiered approach that Chinese marketers mastered well in traditional and digital marketing won’t work for mobile. Why? Because consumers of all levels of mobile sophistication can be found in all types of cities — and even in rural areas — and engaging them will require a nuanced understanding of a marketer’s particular audience.” Xiaofeng Wang (http://blogs.forrester.com/xiaofeng_wang/14-02-13-how_to_reach_your_unique_mobile_audience_in_china)

Lee Ka Shing

Key Opinion Leaders on Chinese social media

Key Opinion Leaders (KOLs) are important weapons for brands hoping to get their message across on social media, particularly in China. They are the people netizens listen to and the value of their endorsement to your product or service cannot be underestimated.

Chinese Thought LeadersThey use platforms like Sina Weibo and WeChat and they can range from national renowned celebrities, organisations and thinkers, to local experts. Their followers number from a few thousand to millions and they can be travel writers, journalists, chefs, photographers, actors and actresses, pop stars and fashion icons. Their followers trust their opinions on where to go on holiday, what clothes they should wear, what they should eat and what TV they should watch.

Large brands use multiple KOLs to spread branding power, spending significant amounts courting the famous and successful. Smaller brands with more limited budgets can also increase their reach by utilising experts and respected fans who are active on social media and have a good following.

Finding a useful KOL

According to Angie Au-Yeung, National Digital Marketing Manager, China, for Lee Cooper,  there are 3 keys to a successful KOL:

Find a KOL who fits your brand. For instance, if you are selling a fashion product to the young affluent in China’s Tier 1 and 2 cities, you are more likely to choose a young, attractive celebrity KOL rather than a renowned architect or popular politician to market your brand.

What do you want your KOL to do? Do you want them to pass on your brand message in their posts? Do you want them to become an ambassador for your brand? There are various levels a KOL can operate on and getting the right balance is vital for a successful social media campaign.

What are the metrics for your KOL? Fan base size and demographic are important. The rise of smart phone usage in China means that you can reach a wider cross-section of the country than ever before. If you are going to invest time and energy in a KOL then they need to be able to reach out to the people who will be interested in your product.

Engaging with KOL bloggers

Lee Ka ShingBeyond the obvious high-ranking celebrities and others who are in the public eye, there are opportunities for social media branding with China’s large and ever-growing band of bloggers. These are generally people who have a hobby or passion that attracts enough of a following and respect for their opinion to have promise as a promotional tool for brands.

“Building relationships with bloggers in China can be time consuming and requires a degree of commitment but…it can bring fantastic success to a brand in the way of genuine advocacy and provide the local breakthrough endorsement which is essential for traction in China.” Elisa Harca, Marketing Consultant. (http://www.clickz.com/clickz/column/2322997/bloggers-commentators-and-kols-harnessing-the-power-of-chinese-influencers)

More highly valued by consumers than their Western counterparts, discovering valuable KOLs should be a priority for all brands seeking to make inroads into China’s marketplace and sell their products.

Social Media Revolution China

Social media censorship in China and what it means for Western Brands

For brands operating in China’s vast and complex social media landscape, one thing that can’t be avoided is the government’s almost pathological tendency to censor content.

Social-Media-censorship-in-china

(photo via vpnfor.us)

Generating a marketing campaign that gets China’s 600 million online population talking about your brand can have dire consequences – if you get it wrong. Facebook, YouTube and Twitter have all been banned by the authorities and LinkedIn’s new Beta platform, launched in China last month, has had to agree to government restrictions to gain a licence to operate.

Whilst brands may be able to monitor their own content, they don’t have much control over what people say once their message is out there. Many popular brands use well-known Chinese celebrities to promote their products and these Key Opinion Leaders (KOLs) can also get on the wrong side of government restrictions that can often seem as confusing as they are censorial.

Actress Yao ChenActress Yao Chen, the face of Tourism New Zealand in China, became entangled in a political protest when she quoted Solzhenitsyn to her 33 million Sina Weibo followers in support of freedom of the press. The quote: One word of truth shall outweigh the whole world, didn’t sit well with the government censors.
To some, China’s censorship can seem complicated and often random.

“Last year, TV regulators restricted popular genres such as dating, variety and talent shows as part of a crackdown on “overly entertaining” programming. They also banned commercials during dramas, one of the most popular formats in China. No explanation was given for the rules and ad prices soared as supplies decreased overnight.” Anita Chang Beattie, Ad Age (http://adage.com/article/global-news/censorship-china-media-marketers/239187/)

Social Media Revolution China Of more concern to Western brands may be the ever changing list of government censored words and phrases ranging from the “Dalai Lama” and “evolution” to “instant noodles”. It may sound strange to the outside world, but there is reasoning behind these bans, mostly to do with the desire to reduce dissent.
Banning of words can often happen swiftly and without warning but they can also be reinstated just as quickly and mysteriously. In 2012 it was reported that the word Ferrari was banned following the death of a son of an ex-aide to the former Chinese President Hu Jintao. In February this year a similar thing happened with another Ferarri belonging to yet another member of China’s young elite.

Luxury brands, for so long the success story for Western endeavours in China, haven’t been exempt from government bans either. In 2013 there was a blanket ban on advertising for those who promote “incorrect values and help create a bad social ethos”.

WeiboThe Jing Daily quoted at the time: “As such, radio and television stations have been ordered to pull any advertisements that promote extravagant gift-giving — i.e., “waste” — for items such as high-end watches, rare stamps and gold coins.” 

This followed on from a ban of advertising in outdoor spaces that promoted “hedonistic or high-end lifestyles”. Fortunately for luxury brands, this ban did not extend to digital platforms where most of their affluent fans do their shopping.

While brands can often be caught unawares by Chinese censorship, there is still hope that the rise of social media and the increased use of smartphones is going someway to devalue the government’s attempts to control what its people see and say.

In the meantime, brands need to have one eye on current censorship trends if they want to avoid wasting their marketing budget on campaigns that don’t pass an often inscrutable set of censorship rules.