New online marketing strategies in Chinese market and its trends

In the age of technology and Internet, people are given multiple choices for any product to satisfy their needs. This diversity is a great benefit on one hand, as well as a great challenge on the other, for both consumers and suppliers. Consumers often find themselves overloaded with information from the Internet whereas suppliers find themselves struggling to stand out. The consequent online marketing “traffic jam” is tangible, especially in developing markets. A perfect case study for such a phenomena is the Chinese online market, with a huge population (covering about 20% of the whole world market), a strongly growing economy, and great surplus from International trade. Especially with the introduction of Wechat in January 2011 and Weibo in 2009 at the cost of censoring all other social networks such as Facebook, Twitter, What’sApp, Chinese market has been effectively exploiting the domestic consumption under the frame of China’s e-commerce 12th Five-Year Plan [1](2011-2015). Marketing strategies in Chinese market, as a result, have adapted to new consumer behaviors by trending towards “personalized relationship” with customers, e-commerce and mobile-based transactions, and social networking (such as QQ, Weibo, Wechat) with Chinese young generation at the heart of the trends.

In order to make the theme of online marketing strategies in Chinese market more clearly illustrated, the paper will start from the general background of the current situations of online marketing in Chinese market. This part focuses on analyzing the trends of Internet-using habits among Chinese netizens and their influence on popular online marketing strategies. Followed up is a summary of the common online marketing strategies, namely building “personalized relationship” with customers, e-commerce [2] and mobile-based transactions, and social networks as a fashionable lifestyle of Chinese young generation. Next come the four most popular strategies as generalized under the assumed difference in online marketing approaches between small and large businesses. The conclusion will sum up the currently popular and upcoming trends in online marketing strategies in Chinese market.

First of all, it is important to figure out which factors contribute to shape the common trends of online marketing in Chinese market. Here, the old rule applies, where there is demand, there is supply. The answer is since online marketing is based on Internet, online marketing trends undoubtedly result from the trends of Internet using behaviors among Chinese netizens. Reports[3] proved that the most fundamental characteristics include the boom in smart phones and Internet access from mobiles, active use of social media, and online purchase practices.

With China’s economic troubles making headlines this month, how is its digital sector doing? A new report indicates that Internet take-up is slowing in the country as the mature market approaches saturation point, with nearly 90% of the country’s web users coming from mobile devices. [4]

A new report from We Are Social looks at the changing social, mobile and ecommerce trends in the region, indicating that China has more social media users than the USA and Europe combined.

It also shows that an increasing number of the country’s internet users are mobile-only, especially in rural areas.

Key findings include:

  • Internet Users: 668 million, a 6% year-on-year increase
    • Social Media Users: 659 million – more than the USA and Europe combined
    • Unique Mobile Users: 675 million, responsible for 1.3 billion mobile subscriptions
    • Mobile Internet Users: 594 million, accounting for 89% of all China’s internet users
    • Mobile Social Media Users: 574 million, up 15 million since this time last year

Accordingly, how are the online marketing trends adjusted?

First of all, the fact that 90% of Chinese web users come from mobile devices means online marketing strategies have to be more mobile-friendly and mobile-effective. Egigio Zarrella, Clients & Innovation Partner, KPMG China, said: “Mobile take-up is strong in China because the country has skipped out the adoption of the landline. As China’s economy has rapidly expanded over the past few years, consumers have migrated straight from mobile platforms“. Good examples are mobile versions of Taobao and Tmall. Mobile friendliness and effectiveness make shopping portable and inherent to everyday life through mobiles; therefore, realize the purpose of Taobao and Tmall in making shopping online easier than ever. Secondly, 659 million social media users in China (more than USA and Europe combined) means online marketing has to emphasize more on the advantage of the social networks’ information-spreading function. In other words, online marketing strategies have to quickly catch online users’ attention, either with opinion leaders like celebrities or platforms for people to express themselves – like express love in 8 seconds.

Finally, the proportion of Internet users making online payment in China almost tripled that in the USA, the homeland of the technology, has enticed even luxury brands to go online for marketing instead of sticking to the traditional glamorous shops, which used to distinguish brands from small businesses. Thibault Villet CEO & Co-founder, Glamor Sales, is quoted to have said: “Only 5 of the top 60 brands operate their own online sites. They have been late with their online strategy because they have focused on expanding their bricks and mortar network in China. Secondly, they did not anticipate how quickly Chinese consumers would shift to online purchasing. The luxury brands have also tended to want to retain control over their brand sites.”

With all of these influences from Internet users’ habits, the current trends in Chinese online markets lead to a flourish of popular online marketing strategies. The first to name is online marketing through ecommerce system. This strategy usually focuses on convenience of SEO – search engine optimization, online payments, delivery and cheap price (discount season such as Singles Day in China). Businesses all want to have their products included in Taobao or Tmall to ensure the maximized reach to consumers under the “magical” searching function on websites as such.

The next strategy that is gaining the ground is personalizing relationships with customers, which means increasing direct one-on-one contact with consumers via popular media platforms such as Wechat, or online product discussions. It is no longer “one size fits all” story in Chinese market since social networks have integrated in the Chinese netizens a sense of self-expression, demanding more attention from suppliers. Since products become more and more abundant, services play a key role. The widespread use of Internet and Wechat facilitates the task of keeping in touch with consumers before and after purchases. Through Wechat, Chinese consumers enjoy the feeling of receiving personal messages and being personally informed about the products.

Self-identities on social networks also lead to a trend of designing applications, such as short videos applications, or online games to identify yourself with famous figures. These applications make online self-expression of Chinese netizens easier than ever. Big brands usually launch campaigns with applications having glamorous names such as “Dive into love”, “Your thinking DNA” to deliver the core values of their products and attract more attention of the mass.

The final dominant feature is using opinion leaders such as celebrities or popular blog writers to spread information through numbers of likes, shares of reviews on social networks. The study case of Gao Yuan Yuan – a famous Beijing born actress, with her “Scandal Shave” is a perfect example for this strategy and will be analyzed later on.

How are the trends translated into popular online marketing strategies in Chinese market?

In Chinese market, there are many different types of businesses and corporations with different goals and targets for marketing. In the following analysis, however, the emphasis will be placed on analyzing online marketing strategies in Chinese market based on a general division between small and large businesses. Large businesses and corporations in this analysis are defined as those who comparatively have a stable standing in Chinese market and emphasize more on mass marketing. These large businesses and corporations, therefore, are willing to spend money on large-scale marketing campaigns by the use of social leaders or new online applications. On the other hand, small businesses or entrepreneurs are defined as those with comparatively smaller audience, emphasizing on individual or focus marketing groups such as travel agencies, student groups – especially language partners for Chinese learners, food restaurants, and ecommerce businesses as such on Taobao.

The first remarkable notice is Wechat and social connection unique to China (David Moth, 2014). Any foreign student coming to China would first and foremost experience marketing strategy of scanning QR from their Wechat account. Wechat is the core-marketing engine among small businesses such as travel agencies, food restaurants, or language partners’ matches. There are many marketing events with QR scanning such as free food exhibitions or offline Halloween parties. It is common that students can have free meals from different restaurants during food exhibitions just by scanning their QR code to follow the restaurants’ accounts, or taking pictures with their food and sharing on Wechat. This marketing strategy on the one hand let students themselves taste and enjoy the food, gaining new potential customers for the restaurants; on the other hand, spread the information about the products around on Wechat.

As for travel agencies, after scanning the QR code, students are personally informed about upcoming trips with possible discounts. Their after-trips pictures are shared on the Wechat account of the travel agencies and this helps to spread the popularity of the travel agencies among the friends of the past participants. This marketing strategy cannot reach large audience since Wechat specializes in personal texting-style contact. However, the advantage is the ability to keep the loyalty of the customers and maximize Word Of Mouth – WOM effect. Wechat works so similarly to Facebook, but it is still different in important aspects. Wechat has the scanning QR code function, which is an integrating feature for personal identities. Each Wechat user has his or her own Wechat QR or ID. It is not possible to add a person just by randomly searching for names as such on Facebook. Furthermore, Wechat has additional functions such as making orders and reserving places online, which are usually more common on traditional website of food restaurants. Wechat, therefore, can be a combination of social network- Facebook and website effects.

Language partners matching or student organizations also work effectively with Wechat. All students need to do is to scan the QR code of the agencies’ Wechat account. Immediately afterwards will be warm welcoming words and introduction to the available programs and convenient registering process on mobiles. Shortly, students will be informed of their language partners. Any activities will be updated and shared on phones. Wechat is like Facebook, but also more than Facebook as an online marketing strategy in Chinese market.

The next online marketing strategy is via ecommerce agency such as Taobao, Tmall, Damingwang, Jingdong (China 360). Utilizing E-commerce channels maximizes matches between customers’ demands and sellers’ supplies, making them the best environments for entrepreneurs and small businesses. Especially in the rocketing trend of online shopping among Chinese customers, being present on ecommerce agencies is one of the best SEO (Search engine optimization) marketing strategies. As Jack Ma, founder of Alibaba, was recently quoted as saying: “in other countries, ecommerce is a way to shop, in China it is a lifestyle”, the role of ecommerce is evidently strategic in online marketing. China is predicted to overpass the USA to top the ecommerce market in the world by 2020. Mary Chong, Partner, Head of Ecommerce and Payments KPMG China says: “The ecommerce market in China is large enough for other players and niche competitors to thrive. There are four main drivers for ecommerce growth in China: ecommerce and social media platforms, digital payments, and mobile devices”. The boom of ecommerce makes Chinese market more dynamic and entrepreneur-supportive than ever. Online marketing through ecommerce channels focuses on customers’ dynamics to search for the products they want rather than suppliers’ dynamics in caring for customers as through Wechat in previous strategy.

In the second group of larger businesses, it is more common to see the large campaigns online strategies. As mentioned above, large companies, in other words brands, are capable of creating widespread effects and informing mass population about their products. One of the best means for such online marketing strategy, combining the role of celebrities, social networks and mobile popularity, is to create events related to famous people. A perfect example of such case is Scandal Shave by Gao Yuan Yuan.

 

Case study:                                  Gao Yuan Yuan and Scandal Shave

“Gillette came to BBDO China with a major challenge: men were no longer able to see past the inconvenience of wet shaving – the preparation, razor shave, washing and aftercare – driving 18.3 million men every year to switch to more convenient dry shavers. For Gillette, this meant US$647.2 million in lost earnings from 2006-2012.

BBDO’s response was the ‘Shave Sexy’ campaign. Motivated by the insight that women in China find wet shaving arousing to watch, the agency created a social experiment with the launch of two unbranded online videos featuring famous Beijing-born actress Gao Yuan Yuan. In the videos, a half naked Gao acts extremely flirty with her implied boyfriend in what appear to be home videos, shot from the man’s point of view.”

When the first “scandal video” was leaked out on Nov 5, several Weibo (one of the most popular SNS in China) KOLs tweeted it and immediately got tens of thousands of retweets. At the same time, over 20 news sites covered this video and circulated it to more people. It thus transformed into an entertainment event.

On Nov 10, the discussion about this video reached a climax. Weibo KOLs and news sites uncovered that the video was a Gillette TVC and released an official “scandal shave” video at the same time. After that, the discussion about “scandal” and “wet shaving” became even hotter on SNS platforms. People became more willing to believe that using a wet shaver could help them be sexy and attractive.

In order to make best use of this event and to drive Gillette sales, the official Weibo accounts of Gillette and Tmall (China’s most used ecommerce site) announced a half-price promotion in Tmall on Nov 11, which was a peak eCom season in China.

Gillette Weibo account also announced that during Nov 11 – Dec 12, Gillette buyers stood a chance to be nominated and interact with Gao Yuan Yuan in one of the Gillette off-line activities.

To effectively carry out Gillette Fusion’s “wet shave” Campaign, related hard ads like pre-roll TVC and banners were widely used in Gillette’s official webpage, TV, mainstream portals and i-video. All these channels worked together to reach as many people as possible, especially Gillette Fusion’s target audience.

Scandal Shave has been a great success in both social media and e-shop sales.

In just four weeks, ‘Scandal Shave’ reached 237 million people, achieved 450,000 interactions, and earned $14m in free media. In terms of sales, the campaign helped sell three million razors, recording the brand’s highest launch sales month in its history in China. Also, the campaign reversed the monthly sales of dry shaving category by 43%, representing a shortfall of 260,000 units; equivalent to an entire month’s sales of market leaders Philips and Flyco.

The Gillette Fusion campaign generated 1,300 million impressions Campaign-related Sina Weibo and video were forwarded over 370,000 times. The volume ratio of positive to negative comments of this campaign was 379:1.

The search volume of Gillette had a giant increase and Baidu index, which is used to indicate search volume in detail, was 150% of the average level during this campaign.

On-line sales volume shot up by 6.8 times during this campaign versus the same period last year.”

As can be seen from the result of the Scandal Shave, the marketing strategy is a smart combination of social networks, ecommerce platforms (discount on Tmall) and search engine on Baidu. However, the key most important factor to make the campaign such a success is the Scandal with Gao Yuan Yuan and a twist in her scandal, a sudden sexy Gao Yuan Yuan, which contrasted with this celebrity’s traditional innocent image. This case study is to illustrate another important online marketing strategy in Chinese market, using celebrities and opinion leaders to launch storms of discussions on social networks.

A comparative case would be Oppo[5]‘s marketing campaign in Vietnam with a similar strategy of using celebrity. According to the information of official website of Oppo in Vietnam, Oppo started to launch a series of marketing campaigns in summer 2015. Among the strategies is the cooperation with a famous Vietnamese singer – My Tam in her live concert. The campaign benefited from My Tam’s performance. The attendees were asked to record and take pictures of the concert from the dream-like Oppo cameras. These videos and photos were later shared on Facebook and many other social media channels, attracting great market demand in Vietnam for phones with excellent selfies and recording functions. This is a great success for Oppo marketing in Vietnam considering the prejudice towards Chinese products among Vietnamese consumers.

Apart from using fame of celebrities to rocket sales, large companies in China also apply applications closely connected to the products to attract customers’ attention. Designing online application interactively with the desire of self-express among consumers helps the brand names to get popular among consumers, especially youngsters.

CORNETTO – EXPRESS LOVE IN 8 SECONDS – RESULTS

(INCLUDING CONTEXT, EVALUATION, AND MARKET IMPACT)

The campaign was designed to inspire Chinese teens to be brave and express their love on May 20, China’s Love Day.

Cornetto extended the love theme from celebrity-driven online activities into user-generated mobile video creation. Cornetto created 26 Weishi video invitations from the film’s cast which encouraged teens to create their own expression of love. This led to over 70,000 consumer-generated love proclamations being viewed more than nine million times on Cornetto’s Weishi page.

The audience also downloaded additional branded assets, including watermarks, music, and heart designs, to add to their eight-second films and share with their social circles. With over 6.5 million branded assets downloaded, Cornetto extended its reach to millions of teens through earned/shared content.

Mobile extended the reach of the drama series content by generating 70 million of the 220 million video views. The end result of all of this love?

+Sales up 5 percent vs. the same period in 2013

+Unaided awareness increased 10 percent

+Big shifts in key brand attributes:

-“Delicious from first bite to last bite” increased 20 percent

-“Brand that appeals to teenagers” increased 5 percent

-“Brand that helps me express love” increased 10 percent

The mobile-led, cross-media, interactive campaign saw Cornetto maintain its position in China as the leading ice cream brand and expert on young love.

NET EASE – My Brand – My thinking DNA

Private online news provider NetEase pushed China’s strict state controls on the media. By positioning the brand not merely as another reporter of news, but as a champion of people’s views, the ‘Your Thinking DNA’ campaign dared Chinese readers to ‘think more’ and ‘not follow the news blindly’. This helped position NetEase as a much-needed, fresh alternative for online news: by the end of the campaign, NetEase portal’s monthly readership share grew by 10%, largely at the expense of state-owned portals.

Extract from study case on Youtube:

“The objective of the My thinking DNA is to engage young people to choose Netease as My Brand for the the Youth.

The Insight: Young people are passionate to identify and express “who I am” by what they dress, what they listen, and what they eat. And your thinking DNA brings another identification “What I think”, which has never been expressed out before. My thinking DNA is an online testing game where by commenting on the latest news you can identify your thinking DNA and express it by an amazing illustration that is personally generated for you. You can do the test on PC, mobile or even on the ground…You can share the results to Weibo, Weixin (Wechat) and other social platforms. And you can even print it on a T-shirt… more than 50000 people created their thinking DNA in the first week.”

This online strategy focuses on the desire for self-expression of young Chinese on social networks. Again, this strategy is a combination of all marketing channels, Weibo, Wechat, and celebrities. However, the key is delivering the convictions of products’ values through influencing how the young feel themselves integrated in the activities and how their concerns are embraced by the campaigns of the brands.

Obviously, there is no clear-cut among online marketing strategies. Nevertheless, the common trends can be seen to have totally adapted to the Internet using habits of Chinese netizens. In the 21st century, almost everything takes place online. Selling and purchasing is not an exception. The traditional shops on the ground are no longer a “must” to gain display space for products. Modern shops are available online with the filtering functions, which effectively assist customers in pointing out the needed products. Even though the analysis of four online marketing strategies in Chinese market is based on the distinction between small businesses and big brands, the trend is to onlinze and socialize all the products.

A counter argument could be that online marketing and online purchase are not necessary for big brands due to their high status and good quality. According to business leaders and CEOs, luxury brands seem to be slow in catching up with the explosion of ecommerce in Chinese market. As quoted by Nick Debnam, Chairman, Asia Pacific Region, Consumer Markets, KPMG China, “Luxury brands are hesitant to embrace online strategies because so much of the brand is about the experience of going into a traditional bricks and mortar shop, to learn about the brand and its heritage. Consumers don’t get the full consumer experience while shopping online. Therefore it is counter-intuitive for them to invest in an online strategy”. However, since the Internet market in China is driving towards mobile use and social networks with online purchase, brands are as well changing themselves to be on par with their small business competitors. In general, the online marketing strategies in China focus on social media, mobile popularity, and ecommerce.

[1] “In China’s ecommerce 12th five-year plan (2011-2015), the Chinese government’s Ministry of Industry and Information Technology unveiled policies to make China a global e-commerce leader, in line with China’s tradition from an investment-heavy growth model, towards a more consumption-driven model”

[2] ecommerce is electronic commerce, trading products through internet or computer networks.

[3] Business reports from different business groups in China such as KPMG – China 360, McKinsey Global Institute, We are Social

[4] link source: http://www.netimperative.com/2015/09/china-digital-trends-in-2015-huge-shift-to-mobile-as-growth-slows/

[5] Oppo is a Chinese smart phone brand. Oppo emphasizes on the 360° picturing function directly from mobiles as demanded by consumers. Different from Xiaomi, Oppo does not need to sacrifice the price to get more consumers.

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