Designing a marketing strategy for your China Business in 2020

With a population of about 1.4 billion people, China represents a

significant potential market for foreign companies. But its

attractiveness comes attached to a series of cultural and

structural challenges that require knowledge and a strategic approach

to be navigated successfully. No matter the size of the company,

from a multinational to a small first-timer, the lack of local cultural

understanding can prove catastrophic.

One of the most important things that foreign companies need to realize is that China is not a homogeneous country, and that it is extremely socially and economically fragmented. Uneven rates of economic growth in different parts of the country over recent years have increased many of the economic and social discrepancies that already existed between regions.  

Giving these characteristics, designing a marketing strategy in China may seem difficult and complicated. Another challenge is that popular Western media marketing platforms, such as Facebook or YouTube, cannot be accessed in China. Also, the influencer marketing community in China is organized differently, with niche segments and norms.

Several factors have made China a popular region for foreign businesses. To start, it has a large number of high net worth individuals (HNWI) – between 2016 and 2019, the number of Chinese adults in this bracket increased by 80.8 million. And with approximately 1.2 billion subscribers, China has the largest mobile audience globally, ideal for mobile marketing strategies.

According to a report published by McKinsey about digital consumer trends in China, in 2019 online retail sales in China reached $1.5 trillion, making it the largest in the world ($660 billion in the US) and a heaven for global marketers.

Most marketers have focused their attention on capturing consumers in high-tier cities. But more than 50 percent of digital consumers live in lower tier cities, according to McKinsey’s report, which surveyed over 4,300 digital consumers from across four city tiers and rural areas in China, and from a range of ages and income levels.

Social media and content consumption account for two-thirds of the total time spent online, making it critical for brands to have a social marketing strategy in China. The recent COVID-19 health crisis that forced millions of people to stay at home, increased this time even more, turning online channels into vital lifelines.

The McKinsey report found that 95% of people who live in large Chinese cities have an account with at least one social media site and are far more active than in other countries, with 91% of them saying they had visited a social media site in the past six months. It also proved that social media has a larger impact on the buying decisions of Chinese consumers than on those of any other country.

If a Chinese consumer sees a product being discussed positively on a social media site, especially by a friend or acquaintance, they are far more likely to purchase the product than his or her counterpart in other countries. Peer recommendations have a strong influence in Chinese culture, as formal institutions are less likely to be trusted.

Unlike other regions, the Chinese consumer is truly omnichannel, and the lines between digital and offline are increasingly blurred. In 2020, companies will need a robust, well-articulated digital marketing strategy to succeed in the Chinese market.

The two largest social networking platforms in China are Weibo and WeChat. They both exert significant influence in Chinese society and play an indispensable role in modern life.

WeChat is the most powerful application in China, and it includes personal messaging, social media, online payment and online shopping, all in one place. WeChat’s goal is to integrate itself into every aspect of a customer’s daily life. Members don’t need to leave the app to do anything they need.

Weibo is a more open social media platform where users come to socialize with friends and new people, and to entertain themselves with funny, viral videos as well as discover trendy topics or current social information. Celebrities, famous bloggers, media outfits, and government departments, they all create and share contents on Weibo, making it an exciting social hub to hang out.

Companies can generate awareness through content marketing, no matter what platform they decide to use. The most important thing is to create high quality content that users can post on their feeds. Unique, informative and interesting content will engage followers and attract new ones.

After registering an account on both WeChat and Weibo, brands can post content or push feeds to their subscribers. Weibo is an open platform where even non-followers can view Weibo posts and the posting default setting is public. In addition, everyone can also see the reposts, comments or likes.

Unlike Weibo, WeChat is a closer community and its users can only see posts pushed by official accounts to which they subscribe. Followers on WeChat are more condense and targeted. Because users tend to be more careful about what they post, contents on WeChat may not reach a massive audience but can create powerful word of mouth effect.

In terms of content type, on Weibo, businesses can take advantage of the app’s media-rich nature and create multimedia content including videos, pictures, live streaming, and adding emojis in their posts.

Another important component of a strong marketing strategy in China is the use of a dedicated platform for influencer marketing, which in this country is very different from the standard approaches in other market regions. China has a highly organized influencer community, with specialized influencer agencies, consultancy groups, and incubators to hone social media talent.

There are various levels of influencers, like key opinion leaders (KOLs) who are recognized for the validity of their opinions, in a specific domain. There are Wanghongs or influencers who gain popularity for their online appearance. This is in addition to traditional celebrities who also have a large social media following and influence.

In 2020, marketers can use a dedicated platform like Parklu or Robin8 to navigate the influencer community and find the best online advocates for their brands and marketing needs.

Live-stream short videos should also become an integral part of your social marketing strategy in China.

Popular apps for video consumption include Douyin (or Tik Tok), Kuaishou, and Haokan. While there are other social media platforms for long-form video consumption like Youku and iQiyi, short-form is the trend to follow in 2020. You can work with KOLs, Wanghongs, and other types of influencers to create short videos of your product. These can be live-streamed through social media at regular intervals to garner a loyal audience.

A solid presence on WeChat and Weibo is a must. However, it is increasingly competitive to get your brands noticed by customers in the noise of millions of posts, tweets and campaigns happening every second on those sites.

Meanwhile, there are more specialized platforms which serve unique niches. These smaller, passion-based networks allow brands to connect with conversations that really matter and drive authentic traffic to your business.

These is some niche social media growing in popularity: Xueqiu (Snowball), ideal platform for brands in the financial or real estate industries; Keep is a platform dedicated to health and fitness niche; Mafengwo is for increasingly sophisticated Chinese travelers to help them plan their trips, and Xiao Hong Shu (Little Red Book), dedicated to females’ world of fashion and cosmetics.

When it comes to B2B marketing in China, it is necessary to follow several foundational steps, such as hosting B2B websites on a Chinese server and optimizing website content as per Baidu’s SEO norms. The content should also be available in Chinese so that it can be accurately indexed. B2B marketers also need a special license called the ICP Beian License to host their websites in China; this also entails a local offline entity.

To streamline B2B marketing in China, it is recommended to use WeChat for customer communication rather than website updates or emailers. Email marketing in China isn’t a good area for B2B brands as the number of email users in China is surprisingly low.

A 2019 survey of 240 marketers in China revealed that 79% of professionals were looking to increase their digital marketing spends. Companies interested in strengthening their presence in the Chinese market in 2020, should develop a strong marketing strategy that includes a careful blend of digital marketing and offline activity.  

Should you have questions about your China marketing strategy, complete the below inquiry form with your questions and comments. 

DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.

MAKE AN INQUIRY

© 2020 Woodburn Accountants & Advisors. All Rights Reserved. Privacy Policy