Rebecca Lui is director of marketing and communications at Ant Financial U.S.A.
By Rebecca Lui
As a powerhouse of the global digital economy, China is an opportunity that United States companies cannot ignore. Consumers there have embraced online retail, creating a market worth $450 billion, and they are now jumping into the sharing economy, too.
Even so, the digital revolution is only just beginning, with a middle class that is set to swell to 650 million by 2020.
Innovative peer-to-peer platforms such as Uber, Airbnb and Coursera, and pure-play ecommerce retailers including Gilt Groupe, Net-a-Porter, Revolve Clothing and Shopbop are already making great strides in China. But many other U.S. companies are struggling.
Why is it so hard to succeed in a market where consumers love online shopping, mobile commerce and foreign brands in equal measure?
The key to unlocking the vast potential of China’s digital economy lies in understanding young Chinese consumers and how to connect with them.
What do Chinese consumers want?
During a recent trip to China, I visited a new luxury outlet mall near Shanghai.
As a consumer, I was delighted to find such a wide assortment of brands from all corners of the world.
I could choose from the best of the U.S., United Kingdom, France, Sweden and Italy, with a sprinkling of up-and-coming brands from China, South Korea and Japan, too.
Joining the crowds in this new mall, it was blindingly clear that Chinese consumers, among the savviest in the world, want high-quality products from around the globe.
As I discovered, many people are willing to travel to luxury malls to get these brands with a local and familiar shopping experience. But very few consumers actually have such access.
China’s retail infrastructure is not well developed outside of the main cities, where traffic jams take much of the fun out of shopping trips in any case.
As a result, China has embraced online shopping faster and more completely than anywhere else in the world.
By 2020, ecommerce is expected to account for 24.2 percent of total Chinese consumption, up from an estimated 9.9 percent in 2014.
Furthermore, much of this activity will take place over smartphones.
By the first quarter of this year, nearly half of China’s total online shopping spend was generated by consumers using mobile devices.
What this means for U.S. brands is that a global vision and local online capabilities can take you a very long way in China.
Leverage social media for different demographics
Today’s young Chinese consumers are highly active on social media for everything from chatting with friends to researching purchases and sharing buying experiences.
By some estimates, there will be more than 500 million social network users by 2017. This makes social media the most important platform for connecting with consumers, but it is a fairly complicated landscape to navigate.
In China, people use different social media platforms to meet different needs, which means there are separate platforms for mass, luxury and mid-tier brands. Companies need to understand who they are targeting and to identify the right channels and craft the right content to reach them.
Popular social media platforms Weibo and WeChat are good starting points for any brand, providing a strong entryway to communicate brand heritage and product information.
Nonetheless, companies looking to make connections with particular consumer groups cannot ignore new platforms such as Zhihu (知乎), which is akin to Quora, Douban (豆瓣), which is similar to Facebook, and Guoke, (果壳), a popular tech news site, or online video sites such as Todou (土豆网) and Youku (优酷), or Xiaohongshu (小紅書), a Pinterest-like site for hot international products.
Different demographics use different social media, and U.S. retailers and brands need to be aware of this to successfully reach their targeted consumer.
When Marvelon launched in China last year it was entering a market where the contraceptive pill is not popular.
Marvelon understood that Chinese women love watching online video and social media chatting, so it created a Korean drama series on Youku to educate women on using birth control pills. The brand sparked a lively discussion about the drama, generating over 5,000 comments on its Youku page.
Communicate at speed and with focus
To be successful on social media means you need to work in real time, at lightning speed, and be on top of the topic of the day or week.
The goal is to get China’s millions of social media users to eagerly share your post with their friends, and then their friends’ friends and so on.
In late May, popular Chinese actors Fan Bing Bing (范冰冰) and Li Chen (李晨) confirmed their romance on social media, posting a photo with the simple title “us” (“#我們”). The post spread like wild fire, with local and global brands, including the likes of Xiaomi and McDonald’s, creating their own “#我們” posts to capitalize on the social media frenzy.
In the case of the “us” meme, responding immediately was the key to appearing fresh and fun. Companies that moved fast were shared widely.
Young Chinese consumers live online and love to share everything from what they ate for lunch to their new fashionable handbag. There is even a special term for it: Shai Dan (晒單) translates to “showing off your order” to online friends. Many brands reward shoppers when they “show off” their orders on social media.
Coursera, which offers free education courses online, is doing a great job of communicating at speed and with focus in China.
Coursera also uses social media to run targeted campaigns for employees and university students across China, to share news about inspiring real-world student projects created in partnership with local companies, and to support graduates to win jobs at top companies.
Coursera’s marketing efforts have proven very popular. It entered China in late 2013 and it is now its second-largest market, after the U.S.
Localize marketing to make it share-worthy
As an overseas brand entering China, it is important to realize that cultural nuances, attitudes and shopping behavior change from city to city. So you will need to change your marketing programs, too.
Again, it is vital to understand the consumer and maintain a connection.
An exciting campaign that people will share via social media has the potential to be very impactful. All campaigns – and indeed your ecommerce infrastructure itself – will need to be optimized for mobile, as this is China’s preferred Internet platform.
One U.S. company that has truly connected with its consumers in China and become part of an ongoing conversation is Uber.
Since launching in China in February 2014, its marketing initiatives have been constantly talked about in social media.
Uber has maintained the element of surprise with special localized promotions, such as Uber boat rides on West Lake in Hangzhou, one of China’s top tourist spots.
For the Qiqiao Festival on Aug. 20, China’s Valentine’s Day, Uber appealed to young women with a promotion that let those who ordered a special Qiqiao car play Cupid for a female friend. When it rained heavily in the summer months, Uber’s China app displayed boats in place of the usual car icons.
Understand your consumer
As Uber, Coursera and others have found, Chinese consumers do not have to be so difficult to win over. They will eagerly share your marketing messages when these are unique and exciting.
These consumers will go the extra mile to find products and services that are authentic and of high quality. They compare prices and availability across markets and channels, and rely on online communities where they can communicate, seek advice on products and create posts about their favorite items.
Also, these consumers do their research before buying a product and use social media and peer forums to help them make their purchasing decisions.
BY UNDERSTANDING these traits and the cultural nuances of different areas of China, your business has an excellent chance of success in the world’s largest and most exciting online consumer market.
Rebecca Lui is director of marketing and communications at Ant Financial U.S.A., San Mateo, CA. Reach her at email@example.com.
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