written by
SevenVentures
SevenVentures
Global Trends
2021-05-07

How does marketing work in China? 3 Learnings from the Far East

How does marketing work in China? 3 Learnings from the Far East

With around 1.4 billion inhabitants and a steadily growing middle class, China offers an attractive growth market to brands. Booming online trade, unique shopping culture and political situation not only provide great opportunities, but also various challenges for companies and their marketing decision-makers. We examine the important differences with the western market and what lessons can be learned for a successful campaign in China.

Every marketing professional knows that the foundation of any successful marketing campaign is a true understanding of your customer base.  When it comes to marketing in China, local knowledge and insights are even more critical. Chinese target groups differ in many ways from those in Europe and the USA and the political differences between China and Western nations ensure that companies are increasingly drawn into political conflicts. Adapting and aligning your product and brand strategy to these unique Chinese circumstances is vital. We take a look at the three most important differences and what this means for European companies looking to launch in China.  

#1 - Culture and censorship

It is a truth generally accepted that all international advertising campaigns have to be adapted to the cultures of their target nations. However, the cultural gap between the West and China is much wider than brands usually experience. Whether it is the unique Chinese sense of humour, the cultural significance of numbers, colours and symbols or the country's own festivals and holidays - all these aspects have to be thoroughly considered and, in the best case, verified by Chinese people themselves. For example, several international fashion brands such as Nike, Timberland, Gucci and Dior have demonstrated how to successfully embrace Chinese culture. As recently as 12 February, they launched their exclusive capsule collections in the run-up to the Chinese New Year in keeping with the theme of the Year of the Ox.  

The same Dior, however, fell foul of Chinese culture and politics a year earlier. At a presentation of the company at a Chinese university, an employee presented the Dior shops "in China" on a map that did not show Taiwan. The Chinese government sees Taiwan, which was democratically ruled and seceded from China in 1949, as a breakaway province that will be reunited with the mainland in the future. After images of this map of Dior went viral on the internet, the company officially apologised and humbly described itself as "a friend of China" so as not to antagonise its Chinese clientele.

An even more complicated situation has developed for many Western companies in recent weeks. China has faced well founded accusations that they force members of the mostly Muslim Uyghur minority to pick cotton in Xinjiang.  Western fashion brands such as H&M, Nike, Adidas, Puma and Hugo Boss had declared last year that they would not use cotton from China's western region. After the European Union, the UNITED States and the United Kingdom imposed sanctions on human rights violations in Xinjiang in March 2021, Chinese propaganda resurrected these statements. Boycott calls ensued and Chinese smartphone maker Huawei kicked Adidas and Nike out of the app store.

These examples all show that while those who venture into the Chinese market can expect substantial sales opportunities, they might also experience difficulties when it comes to political conflicts. A comprehensive risk analysis with the assistance of appropriate experts, for example a Chinese marketing agency, is recommended so that companies can assess these risks effectively and can make the right business decisions as a result.

#2 - Digital marketing and Mobile First

Another defining feature of the Chinese market is the importance of social media and mobile marketing. The reason? China has the largest online community in the world. Of 1.4 billion inhabitants, more than 988 million are now online, almost exclusively via smartphone.

But before companies venture into digital marketing campaigns, they should first consider that the digital landscape in China is very fragmented: users jump from app to app and from ecosystem to ecosystem, making it difficult to track them effectively. While Western audiences mainly use big players such as Facebook, Instagram, Twitter or Snapchat, Chinese audiences have a much wider range of popular social media channels, including WeChat, Sina Weibo, Tencent QQ and the now globally successful TikTok. Chinese customers also use industry- and subject-specific social media platforms such as Mafengwo for travel and Keep for health and fitness. Regional segmentation is also happening, for example, on platforms such as Kuaishou, a short video platform that targets users away from the big cities. But those who fear that they will not be able to reach enough people with one of the many platforms should not forget the sheer size of China. Kuaishou alone, for example, has more than 160 million active daily Chinese users.

Unlike Western countries, Chinese audiences are more positive when it comes to targeted online advertising and often even welcome it as a way to get to know new brands. So it is no wonder that a complex and very successful network for digital marketing has developed in China. Most social media platforms offer opportunities for video advertising which has quickly become one of the most effective advertising opportunities in China. Video advertising can be activated in China via social media platforms as well as on video streaming platforms. Tencent Video recently took the lead in the race for the leading video streaming platform in China, ousting former front-runner Youku-Tudou.

Many platforms, such as Sina Weibo, also offer boosted content posts which are extremely effective because they are appear more organic than, for example, banner advertising. When combined with KOLs – Key Opinion Leaders, as the Chinese influencers call themselves – these sponsored posts can achieve excellent reach and a high conversion rate.

#3 - Chinese purchasing behaviour

Digital marketing measures also benefit from the distinct Chinese culture of online shopping. No day illustrates this more clearly than "Singles Day," an unofficial Chinese holiday for people who aren't in a relationship. For the past five years, Alibaba, the largest ecommerce provider in China, has generated more than twice as much revenue on Singles Day as all US retailers on Thanksgiving weekend (Thanksgiving, Black Friday and Cyber Monday) together.

For all the Chinese digital consumerism and the popular cliché of cheap "made in China" products, it's perhaps surprising to hear that price is by no means always the deciding factor for Chinese buyers. Rather, their purchasing decisions are more nuanced. They not only enjoy the shopping experience but actively seek out information about their brands from sources such as product reviews and forum discussions. Chinese customers can seem demanding because they need a lot of information about brands and their range of products or services. This is because many of them will have had negative experiences with counterfeit goods so authenticity and quality are vital. This is also one of the reasons why Western luxury brands continue to see such success in the Chinese market.

Companies would be advised to offer Chinese customers a wide range of opportunities to find out more about their brand or product. A popular format that meets this need is live shopping. Here popular KOLs who play a major role in building brand trust and provide the Chinese audience with information about brands present and explain the company's products via live streaming and enter into an interactive dialogue with the audience through the platform’s comment function.

Summary

China is a complex and rapidly growing market with political hurdles, constant innovation and digital trends. In order not to lose track of this, companies should hire either Chinese employees who understand the market or consult a Chinese marketing agency. In addition, a fast and agile marketing approach is essential. While marketing campaigns in the West are often planned months or years in advance, China is about creating seamless content across multiple platforms which is relevant right now. The Chinese audience loves entertaining, quirky, creative and, above all, divisible content. If brands act wisely and confidently when it comes to political risks, react quickly to current social media trends and surprise with original content, there is every chance of success in the Chinese market.

share: