Digital Marketing in China

Digital Marketing in China:
What you need to know
www.greenlightdigital.com
Many estimates have China’s
economy becoming the world’s
largest by the end of the year. It
will mark the end of one era and
the beginning of another. In the
50s and 60s the world economy
was transformed by the emergence of the American consumer.
The next ‘consumption power’ is
inevitably now China.
China is currently the second
largest economy in the world by a
huge margin if measured by GDP,
and poised to be the largest as
early as this year. This increase in
wealth has resulted in now $3.3
trillion in private consumption,
8% of the world’s total (compared
to 14.9% of the world’s GDP), and
a percentage that can only rise
and will likely rise rapidly.
Half the world’s new shopping
malls are being built in China ,
General Motors sells more cars in
China than it does in the US, and
Transformers: Age of Extinction
has made more money in China
than anywhere else in the world
($231m versus $189m in the US).
This emergence, this spectacular awakening of a giant, is also
playing out digitally too. Every
1.6 seconds a new Internet user
is added to the Chinese Internet
population – which now stands at
618 million users (a 42.1% penetration rate). They are spending
more and more time online – from
18.7 hours per week to 20.5
hours in the last 12 months alone.
China’s e-commerce transactions have hit $713.27 billion – up
24.3% compared to last year.
Wow is not the word.
Much of this growth is coming
from China’s expanding middle
class which consists of around
300 million people. According to
McKinsey, by 2015, a third of all
global spending on high-end bags,
shoes, watches, jewellery and
ready-to-wear clothing will come
from ethnically Chinese people,
within and outside of Mainland
China. Unlike the Japanese, who
prefer their own home-grown
brands to foreign ones, the
Chinese middle class perceive
Western brands as having the
highest levels of reliability and
authenticity, and so a great
proportion of that spend will head
West. The Western economic
deficits against a Chinese surplus
will begin to shrink and the
intrinsically better, lean toward
brand loyalty, see brands as
reflections of status and identity,
and show an attraction to new,
shiny things. G2 are ultimately
not dissimilar in motivation and
psychology to our own digital
generations.
That said, there are fundamental
differences – Political, Economic,
Social, and Technological – that
make digital consumers in China
and those in the West markedly
different. How they engage with
brands and advertising is not the
same. The tools, channels and
networks they spend time on are
different too, as well as how they
“BY 2015, A THIRD OF ALL GLOBAL SPENDING ON HIGH-END
BAGS, SHOES, WATCHES, JEWELLERY AND READY-TO-WEAR
CLOTHING WILL COME FROM ETHNICALLY CHINESE PEOPLE,
WITHIN AND OUTSIDE OF MAINLAND CHINA”
world’s biggest factory, as it has
been often labelled, will rapidly
become the world’s biggest
consumer of other countries’
products.
Many of the constituents of this
new middle class in China are
currently teenagers or in their
early twenties and have been
labelled Generation 2 (G2). The
average age of an Internet user
in China is just 25, compared to
over 40 in the US. This group is
three times more numerous than
the baby boomer generation of
the US that have defined global
consumerism in the last 50 years.
They are a confident group and
independently-minded group that
displays strong consumerist traits;
regard for expensive products as
engage within them. As selling
to China’s middle class is on
the agenda for most ambitious
Western brands, it’s important
that these differences be acknowledged and understood – it’s not
like expanding to other parts of
Europe or Latin America. The
game may be the same, but it’s
played with very different rules.
These differences, from a digital
marketer’s perspective, exist
everywhere; WEBSITE DESIGN
& DEVELOPMENT, SEARCH,
DISPLAY, SOCIAL MEDIA,
MOBILE, MARKETPLACES, and
ANALYTICS. What follows is an
overview of those areas and the
basics that you need to know.
Galeries Lafayette in Paris, France
DON’T FORGET TOURISTS
FROM CHINA
It is important to remember the
consumer force that is the Chinese
tourist, as it isn’t just about marketing
and selling directly in China itself.
Chinese tourists are expected to make more
than 100 million outbound trips in 2020. This
group is already the highest spending tourists in
the world, outpacing the Germans for the first
time in 2012. 60% of Chinese luxury purchases
are in fact made overseas. Big US and European
brands are reporting that around 30% of their
home-grown sales are made to that group.
What this means is that marketing in China,
including digital marketing, will fuel demand for
your brand in New Bond Street and Fifth Avenue
too. It isn’t just a matter of treating China like a
new market to enter - that market has already
come to us, but most Western companies are
failing to invest adequately in building their
brand awareness in China unless they have a
heavy physical presence there. That is a very
short-sighted position to take.
Digital can also learn a thing or two from
offline practices, and mainly from French luxury
brands. For example, stores in Galeries Lafayette in Paris have been hiring Chinese sales
assistants to more effectively sell to Chinese
tourists, who now represent 80% of buyers of
luxury watches in the store.
It doesn’t stop there – Paris police have drafted
in reinforcements from China this year (2014)
to be better prepared for the summer boom in
Chinese tourists. They will be stationed at key
landmarks to protect Chinese tourists from
pickpockets and muggers.
This poses an important question – what are
we doing in the digital realm to target Chinese
consumers regardless of their physical location and in a way that reflects their needs and
wants? We’d say there’s work to be done.
What you need to know about
Website Design &
Development
网站设计和开发
Your current ‘international’
website, with its French, German
and Italian flags in the top right
corner, allowing you to change
your country of origin in a simple
click and spawning a broadly
identical version of your site but
in another language, is woefully
unsuitable if you’re looking to put
your brand and products in front
of a Chinese audience, and for
four main reasons:
•
•
•
•
Form and function
Language
The Golden Shield Project
Payment and delivery
a.
FORM AND FUNCTION
Chinese websites have some
distinct design differences when
compared to those in the West:
• C
hinese Internet users prefer
personal contact more than we
do, which results in a greater
prevalence of chat boxes and
associated functionality on
sites. They expect to be able
to talk to a person by chat or
phone very quickly.
• C
hinese Internet users
share experiences and make
comments far more frequently
than we do, and this is reflected
in a greater number of and more
utilised comment areas.
• T
hey’re a more expressive
society which is reflected in
more icons and animations in
their sites.
• T
hey utilise Flash far more than
we do, mostly for display ads
but also due to the limited font
choices they have (you need to
design 4,000 individual characters to create a new font).
• M
inimum font size is 12px as
smaller fonts create legibility problems because of the
complexity in characters – this
effects template structures and
page layouts.
do in some parts of China) and
people would click on links so
that pages load in the background whilst they are still
reading the page they are on.
• C
hinese sites do not use Facebook ‘like’ buttons or Tweet
buttons like we do as those sites
and various others are blocked
by the national firewall (more
about that later).
• Q
R Codes are alive and well in
China, with 9 million QR codes
being scanned each month,
which is more than 4 times
greater than a year previously.
The greatest usage is in ticketing and check-in (42%) for
promotions, like billboard ads
• T
hey utilise a greater number
of distinct content blocks to
frame distinct content, mainly
due to the blockish nature of the
Chinese typeface being aided
by more complex template
structures.
• T
hey use more links on a
page and the links open in
new windows, this is because
users have traditionally had
slower connections (and still
QR code outside the UK Embassy in
Beijing – scanning allows you to follow
the Embassy’s Weibo account.
(33%) and informational, such
as business cards (23%).
Due to some of the above points,
Chinese sites often look very
busy and there are thousands
of comments by Chinese users
throughout the Web complaining about this. Westerners have
always assumed that this is a
Chinese preference but there is
little evidence that busier sites
are actually preferred by Chinese
users, even though designers are
still creating them. Do not assume
that this is a cultural preference.
Much of the problem is due to
Chinese web designers having
yet to evolve their designs and
methods along with the freedoms and options that come with
greater Internet speed and search
tools that work (more about that
later). Some of this may also be
the result of site owners wanting
to maintain ‘face’ by making it
look like they are busy and doing
well by adding lots of content on
their sites.
China’s leading website about cars.
Note the length of the web page in
comparison to Western sites in the
same sector.
Therefore, it’s unwise to just take
your existing site and simply
translate the content to create a
Chinese-language version within
your existing templates. If you do
that, you risk having a website
that is not as legible as it needs
to be, that does not include the
sharing and commenting tools
necessary for a Chinese site to be
Chinese, and fails to reflect on the
advertising mechanisms available
in that market. You need to design
a Chinese website for a Chinese
audience, which includes making
the effort to not just copy other
Chinese websites as many of
them are not in fact what Chinese
people want.
b.
LANGUAGE
In the West, we create French
sites in French for French people,
German sites in German for
Germans, and so on. We have
some curveballs like Belgium
and Canadian Quebec with their
multi-language requirements, but
in general it’s pretty simple. There
are some further dimensions to
consider in China which make that
market a little more complicated:
Chinese Internet users need a
keyboard input solution that
enables them to input at least
4,000 distinct logograms (called
Hanzi) which represent the
characters used to compose the
words in their language. Pinyin is
the expression of these Chinese
characters using a roman alphabet, which makes it essentially a
shallow version of Chinese that
incorporates pronunciation, but
not tone or meaning. So 汽车 is
Chinese for ‘cars’ and phonetically this would be ‘qiche’. Qiche
is therefore the pinyin for 汽
车. Qiche is easier to input via a
keyboard than 汽车, hence why
pinyin is the input type of choice
in Chinese sites, not Hanzi. Function defeats beauty in this case.
Input-Method Editors (IME) allow
the user to type in pinyin, and
then present to the user the most
likely intended words of their
pinyin for them to choose from.
Sogou (the second most popular
search engine in China) has the
most popular IME, which is called
Sogou Pinyin. Microsoft in Asia is
considered a very advanced Pinyin
IME provider too, particularly with
their new Engkoo Pinyin IME (Bing
IME).
Above is the cars/qiche example –
you will see that when the phrase
is typed, the pinyin and Bing
understand this and offers the
Hanzi 汽车 to confirm that this is
what was wanted.
Pinyin will typically be used when
people are using search functionality on your site, so you need to
ensure that your search functionality is designed specifically for
your Chinese audience. Simply
using the same search mechanism
that you are using in a Western
market will not work because that
translation from pinyin to Hanzi is
a uniquely Chinese challenge and
needs unique providers, tools, and
scripting.
In addition, unless you are only
interested in Mainland China, it is
a good idea to provide the option
for traditional Chinese characters
in addition to simplified characters. Traditional Chinese charac-
ters typically have more strokes
than Simplified Chinese and so
are more complex. Hong Kong,
Taiwan, and Malaysian Chinese
all prefer traditional characters,
and although their populations
are small compared to Mainland China, they still represent a
larger population than Australia
and have significant purchasing
power; GDP per head in Mainland
China is $9.844 whilst in Hong
Kong it is $52,722.
c.
THE GOLDEN SHIELD
PROJECT
China’s national firewall (“The
Golden Shield Project”) blocks
Chinese nationals from viewing
domestic and foreign sites based
on a list of words or phrases that
the authorities deem objectionable. The list is not publicly
available and the list changes all
the time. Most words/phrases
that regularly cause a site to
be blocked are pornography or
gambling-related or terms that
refer to controversial political
subjects or events. These are
easily identifiable and avoided if
you have even a cursory understanding of China’s culture,
beliefs, laws and regulations.
There are other words, however,
that are not so obviously identifiable. For example, the inclusion
of the words ‘red Ferrari’ in your
site content would (and still may)
have your site blocked. Ferrari,
and specifically ‘red ferarri’ was
specifically targeted due to Ling
Gu, son of Ling Jihua, a close
associate of President Hu Jin
Tao, and Bo Guagua, son of Bo
Xilai, driving black or red Ferraris,
respectively.
In addition, certain types of sites
are banned and blocked too, for
example, sites that sell online
drugs or satellite equipment.
You can track these blocked
terms on a number of sites, such
as en.greatfire.org, so there’s no
reason to run blind. It would be
easy to identify why a site has
been blocked, and get back up and
running almost immediately, as
the firewall works in real-time on
page request.
It does get a little more complicated though as there are
instances when you could be
blocked and it not be related to
specific words or phrases, for
example:
• T
here are lots of sites that we
use every day in the West that
are blocked by default in China,
e.g. Facebook and Youtube, so
even having widgets for those
things on your pages (like a
Facebook ‘like’ button) has
been known to get you blocked.
This is again why building a
new site is ideal because if you
were building a site for China it
wouldn’t have a Facebook share
button anyway, you’d have
buttons for Sina Weibo and
WeChat. Many other plugins
can have you blocked too so
you have to approach templates
“super clean”. Avoid any
plugins/widgets from sites like
Google, Youtube, Blogspot, and
most Japanese social networks.
• A
void shared hosting servers –
if one site gets blocked because
it has ‘red Ferrari’ in its content,
then the whole C block can very
easily get blocked and take you
down with it.
• B
logging functionality has been
known to cause issue – it would
be best practice to use Chinese
variants and not ones we typically use in the West. Wordpress seems to get blocked with
regularity but this may be more
to do with people on shared IP’s
poisoning the well.
So, you basically need to err on
the side of caution with what
your content contains that might
trigger the firewall to block you
and what third party widgets
and plugins you include on your
pages. Formulating some editorial
guidelines for your team would be
sensible too, as well as having a
documented procedure for having
a block removed within a few
hours if you were to fall foul. Various online services, such as www.
greatfirewallofchina.org allow you
to check whether you have been
blocked and will check automatically from multiple Chinese cities
to ensure that what looks like a
block is simply a timeout
IPS
China PNR
or other issue.
d.
PAYMENT OPTIONS
The payment options you make
available on your site to consumers in China must reflect the
preferences on the ground there.
Consumers in China are reluctant
to use their debit or credit cards
online, so intermediary payment
solutions are critical to the
Chinese Internet economy. Therefore, AliPay, TenPay and similar
need to be standard options.
AliPay is the most popular and
most important, with 550 million
users and around 8.5 million
transactions each day. It’s to
Taobao (owned by Alibaba) what
Paypal is to eBay. AliPay has
agreements with MasterCard
and Visa so supports most major
global currencies. AliPay charges
about $1000 for cross-border
setup and also takes
between 3% and
Others
7% on each.
99Bill
Yeepay
Alipay
Unionpay
Tenpay
The top online & mobile payment providers in China.
e.
LICENCES
Whilst you can operate a site
outside China that sells to people
in China without holding any
government-issued licenses, there
are limitations to this approach
including issues around cross-border payments and Internet speed,
and also no guarantee that your
site will actually be visible within
China or that you’ll achieve high
search engine rankings.
To have a site hosted in China
you will need an Internet Content
Provider (ICP) license or your site
will be blocked. The ICP is issued
by the Chinese Ministry of Industry and Information Technology to
permit China-based websites to
operate in China. The ICP license
numbers for Chinese websites is
often found on the bottom of a
site’s homepage.
Google, unable to acquire an ICP
license on their own, often partner
with Chinese Internet companies
to use their licenses. Sites hosted
outside of the Chinese Mainland
do not require a licence – this
includes Hong Kong.
Operating from China is a prerequisite for acquiring a license.
Foreign companies such as
ICP application requirements
also include a minimum registered capital of 1 million RMB
Tesco’s ICP license number in the site footer
($160,000), no records of unlawful acts in the last 3 years, and
having established premises.
There are over a dozen other
licenses that you may also need.
For example, forums and bulletin
boards require different licenses,
as do medical related sites.
SITES INACCESSIBLE IN MAINLAND CHINA
Some sites currently blocked by the Great Firewall and inaccessible from within Mainland China at the time of writing:
What you need to know about
search
engines
搜索引擎
The first fundamental difference
when it comes to search marketing in China versus the West is
that Baidu is the clear market
leader, Qihoo’s 360 and Sogou are
strong challengers and Google,
Yahoo and Bing are virtually
non-existent. Google’s market
share is merely 2.88%.
Qihoo’s 360 has seen a meteoric rise, from 0% in mid-2012
to over 18% today. The reason
behind this is that 360 originally
operated a popular antivirus
software and then created a web
browser with Google as its default
search engine provider. Qihoo
then replaced Google with their
own search engine and grabbed
that market share overnight for
themselves.
Other
Google
Soso
Baidu
Sogou
360
The most popular search engines
in China.
Sogou, which means “search dog”,
also has its own browser and as
previously mentioned, also operates a very popular Pinyin IME.
The second big difference is that
the psychology of Chinese search
engine users is very different from
our own. In the West, there are
many studies which suggest that
searchers trust organic search
listings as much if not more than
paid listings. Further studies
suggest that most Western search
engine users draw practically no
distinction between organic and
paid search listings – they simply
click on whatever they believe
matches their search query and
Baidu.com’s search results page for ‘cars’.
Note the greater number of content containers on this search results page versus Google or Bing’s in the West.
might help them get what they
want. In China this is not the case
– their view of paid listings is far
more positive.
a.
PAID SEARCH
Chinese search engine users
have a significant distrust of
organic search results as they
are bombarded by scams, spam
and search results that could
be far more relevant. Some
reports suggest that up to a third
of China’s netizens have been
scammed online, although not
necessarily of course via a search
engine.
Conversely, there is significant
consumer trust in paid search
listings – for two main reasons;
firstly, paid search advertisers
on Baidu have to be approved by
Baidu as legitimate before they
can place advertising, which adds
a layer of trust for consumers.
Secondly, Baidu commits to full
refunds for users suffering a loss
if a paid advertiser cheats them
or lets them down (the Baidu
Netizens Interests Protection
Plan). All the user has to do is
be logged in to qualify for the
protection (which is a nice data
capture too!). This is all reflected
in Baidu click-through rates that
are incredibly impressive and the
significant consumer volume that
this invariably delivers as a result.
acting more like modified broad
match, with not broad match
modifier option, but the underlying mechanisms are broadly the
same.
It’s also worth noting that Baidu
is not just a Google copycat,
even though many of its updates
arguably follow Google’s lead,
as it also has its own websites
and redirects 27% of its traffic
“CHINESE SEARCH ENGINE USERS HAVE A SIGNIFICANT
DISTRUST OF ORGANIC SEARCH RESULTS AS THEY ARE
BOMBARDED BY SCAMS AND SPAM”
So paid search in China is incredibly important, as it is everywhere
of course, but more so in China.
And for the most part the mechanisms we are already familiar
with through Google Adwords
are also present with Baidu, such
as dynamic search ads, quality
score and things like that. There
are differences due to language
of course, such as phrase match
to these websites: Baidu Zhidao
(Q&A), Baidu Baike (Wikipedia),
Baidu Tieba (forum). To promote
your website in China, you have
to also have a presence on these
websites and paid search can
funnel lots of traffic to them,
which has an impact on how you
measure your paid search effectiveness and attribution models.
WHAT IS PHOENIX
NEST?
Phoenix Nest is an upgraded
marketing platform which Baidu
launched in April 2009. Through
an enhanced algorithm that
generates more relevant paid
links and provides customers with
additional tools and information
to help them better manage their
spending and achieve higher
ROI, Phoenix Nest is designed to
improve relevance in paid search
and increase value for customers.
b.
ORGANIC SEARCH & SEO
From an organic search and SEO
perspective, Baidu rests on the
same fundamental model of
operation as Google and Bing;
they have spiders crawling the
web, they use content and linkbased algorithms to sort their
listings, and they index multiple
media types. Where they diverge
however, is in their maturity as
Google and Bing are technologically a fair distance ahead.
For example, by limitation or
by design, Baidu’s spiders have
a shallower indexing threshold
compared to Google and Bing,
not crawling deeper than three
levels within a website structure. Conversely, and somewhat
ironically, search engine users in
China will routinely look beyond
the first page of search results,
whereas users in the West do so
very rarely.
Baidu has to also deal with
people’s distrust of organic
listings in general, and whilst
commercially it makes more
money if people continue to click
on just the paid ads, it needs to
ensure that it stands up to competition and future-proofs its total
product.
And Baidu is indeed doing that,
with five of its seven algorithmic
updates in 2013 focussing directly
on making its organic results
cleaner by rewarding high quality
content and identifying spam:
• S
cindapsus Aureus 1.0 – antilink spam (two billion cheating
pages influenced)
“CHINESE LANGUAGE SITES PERFORM MUCH WORSE IN
BAIDU IF THEY ARE NOT HOSTED IN CHINA OR ARE
OPERATING WITHOUT AN ICP LICENCE, TO THE POINT WHERE
YOU MAY NOT EVEN RANK FOR YOUR OWN BRAND NAME”
• S
cindapsus Aureus 2.0 –
anti-advertorial
• P
omegranate 1.0 – antispam
• P
omegranate 2.0 – update for
high quality sites
• O
riginal – encouraging original
content
My SEO readers will not have
missed that these updates are
similar in objective to Google’s
Penguin and Panda updates over
the last few years.
It’s also worth noting that Chinese
language sites perform much
worse in Baidu if they are not
hosted in China or are operating
without an ICP licence, to the
point where you may not even
rank for your own brand name. It
isn’t as simple as adding relevant
tags or configuring Webmaster
Tools as we do with Google. You
need to be hosted in China or
deliver your site via a Chinese
CDN to get around this, but
having an ICP is the only sure-fire
way of being treated equitably
with other Chinese sites.
PC CLIENT SOFTWARE
• B
rowser
• I nput Method Editor
SERVICES
• T
oolbar and Baidu Companion
• M
edia Player
• R
eader
The highlights
MOBILE PRODUCTS/
SERVICES
SEARCH PRODUCTS
• W
eb Search
• I mage Search
• V
ideo Search
• News
• Web Directory
• B
aidu Tuiguang
Advertising platform similar to
Google Adwords
SOCIAL PRODUCTS
of over six million articles,
China’s largest by users, second
in terms of article volume
• Wenku
Portal for users to share files
and books for free)
• Experience
A community focused on ‘how
to do’ UGC content
• B
aidu Space
Allows users to create their own
web pages and build their own
communities
• P
ost Bar
Query-based searchable
community
LOCATION-BASED
SERVICES
• S
pace
• M
aps
• A
lbum
• G
roup Buy Directory
UGC-BASED KNOWLEDGE
PRODUCTS
• K
nows
Q&A platform
• B
aidu Baike
Baidu Encyclopedia composed
• M
obile search
• M
obile browser
• Palm
Application layer for mobiles
that replaces existing services
with Baidu’s
• M
obile Phone Input Method
• Baidu Yi
Baidu’s mobile OS, built on
Android
• B
aidu Around You
Searching and sharing platform
focussed on what is around you
in food, shopping, recreation,
hotels, fitness, beauty, and
travelling
OTHER
• T
ravel
• Qunar
Travel website co-funded by
Tenaya Capital (Kayak, Zappos)
MUSIC PRODUCTS
• B
aidu Cloud
2TB of free data storage
• B
aidu Music
Linking to sources of digital
music files online
• B
aidu FM
Online music radio station
• B
aidu Tongji
Analytics platform
What you need to know about
Display
advertising
显示广告
Chinese websites typically
include far more display ads than
the average Western website.
Marketers buy these display ad
spots directly from the major
publishers such as Tencent, Baidu,
and Qihoo 360, as well as via
other ad networks and exchanges.
themselves or release it into
self-controlled private exchanges.
Alibaba, Baidu and Tencent,
for instance, all have their own
exchanges and have DSPs on top
of them. These are essentially
Programmatic Premium Buying
(PPB) platforms.
The display ecosystem in China
is very different from ours, largely
because there are a greater
number of massive publishers that
have huge amounts of aggregate
traffic across their multitude of
sites. The top two publishers earn
52.4% of all online advertising
revenue. The top 15 earn 82.7%
of it. In the West, we are accustomed to think of the commercial
power being demand-side, i.e.
with brands and agencies, but
in China the power is very much
in the supply-side. This gives
publishers huge power in China
and it effects how display is
bought and sold in very important
ways.
This goes some way to explain
why RTB spending in China in
2011 was zero, and even now
accounts for not much more than
the spend levels of France, which
is tiny relative to the population
levels. This will obviously grow
but will lag behind the UK’s spend
levels for at least a few more
years.
For example, many of these
publishers, such as Sina and
Tencent, offload their unsold,
poor quality, left-over inventory
to exchanges, and sell their best
inventory directly to advertisers
The other issue this creates is
that this all has a detrimental
effect on transparency, as with the
publishers all creating their own
exchanges and DSPs, it hinders
the evolution of useful external
data management systems. Integration in China is more vertical,
as opposed to horizontal and,
again, this plays to the publishers benefit, not the advertisers.
Notwithstanding the above, all
estimates have DSPs and RTB
growing rapidly in the coming
years, with a number of local
Chinese operators pushing the
trend, such as iPinYou and Yoyi
Media, as well as the global
players like Turn and Invite Media.
Time will tell how it balances out
but for the time being China’s
display market will be a combination of direct buys, PPB and third
party DSPs.
Chinese display banner for Transformers.
What you need to know about
social
media
社交媒体
Social media is an absolutely
pivotal channel for marketers in
China, arguably more so than
in the West - and that is saying
something. This is because
Chinese consumers research their
purchases far more than their
Western counterparts do due
to an inherent distrust of official
reviews and ratings, and are more
inclined to trust what a quantity
of consumers are saying around
a topic instead. Much of this is
due to China being a collectivist
society where sharing and participation are very important. This
extends to reviews, comments on
blogs, videos, and microblogging,
all of which the Chinese do more
fervently than we do.
SO, WHERE ARE THESE
CONVERSATIONS
HAPPENING?
Several years ago the Western
press had us believe that social
media in China was monopolised
by RenRen, which was routinely
called “China’s Facebook”. A few
years later and many Western
marketers still think this is the
case, but social media in China
has come a very long way and
very quickly, with RenRen having
seen decline and lots of networks
reaching a scale that make them
as important if not more so than
RenRen.
It’s also important to understand that Chinese businesses
aren’t copying Facebook et al,
but building their own networks
that reflect what their audience
wants, with their own innovations,
focus and strategies. Different
social networks also have very
different levels of penetration
in different parts of China, for
example Kaixin001 has much
greater penetration in ‘tier 1 cities’
than say 51.com, which has higher
penetration in ‘lower tier cities’.
This means that you cannot
assume you understand a network
by saying it’s China’s version of
Facebook or Twitter. See below
for a summary of the big players,
grouped very loosely by the platforms in the West that they most
closely resemble.
THE PLATFORMS MOST
SIMILAR TO FACEBOOK
• P
engyou
Means ‘friend’ in Chinese, is
similar to Facebook and has
259m users, but is part of the
Tencent QQ network of 784
million users.
• R
enRen
51 million unique monthly users
and widely believed to be in
decline.
• K
aicin001
113 million users, older and
more professional demographic
than RenRen.
THE PLATFORMS MOST
SIMILAR TO TWITTER
• S
ina Weibo
‘Weibo’ means microblog. Sina
Weibo is the most popular with
600 million users (150 million
monthly actives). It offers
banner ad opportunities and
promoted post functionality.
It is twice the size of Twitter
globally. Remember that Twitter
is blocked in China.
million taxi rides having been
booked through its app in January 2014.
THE PLATFORMS MOST
SIMILAR TO YOUTUBE
• Y
ouku/Tudou
• T
encent Weibo
Tencent Weibo: with 230
million active users of a
user base of 507 million via
Tencent’s instant messaging
service.
THE PLATFORMS MOST
SIMILAR TO WHATSAPP
• W
eChat (Weixin in China)
271.9 million users, similar to
WhatsApp but the comparison
does not quite do it justice as
Wechat provides a number
of business benefits, such
as a self-service ad system
called Guangdiantong (GDT)
for display ads and options to
create a mini-site within its
platform and a shop feature
(with its own Wechat payment
integration). Wechat has also
begun acquiring various companies that extend its power and
usefulness to consumers and
marketers. For example, Wechat
now offers taxi booking via
a recent acquisition, with 21
The former having recently
acquired the latter, similar to
Youtube and both operate as
independent operations. They
have 400 million monthly users
and not unlike YouTube, they
allow people to upload their
videos and post comments, and
allow businesses to have brand
pages and place ads at the
beginning of videos. Soku.com
is Youku’s video search engine.
• I qyli
Baidu’s vehicle in this area has
been looking to make acquisitions in the space. Current
reports are that it may now be
bigger than Youku.
THE PLATFORMS MOST
SIMILAR TO MYSPACE
Allows users to blog, keep
diaries, listen to music, share
photos. It’s owned by Tencent
and is the first or second most
popular social network in China,
depending on who you listen
to. With a base of 712 million, it
has between 240m and 600m
active users.
• 5
1.com
Many sites in China have
numbers for domain names as
they are homonyms in Chinese
– 51.com sounds like “I want”
in Chinese. Many believe it’s in
decline and has had a number
of challenges, including having
been blocked by the authorities
for objectionable content. It’s
rumoured that it is the platform
of choice for “the world’s oldest
profession”.
• D
ouban
Douban is very popular with
special interest groups and
communities and for networking around certain topics. It
has around 60 million monthly
active users, from a base of
around 100 million.
THE PLATFORMS MOST
SIMILAR TO FOURSQUARE
• J iepang
• Q
zone
Very similar to Foursquare,
sharing most functionality.
SOCIAL SHOPPING
SITES LIKE GROUPON OR
PINTEREST
• M
ogujie
Whilst the above sites loosely
mirror important channels and
networks in the West – Facebook,
Twitter, WhatsApp, Slideshare –
there are aspects of social media
in China that are not mirrored
in the West. Perhaps the most
important is how important
bulletin boards and forums are. In
China there are thousands across
a diverse range of topics – hyper
niche. Their popularity is principally due to, as we’ve mentioned,
They are an important channel for
marketers, although marketers
need to be aware that editors in
these bulletin boards and forums
will actively remove posts that
are overly sales-focused or where
the subject matter is not something they approve of. There are
paid advertising options but are
considered very expensive.
A quick note on blogging. There is
a very active blogging community
“YOU CAN BE IMPRISONED FOR MISREPRESENTATION OF THE
TRUTH IN SOCIAL MEDIA IN CHINA”
75 million users. Social shopping for the fashion conscious.
• M
eilishou
32 million users, more about
social shopping than pinning.
• L eho.com
Social platform for local businesses to connect with consumers.
Chinese internet users being
distrustful of official reviews and
ratings, and seeking out advice,
comments and reviews from
people around their interest or
need. Forums deliver on that need
with forum threads often having
thousands of comments around a
single topic. XCar, for instance, is
an automotive bulletin board with
8 million users and active chatty
constituents.
in China, and currently a number
of highly read bloggers have been
accepting payment from brands
to review their products, and even
review competitor products negatively. The going rate is around
200 Yuan ($73) for an 800
character post. Note that you can
be imprisoned for misrepresentation of the truth in social media in
China. You have been warned.
Ones to watch, that are increasing in popularity are the likes of
Docin.com and 51ppt.com, which
are like Slideshare (which is incidentally blocked by the national
firewall).
XCar’s VW Golf 6 forum: 80,000 posts and growing.
MOST POPULAR WEIBO
ACCOUNTS
Twitter’s most popular account is Katy Perry’s,
with 54m followers, followed by Justin Beiber
with 52m, and Barack Obama with 44m.
China’s public elite exceed these numbers, but
on Weibo not Twitter. Katy wouldn’t break top
5.
Chen Kun
A famous actor and singer is the most popular,
with 73m weibo followers.
Yao Chen
A famous Chinese actress is second with 71m
followers.
Amy Cheung
A romance novelist, has 61m.
Guo Degang
A Chinese comedian, has 59m.
Zhao Wei
A popular actress, has 55m.
Ruby Lin
Is a Taiwanese actress, television
producer and singer with 55m.
Chen Kun, the most popular account on Weibo with 73m
followers. Burberry has made particular note of the impact
he has had on their brand after posting about them twice
on his weibo account last year.
What you need to know about
mobile
移动
About 78% of web access in
China is via a mobile device, a
total of 460m users. In a PWC
survey they found that 77% of
their Chinese sample are buying
products on their mobile phone,
compared to a global average of
43%. We talk about ‘mobile first’
strategies in the West, and we
mean even more so in China.
Unlike in Western markets, Apple
is not a powerful player in China.
It has 7% market share, making
it the fifth most popular handset
maker after Samsung, Lenovo,
Coolpad, and Huawei. Whilst that
may change with China Mobile
agreeing to sell Apple’s phones,
Xiami
Apple
Samsung
they have very stiff competition
indeed. Note that neither Microsoft nor Blackberry even register
in the chart below.
• M
any foreign app stores are
blocked by the firewall or
have their comprehensiveness
compromised by it.
In terms of the operating systems
running on these phones it’s
overwhelmingly Android with
over 90% market share. This
would suggest that Google Play,
the default store on Android
devices, should be making Google
a fortune but that is not the case;
most Android users don’t get their
apps from Google Play but from
other sources.
• M
any popular software products and social networks that
are highly used in China come
with these app stores as part of
their ecosystem, for example,
360 Market has over 115,000
apps and come bundled with
their free mobile security app
(China’s most popular).
This is true for most handsets and
operating systems and is because
of a number of reasons:
Other
Wandoujia
Baidu
Tencent
Huawei
Lenovo
Coolpad
Mobile phone market share in
China.
Qihoo 360
Most popular places to get Android
apps in China.
• S
ome handset manufacturers
will default the user to their
own app stores, for example
Xiaomi’s handsets.
• L ocal app stores often attract
the best apps, for example apps
in Baidu’s app store get great
listings in their search engine
results. This makes those
app stores more popular over
anything offered by a Western
manufacturer or publisher.
In addition, many people have
their phones rooted or flashed
to replace their standard mobile
operating system, like Android,
with a local variant. This is for a
number of reasons:
• I t allows retailers and end
users to replace Apple or
Google services with Chinese
ones that will actually work
in China. 91HiAPK (part of
Baidu) for instance implements
pre-installs on smartphones
by cooperating downstream
with handset manufacturers.
They announced last year that
they had completed their 100
millionth user for their platform.
• F oreign app stores are slow to
load due to the lack of LTE in
China.
• C
hinese consumers don’t like
paying for apps – 89% of their
app downloads are free – and
rooting allows them to get more
apps for free. Chinese consumers appear happy to spend more
on hardware though; research
by IDEO, a consultancy, and
reported in The Economist
reported that it was not uncommon for workers to spend a
month’s salary on a new phone.
most users seem to be heavy
users. The average consumer in
China downloads 40 apps a year
on to their phones and total time
spent running an app has grown
by around 870% compared to
200% in the rest of the developed
world.
The hacking/rooting costs the
equivalent of only a few dollars,
and includes the loading of your
phone with various popular apps
whilst they are patching the OS.
This may go some way to explain
the established and growing
in-app advertising market (year
on year growth of 25.1%) as if
people aren’t buying the apps the
developers need to find another
way to monetise. With regards
to monetisation, a good rule of
thumb is that the app store will
take 30% of your in-app revenue,
with that percentage flipping
if you use the app store and its
partners to help promote your
app across their multitude of
properties. This doesn’t include
the percentage points taken by
your billing partner too. This will
sound very expensive to Western
marketing ears, but you have to
view this within the context of
how digital business is conducted
in China, where channel partnerships are infinitely more important
there than here.
Note that twice as much in-app
ad spend goes towards targeting
Apple/iOS users than Android
users based on the relative difference in average affluence between
the two groups being so large.
Finally, the mobile gaming market
is growing at a huge pace and
is already immensely popular.
It represents 7.5% of the total
Chinese games market, up 5.1% in
a year. Mini games are common
in China and serve to build brand
awareness for many marketers.
• C
hinese users need a good
input method for pinyin so will
often need to go outside of the
Android/iOS ecosystem to get
one.
• C
hinese users need caller
display functionality to identify fraudulent phone calls and
texts, and so will often need to
go outside of the Android/iOS
ecosystem to get one.
• T
he best apps are not on the
app stores that we are familiar with, largely because it’s
difficult for developers in China
to monetize directly through
Google in-app (IAP) billing or
similar.
Rooted phones are most common
with heavy mobile users, and
Mobile phones and a Nike shopping bag on the Beijing subway. This is your
customer – are you targeting them?
What you need to know about
marketplaces
交易市场
Marketplaces are an established and substantial part
of the Chinese Internet economy. According to an IDC
GMV report Alibaba Group, the largest online and
Suning
mobile commerce company in the world, are the 800
Amazon
pound gorilla. And news has it that they are highly
Yixun.com
likely to become the biggest IPO in history. It operates
VIP.com
the most popular B2B marketplace (Alibaba) and also
the most popular B2C marketplace, Tmall, which sells JD.com
both domestic and international branded goods. In the
B2C world, Tmall rules with over 430m monthly visitors, followed by JD.com with over 300m. Together the
two represent over 70% market share in their sector.
Other
Tmail
Western brands are already seeing significant success
using marketplaces as their initial entry points into
the Chinese market. For example, Estee Lauder’s Tmall
sales in June 2013 exceeded 10 million in number.
Ecommerce marketshares in China
Tmall’s homepage, China’s most popular B2C marketplace.
Note the abundance of logos of Western Brands.
What you need to know about
analytics
分析
Now you know how to drive traffic
and how to communicate to your
Chinese audience, you will need
to then make sure you can track
and analyse your performance.
More than 80% of China’s most
important eCommerce sites are
using Google Analytics (GA).
However, you will need to adapt
the way you measure and analyse
for the Chinese market:
• G
A will often miscategorise
sources. For example, well
known Chinese search engines
may be catalogued simply as
referrers and not as search
engines. This was observed
recently with Baidu and 360
being correctly identified as
search engine sources, but
Sogou and Soso, representing
14% of all search engine usage
in China, as just as referrers
very important in China. The
most important will need to be
re-appropriated into the social
category – use social listening to
identify the key sources relevant
to your business
• U
sing Baidu Tongji, similar to
Google Analytics, is useful too
as it will provide SEO advice
that will improve your rankings
in Baidu, China’s most popular search engine. Tongji also
includes demographic insights
based on Baidu’s known users
that GA will not have and is key
if you’re undertaking Baidu paid
search activities.
One final thing to note is that the
Great Firewall has been known
to periodically block Google
Analytics so if you see your traffic
suddenly drop to the floor, then
you’ll know why.
• ‘Not Provided’ is not an issue in
China due to the limited usage
of Google and Chrome so your
analysis across global markets
must bear that in mind
• G
A automatically categorises
social networks as ‘social’
sources, but misses out bulletin
boards and forums, which are
Baidu Tongji, or Analytics provides marketers with the tools they need to measure
their performance.
final thoughts
Transformers 4 wasn’t particularly well received by critics, but it has made a fortune in China, and it’s simply
down to solid local marketing:
• P
opular Chinese star Li BingBing has a major role,
with a small part for ex-boy band actor Hang Beng.
• O
ver 30 minutes of action takes place across three
cities in Mainland China and also in Hong Kong.
• P
aramount Pictures ran a reality TV show to select
four Chinese actors for the movie that was very
popular.
• T
he movie includes lots of Chinese product placements such as a Chinese milk brand and Lenovo
computers.
And online:
• T
he reality show’s casting videos were published on
the Chinese Transformers site and seeded across the
social networks.
• A
Baidu Tieba community forum was created to help
promote the movie, sponsored by Chevrolet, with
thousands of comments.
• T
enecent Wechat’s online ticketing platform was
used to promote the movie.
• T
ie-in campaigns, like one for Black Duck (duck meat
specialist), were placed on Tmall.
• T
hey had the stars of the movie wishing Chinese high
school kids luck with their entrance exams online!
WHATEVER YOU THINK OF THE MOVIE, ACKNOWLEDGING THE CHINESE MARKET AS ONE
FILLED WITH IMPORTANT CONSUMERS THAT LIKE WESTERN PRODUCTS, BY TAILORING
YOUR PRODUCT AND PROMOTION TO TAP INTO IT, IS AN EXCELLENT APPROACH. AND THIS
WILL BECOME THE NORM VERY, VERY QUICKLY. LET’S ALL GET INVOLVED.
Social monitoring is dead: Introducing Social Intelligence
Social media is an essential route to your audience
Social media and the law: Common pitfalls and how to avoid them
Data Journalism: The most effective method of link building in the finance sector
Customer Support: Maximising call deflection with search optimisation
Performance Display: B2B marketing’s best kept secret
Google Shopping: Getting the most out of product listing ads (PLAs)
Digital Marketing in China: What you need to know
International Search: What you need to know
Hybris: An introduction to the world’s fastest growing ecommerce platform provider
Ecommerce retail platforms: An overview
Ecommerce personalisation: Enablement for retailers
The Mobile consumer: Digital marketing insights and advanced strategies
The Update: What’s new in Search and Social
What is it?
Don’t fancy breakfast?
The Greenlight Breakfast Club is a series of educative
breakfast briefings, from 08:30 – 10:30, held in The
Loft at Greenlight’s offices. Focusing on a different
service and sector every month, each event will deep
dive into the latest industry and digital developments.
We’re also running evening events this autumn:
Topics
Social
Display
eCommerce
SEO
PPC
Client Services
• A
CRO Walkthrough. Introduction to CRO and cocktail-making workshop – 30th October
• G
oogle Mobile – Why mobile matters – joint event
with Google – 13th November
All our events are free to attend, so take your pick!
Sign up at www.greenlightdigital.com/events or email
[email protected] to register your
interest.
2015 
Sep
Oct
Nov
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Jan
Feb
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27th
The inclusion of popular Chinese
actress Li BingBing in the latest
Transformers instalment helped
ensure the movie’s marketing
and advertising would reach the
widest possible Chinese audience.
In addition, Li BingBing is one of
the faces of Gucci in China, and
partnered with Gucci Timepieces
and Jewelry to present a special
edition of its Bamboo collection.
In a recent interview she
mentioned Alexander Wang
and Alexander McQueen, doing
wonders for the brand awareness
and positioning of those brands
in China
ABOUT GREENLIGHT
Greenlight is a multiple award-winning digital marketing agency that designs, builds, deploys and measures
marketing solutions and campaigns across Search,
Social, Display, Mobile, eCommerce, and more, with
the unwavering objective of achieving dramatic growth
for its clients. Greenlight promotes brands and products in 26 languages and 42 territories on behalf of
such clients as Legal & General, ghd, Dixons Carphone,
Urban Outfitters, Millennium and Copthorne Hotels,
Laura Ashley and many more.
If you’d like to talk to us about China or anything
related to digital marketing, please feel free to contact
us:
Greenlight Digital
The Varnish Works,
3 Bravingtons Walk,
Kings Cross,
London, N1 9AJ
+44 (0)20 7253 7000
[email protected]