According to The
47th China Statistical Report on Internet Development, the
total number of Internet users in China reached 989 hundred million
by December 2020, which is an increase of 84.50 million compared to
March 2020. China’s internet penetration rate exceeded 70% by
December 2020.
In addition, China has been the largest online retail market in
the world since 2013. In 2020, the revenue of online retail sales
reached CNY 11.76 trillion ($1.81 trillion), which was an increase
of 10.9 % compared to 2019. The number of online shoppers in China
reached 782 hundred million by December 2020, another increase of
72.15 million compared to March 2020.
With an ever-increasing internet penetration rate as well as an
ever-growing online market, digital marketing becomes a priority of
many businesses operating in China. If companies need to create
their digital strategy, they can never ignore the three digital
behemoth trio of China: Baidu, Alibaba and Tencent, which are known
as BAT for short. Both Alibaba and Tencent have their own ecosystem
with their star apps as well as their own payment service which
companies need to leverage because Chinese people have gotten so
used to the two online electronic payment methods already. Baidu
has its own different ecology, and it was the pioneer to apply deep
learning of all the BAT giants.
Definition of Digital
Marketing
Digital marketing refers to a
targeted and data-driven marketing approach that uses Internet,
interactive digital media, search engines and mobile devices to
reach customers and achieve various goals.
Strengths of using digital marketing in China
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Comprehensive information
The price, specification, technical standard, warranty
information, method of application, and common Q&A of a product
can be displayed clearly on the Internet. With digital marketing,
customers can access all this information more easily than with
conventional marketing.
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Integration and convenient conversions
Digital marketing integrates pre-sales promotion, transaction,
and after-sales services into one chain of services, allowing
customers to benefit the most from the services provided by the
business. In the past, if a person became interested in a product
after seeing a TV advertisement or a poster, the fastest way he or
she could purchase the product is by calling the company to make a
reservation and then pay on delivery. With digital marketing and
its well-designed webpage or software, conversions are easier and
more convenient. A person can simply click a tab on his or her
phone or laptop to make the purchase.
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Broad geographic reach
With digital marketing, an advertisement is not subject to
geographic constraints. Once an advertisement is placed on the
Internet or a social media platform, people from all over the
country can see the advertisement.
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Cost efficiency
Firstly, as the effects of an advertisement are not constrained
by geographic boundaries, businesses do not need to place so many
advertisements as before. Secondly, with digital marketing,
businesses can directly sell their products to customers. The
payment to local distributors can be saved. Thirdly, people who
browse the information of a product on the Internet or social media
platforms are usually those who have the tendency to purchase or
are at least interested in the product. Thus, this avoids invalid
clicks and ineffective advertisements to a certain extent. All
these save costs for businesses.
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Personalization
Many websites and applications can track people’s browsing
history. This enables websites and applications to provide people
with personalized content. Since more targeted information is
delivered to each consumer, a consumer is more likely to find
needed products and make a purchase.
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Quantifiable results
With big data analysis and advanced information technology,
businesses are able to track the number of conversions made from
implementing a certain digital marketing strategy. This allows
businesses to adjust their digital marketing strategy according to
the current market trend and people’s feedback on their
products. Businesses can also adjust their inventories
accordingly.
Most commonly used digital marketing strategies in China
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Search Engine Optimization (SEO)
Search Engine Optimization (SEO) is often defined as “the
art and science of making web pages attractive to search
engines”. Businesses apply this strategy to improve the
rankings and visibility of their websites on search engines. Search
engines rank websites based on factors such as keyword relevance,
quality of website’s content, level of user engagement, number
and quality of inbound links, and structure of the website. SEO
specialists use these factors as key indicators to help businesses
improve their websites. Although being a widely used strategy, the
effects of SEO can be limited for certain reasons: 1) The
algorithms of a search engine change frequently. Businesses need to
closely monitor these changes and make adjustments accordingly. 2)
If the SEO of a website is made by amateurs or made
inappropriately, search engines may punish this website by lowering
its rankings or clearing its data on the search engine. In China,
SEO is often implemented on search engines such as Baidu, Sogou and
360 Search. As these search engines struggle to read foreign
languages, the website must be in simplified Chinese. The loading
of pages and accessibility will be improved if the official website
is hosted in China. Besides, the content should also comply with
the law and respect China’s restriction on the themes of
articles and videos.
Most commonly used search engine in China:
- Baidu—Baidu is the most popular
engine in China and is the preferred search engine in the country.
Baidu has around 70% of the market share in China, so it is crucial
to focus on how to be highly ranked on Baidu. When implementing a
SEO strategy, it is important to create fresh and new content if a
company wants to devote itself for a high ranking on
Baidu. - Sogou— Sogou was established in
2004, and it is famous for its Sogou Input keyboard for mobile
devices as well as tablets. The market share of the Sogou search
engine in China is nearly 25%. It is worth noting that in 2013
Tencent acquired the search engine, as a result, Sogou searching
engine is built-in on the WeChat platform, which is a unique
advantage when compared with other search engines in
China. - 360 search– 360 search claims to
have unique ranking algorithms. Thus, companies need to implement
different SEO strategies for it. Besides 360 search, the company
also owns several internet properties such as 360 directory and the
360 anti-virus program. - Bing— Although often made fun of in
the West, in China Bing is gradually and recommended by many
Chinese netizens as it has the access to western search results.
Bing has two search bars, one is for domestic searching only, and
the other one is for international results.
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Content Marketing
Content marketing is a strategy to attract leads by delivering
relevant content to targeted groups without conveying an
advertising message directly. According to a
survey from Pew Research Center , 81% of consumers’
purchasing decisions are influenced by ‘doing their own
research online’, making content marketing important to get in
touch with customers. In China, examples of content marketing
include advertorial, press release, podcasts, blogs, audio, video,
white book and infographics on Weibo, WeChat, search engines,
official websites, and client-side applications. As Chinese
netizens encounter content in the hundreds of thousands on their
social network apps every day, creative and eye-catching content
that convey the values of a brand can be the key for content
marketing campaigns.
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Pay-Per-Click Marketing (PPC)
Pay-Per-Click marketing refers to the strategy that drives
traffic to a business’s website through paid advertisements.
Businesses post an advertisement on an online platform and pay a
certain fee each time this advertisement is clicked by an Internet
user. Keyword research plays a most significant role in a PPC
campaign. There is an extremely popular ‘cyberspeak’ on
Chinese social media called “种草”
(“Zhong Cao”). This means the desire to buy a particular
product or experience something, or influencing or being influenced
to long for a particular product or experience. The basic logic for
“Zhongcao” is “approaching from different
perspectives and then giving an unintended exposure to the
product”. Brands actively develop their new products and
products with new USP’s by implementing advertising campaigns
to attract people’s attention.
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Social Media Marketing
Social media marketing is a strategy to promote brand awareness,
drive traffic and establish social trust by engaging people on
social media and online discussion. Nowadays, the factors and media
that influence consumer decisions have changed, so it is essential
to create active and recurring content to attract consumers’
attention and give them the necessary information when they make
decisions and conduct searches. In China, businesses often hire
professionals to manage their social media accounts, including
publishing new product releases, replying to followers’
messages, and initiating online discussions. Businesses also
collaborate with celebrities and KOLs (Key Opinion Leaders) to
promote brand awareness through online interaction on social media
platforms. In recent years, more and more businesses also use
social media platforms as direct sales channels. The most popular
social media platforms in China include Weibo, RED, Douyin
(TikTok), and WeChat public accounts. Because of interpersonal
trust between KOLs and their followers on specific social media
platforms, this way of marketing can increase brand awareness and
shorten the time before a consumer decides to purchase.
Furthermore, it can reduce the marketing expenses of brands while
simultaneous long-tail effects on the content KOL are provided.
A report of “2019 China Digital
Marketing Trends“, released by AdMaster, includes a total
number of 240 samples (110 brand advertisers are included). The
report mentions that, at the level of social media marketing, KOL
marketing is gradually being regarded by brands as a top priority
in social media communication, occupying 60% of the digital
marketing industry. Live stream and short video contribute 55% of
the digital marketing industry, then followed by official public
account operation, with a proportion of 54%.
To make sure the best practice of marketing, Chinese companies
usually implement mixed digital marketing strategies but with
different emphases.
Most commonly used social media platforms in
China:
- Wechat: WeChat is the most popular social
media in China. WeChat has now reached
24 billion monthly active usersin the first quarter of 2021,
making it the
5th most popular/used social media platform worldwide. WeChat
has a lot of features consisting of voice messaging, text messaging
and video calls, such as group messaging and calls. Wechat can also
be used for payments, short video creation and sharing, creating
posts on their newsfeed, live streams, games, and official accounts
(which can be registered by individuals and by organizations). It
also provides services like payment for living expenses, and QR
codes for public transportation and mobile top-ups etc. - Sina Weibo—also known as Weibo, is a
micro-blogging site in China released in 2009. Given the character
limits it is usually labelled as the Chinese version of Twitter.
With nearly 500 million users on the platform, it is the second
most popular social media in China. Users can upload images, videos
and gifs for information sharing and the opportunity to engage with
each other. Organizations, corporations, and celebrities from
different fields joined Weibo to interact and share information
with their followers, customers, and fans. - QQ—QQ is the first popular chat app
developed by Tencent. While WeChat has become the market leader, QQ
still prevails among younger users. The advantage for QQ is that it
does not require phone numbers to sign up, which attracts
youngsters to register when they are not even allowed to have their
own phones yet. - Zhihu— Zhihu can be seen as a
Chinese equivalent of Quora, it is the largest online
question-and-answer sharing community in China. It is reported that
Zhihu had over 85 million monthly active users in the first quarter
of 2021. - TikTok–In China, TikTok is known as
Douyin, and it is the most popular video-sharing platform nowadays.
This short-form video platform is rich in various genres with
plenty of corporate accounts publishing creative video clips on
it. - Xiaohongshu—also known as RED or
Little Red Book, it is a social media and cross-border e-commerce
platform. The latest data of Red shows that it currently has over
100 million monthly active users, with nearly 300 million notes
(shared information with upmost 1000 characters) released in 2020.
More than 90% of the platform’s users are female, who use the
app for both searching and conducting research on skincare and
cosmetic products as well as popular brands in various areas. Most
of the users are white-collar, the urban middle-class, exquisite
mothers, and urban Gen Zers with strong spending power. As a
result, the platform comes with the attribute of recommendation by
KOLs and a high purchase conversion rate naturally. - Toutiao – Toutiao is the hottest
news and information platform right now, not only do official
company accounts publish formal news, but it is available for
individuals to create content in different fields as well. Readers
can leave comments to the writers for interaction.
Future emphasis in digital marketing in China
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Accurate value proposition
Although big data analysis plays a large part in digital
marketing, it should not be the ultimate focus of businesses.
Besides functionality, the value proposition of a brand is what
really attracts and retains consumers. In the Internet era, when
searching for a certain product online, people can easily be
dazzled and diverted by the hundreds of advertisements. Without a
clear value proposition, it is hard for a brand to establish a
stable long-term relationship with customers. Under a prosperous
economic condition in China, customers often seek a higher-level
satisfaction when conducting a purchase besides meeting basic
needs. Businesses therefore should consider developing a unique
brand culture and a clear value proposition that accurately match
the demands of their targeted customers. In this way, customers
will perceive a dual satisfaction, both material and spiritual when
purchasing these businesses’ products. In this way, an
emotional connection is established between the business and its
customers, further strengthening the business’ attraction to
its customers. On top of that, digital methods should be used to
ensure that valid information, high-quality content, and the clear
value proposition of a brand are delivered and made visible to the
correct group of targeted consumers.
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Active Online Communities
Since the number of frauds and false information increase as
more new brands emerge online, more and more consumers indicate
that they value other customers’ feedbacks higher than the
information provided by the businesses. In China, consumers tend to
search on social media platforms, such as RED, for evaluations
provided by other users before purchasing a product. On many social
media platforms, there are various online communities consist of
people who share the same interest in a certain product, brand, or
value. KOLs, regular customers of a brand or people with related
professional backgrounds are often regarded as authorities in these
online communities. These authorities often hold a substantial
influence over consumers in their communities and can sometimes
affect market trends. Therefore, it is significant for businesses
to build such online communities consisting of their own leads or
develop ‘loyal’ regular customers and KOLs who are active
in relevant communities. Businesses may also interact with
consumers directly and respond to consumers’ questions in
online communities through their official accounts. In this way,
businesses can not only have a better understanding of
consumers’ needs but also establishes social trust with
consumers.
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Conversion rate over traffic
Digital marketing is more than driving traffic. A valid digital
marketing strategy should be able to convert public traffic to
private traffic, and then to a purchase. A valid digital marketing
strategy should ensure that consumers do not find advertisements
annoying or treat advertisements as something merely for watching.
Businesses should monitor whether a digital marketing strategy is
able to encourage consumers to follow the company’s official
account on social media platforms, such as RED, Weibo and WeChat,
to check the company’s official website, to search for other
products provided by the company initiatively, to sign up for the
company’s newsletter email list, and to eventually make a
purchase.
Potential difficulties for foreign companies to implement
digital marketing in China
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Different mainstream social media platforms
Social media marketing plays an irreplaceable role in digital
marketing in both China and foreign countries. Nevertheless, the
mainstream social media platforms in China and most western
countries differ significantly. In China, mainstream social media
platforms used by digital marketing include Wechat, Weibo, RED and
Douyin (TikTok). In most western countries, mainstream social media
platforms and websites are Facebook, Instagram, Snapchat and
YouTube. No matter how successful these western companies’
campaigns are on foreign social media platforms, Chinese consumers
do not have access to them since these foreign social media
platforms are blocked by firewalls and local bans.
In addition, since foreign companies, especially those that have
never entered the Chinese market before, have little or no
experience in using Chinese social media platforms, these foreign
companies need to spend lots of effort to adapt to these platforms
and to understand the stance of branding and advertising in China.
It can be hard for these companies to start a successful social
media marketing campaign without proper assistance.
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The gap between online and offline
A digital marketing strategy is most successful when online
promotion is combined with offline events. Many Chinese companies
hold creative offline events to support online promotion. Companies
also invite brand icons for new product releases. Based on
customers’ feedback on products and their experiences of
offline events, Chinese companies can adjust the strategy of
offline events efficiently and flexibly. For foreign companies,
such close collaboration between online and offline events is often
hard to achieve. The effectiveness of digital marketing is often
undermined.
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Stricter personal information protection policies
During the 13th Standing Committee of the National People’s
Congress in 2020,
Cybersecurity Law of the People’s Republic of China and Personal
Information Protection Law of the People’s Republic of
China were published for comments. The Laws prohibit the
exploitation of consumers’ personal information. Moreover,
these policies will serve as a legal reference when new issues
arise. Nevertheless, the definition of exploitation is somewhat
ambiguous. Since digital marketing relies on big data analysis
heavily, these policies can hinder the implementation of certain
digital marketing strategies for both Chinese and foreign
companies.
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Cultural & lingual challenges
For the purposes of the Intercultural
Studies Project, culture is defined as the shared patterns of
behaviours and interactions, cognitive constructs, and affective
understanding that are learned through a process of socialization.
These shared patterns identify the members of a cultural group
while also distinguishing those of another group. Although
globalization and the spreading of the internet have an extent
solved the problem, still the local cultures and their
understanding matter for effective marketing. China has a
5,000-year history with profound destiny. A deep understanding of
the Chinese culture is a challenge for foreign companies, not only
because of the complex language system, but the metaphoric meaning
can be rich as well. When it comes to digital marketing, things
become more complicated. Like Western people, especially for the
youth, cyberspeak has been infiltrating into daily communication in
China. However, cyberspeak is even changing the original meanings
of Chinese characters. It forces reluctant domestic companies to
adapt the way they communicate with their target customers. The
culture of foreign companies should adapt to local cultures by
implementing proper Chinese language in line with their digital
marketing branding and promotion. Brands need to know what kind of
advertising slogan can be resonated with a particular group of
Chinese in the market.
