Author: Luis Galán

Lancôme’s PR Disaster in China and What We Should Learn From It

During this past week, Lancôme has become one of the hottest hashtags on Weibo. This time, however, being the hottest was not beneficial at all for Lancôme! Huge damage to its brand image and reputation in China has given Lancôme China an unprecedented PR nightmare.

What happened there?

On June 2^nd , the actress Denise Ho (何韵诗or HOCC,), who was performing energetically at the 2016 “Occupy Central” event in Hong Kong, posted a picture about a concert invitation on her Facebook page. This concert was going to be hosted by Lancôme HK and it was supposed to take place on the 19^th of June. Since Denise Ho was one of the invited artists, some netizens in China Mainland found this post and reposted it on the Weibo platform.

The news created a huge earthquake among Chinese netizens! The reason is that, for people in Mainland China, the “Occupy Central” is a sensitive topic and most of them hold an opposition towards this event. As one of the most energetic public characters who supported this event, Denise Ho was forced out of Mainland China. Consequently, in the middle of May this year, Denise Ho had met with the 14^th Dalai Lama in Japan on her 39’s birthday. For the Chinese citizens, the Dalai Lama is also a sensitive character since he supports the independence of Tibet. Thus, Denise Ho is tagged as “supporter of the independence of HK” and “supporter of the independence of Tibet”.

Almost immediately, overwhelming criticisms swept all over the social media in Mainland China including Weibo, WeChat and so on, directed towards Denise Ho and all the brands that belong to L’OREAL Paris, including Lancôme.

Nonetheless, the true nightmare came on the 5^th June, when Lancôme China posted an announcement on its official Weibo account shown below. In this announcement, Lancôme China stated, “Denise Ho, who is an artist in Hong Kong, China, is not the spokesperson for Lancôme China.” Although Lancôme China had just made an apology, the netizens on Weibo did not show any forgiveness. Contrary to what Lancôme China expected, the netizens began to create hashtags like “Against Lancôme”, “Against L’OREAL”, and some of them with comments like “never use any products of Lancôme”.

Under the huge pressure of public opinion, Lancôme China announced that they would stop all the cooperation with Denise Ho immediately. In addition, Lancôme announced that the concert was going to be canceled due to security reasons.

On 7^th June, the authoritative media in Mainland China – Global Times, published an editorial directed towards this event, named “Who’s responsible for Lancôme being implicated by the artist who supports “Occupy Central”(兰蔻因“占中艺人”受牵连，谁之过) ?”. In this article, Denise Ho was blamed directly and it was pointed out that: the Chinese netizens will never show mercy to anyone who wants to “eat the Chinese dishes but break the Chinese pot”.

This whole chain of events has reached an international level. In France, some netizens wrote e-mails to the headquarters of Lancôme HK, and also announce online that if Lancôme does not reinstate the spokesperson position of Denise Ho in Hong Kong, they will resist against Lancôme in France.

Now, not only Lancôme China, but also the Lancôme Group, or even L’OREAL Paris, are facing this emergent PR crisis. With the words from the Global Times, Lancôme is now in a “Catch 22” situation and everyone who is following this event is waiting for the new PR progress of Lancôme.

What can we learn from this PR crisis?

Many international brands should conduct careful background researches before choosing their spokespersons, not only in China, but also in the rest of the world. The spokespersons can always influence the brand’s image and reputation if their behaviours are controversial.

Nowadays the Internet is developing rapidly, especially in China, Social Media platforms, such as Weibo, have become an important tool for information sharing, promotions, news, articles reading, etc. At the same time, due to 2 main properties of social media, which are divergence and interaction, any information shared on social media has the risk of causing bad influence or the opportunity of creating good reputation. Thus, evaluating information from all different angles before sharing is necessary and could, and should, avoid misunderstandings or even criticisms as much as possible.

Also, as a brand or a company, which is related to business, it would be better if we could apply “Business is business” in practice. Especially when promoting in China, try to avoid touching the baseline or sensitive topics, which might be dangerous.

Marketing in China is especially different from other parts of the world, trust us when we say, you do not want to have a problem like the one from Lancôme, so, why not let us do it for you? With our multiple offices in Europe and China, we build bridges between your business and the Chinese market sustaining competitive advantage, focusing time and maximizing the budget.

If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

This article was edited by Andres Arroyo Olson from 2 Open.

References:

http://opinion.huanqiu.com/editorial/2016-06/9011621.html

http://www.hzpgc.com/article/content/7262.html

http://www.bbc.com/zhongwen/simp/china/2016/06/160607_ana_heyunshi_hongkong_china_market_lancome

https://zh.wikipedia.org/wiki/%E4%BD%95%E9%9F%BB%E8%A9%A9

10 things you need to know to Build a Chinese Website (Part 1)

When planning to enter the Chinese market, one of the main points in every marketing plan should be the creation of a website that focuses on the Chinese consumer.

Naturally, there are some questions that come to mind…

• What are the differences between a western and an eastern website?
• What are the aspects that I have to keep in mind in order to trying to attract Chinese consumers?
• Would it be a good idea to just duplicate and translate my current content?

All of the above can be summarised in one question; what do I need to do in order to create a great website that will have the potential to reach the 675 million China internet users?

In this series of posts, we will try to give you some tips that will help you create a website for the Chinese market that will appeal to Chinese consumers and also match the style, tech and literary attributes of eastern consumers.

1 – Chinese Web Design – What the …???

When we look at a Chinese website, the first feeling we get is confusion… Language, structure, content … We can´t find anything similar to Western websites based (lately) on cleanliness and simplicity. Our China web design must be adapted not to our tastes, it must match Chinese consumer design taste.

If you have not navigated through Chinese websites maybe you don´t completrly understand what I mean. You´ll see easily the difference with these two examples. Taobao and Ebay, two B2C marketplaces (or C2C) from east and west.

Can you appreciate the difference in style, design, structure? I bet you do…

We can see a lot of information on Chinese site in contrast to the cleanliness and simplicity of the western site.

Our experience creating websites for the Chinese market has shown us some key points to understand and get advantage:

• Chinese websites use many more elements and are much more colorful than Western.
• Chinese language is different. It seems obvious… but there are things we have to consider about Chinese language such as:

1. There is not a capital letter in Chinese
2. There are no spaces between characters
3. Chinese characters are far more dense than our letters

• Chinese sites use a lot of animation, flashing texts and banners. This is clearly the opposite to our western websites where movement is disappearing. The reason can be it’s much harder to grab attention using fonts in Chinese than it is with western languages.

2 – User experience… Do they have any good one?

We have just seen as websites in China seem much more complex than we are used to. We might think that the user experience will be a nightmare, but Chinese user is so accustomed to information under this structure as we are to the western structure.

Chinese user is concerned about usability and user experience, but is used to webpages so busy usually does not care how the site looks. However the trend is towards simplicity and clarity on web pages. In a more European style.

Some of the highlights on Chinese websites regarding to navigation are:

• Chinese websites have a big number of links, however Chinese users do not like this system. This can be given by the low load speed internet in China.

• All this links use to open in other new windows. Why? Again it’s mainly an issue of speed. Internet access in China is generally slow, users have gotten used to opening new links while waiting for a page to load.
• Keyword search box as a navigate tool. Link system is not comfortable for users because they can be lost due to the big amount of links. For this reason, on Chinese websites keyword searches have to be really efficient, and the search bar must be top accessible.

3 – Hosting & ICP. DIstance matterS

The one who said that, in internet there is no distance, did not know about China. If you are not (legal and/or physical) in Mainland China, easy staff like finding the right hosting can became a little bit more complicated.

Let´s start from the beginning, one of the most common questions when we are going to create a China site is should we host our website within or outside China? Is there is a big difference? The answer is very clear, as far as possible we should try host the web in Chinese Mainland, and we will try to explain why.

China network structure is not the best, which makes the websites loading speed not the most appropriate. By hosting our web outside China this problem becomes much more serious.

Okay, so we are clear, we should host our website in China, now what? We must apply for a number of ICP (Internet Content Provider) to the Ministry of Industry and Information Technology of China. This is the ICP license that will allow our site to stay in Mainland China. Only companies with a physical presence in China can apply for this license (which usually see in the footer of the sites, as in our case).

For companies that do not have a legal entity in China, we do recommend looking for hosting solutions in Hong Kong, which can limit the problem of loading speed and make our site more accessible for the Chinese user.

Now that we talk about speed, even though the main problem affecting the same be the hosting (inside or outside) there are also other factors that can make our web go slower (and we have seen that it is a key point in China) as can be:

• Website images are not size optimized
• Poorly code in our website
• Low hosting quality (even inside Mainland China)
• Our site is using services blocked in China (Google Fonts, Google Maps, Twitter, Facebook, etc…) which prevents the page from loading

4 – Did you say… services blocked? … the Chinese Great Firewall

China not only has a huge physical walls to defend themselves (in the past). China also has a large digital wall, the Great Firewall. Originally known “Golden Shield Project” but ironically nicknamed Great Firewall, it is a censorship and surveillance project initiated by the Chinese Ministry of Public Security in 2003.

This project acts as a digital censor and block all websites that do not meet the content requirements that marks the Chinese government.

Here you can see some more information about how the censorship works.

Among other things, Chinese Internet censorship censored webpages that have content that include; news sources cover topics considered that are defamatory against China: such as police brutality, Tiananmen Square protests of 1989, freedom of speech, Taiwan Government, Dalai Lama or the Tibet Independence Movement International …

These sites are banned or are indexed to a lesser degree, if at all, by some Chinese search engines and have significant impact on search results.

As a result of this control in China they are blocked pages as usual for us as Google, Twitter or Facebook (it does no matter how much Mark go jogging in Tiananmen). Although great firewall control is easy to jump (using a VPN, for example) the difficulty of accessing these pages has made their use and popularity is low.

This means we need to be very careful with our website content, try to be sure to avoid Great Firewall content restrictions and not to use third party banned platforms like Google (Google Maps, Google Fonts), Facebook or Twitter.

5 – New Players & New Rules

So, no Facebook or twitter, how am I going to promote my website? China has a digital ecosystem different of everything we are use to. Surely you’re wondering how you survive without some of the usual promotional tools. Natural positioning in Google, PPC Adwords campaigns, promotion of content on social networks like Facebook or Twitter …

In China you will find new players who have occupied these gaps and in some cases, created new niches. These new players have taken advantage of the absence of foreign competition (Facebook, Google …), its adaptation to Chinese culture and peculiarity and in some cases even a strong government support.

These actors we found some “copycat“, certified copies of known systems, such as:

• Baidu, the Chinese search engine par excellence (suspiciously similar to Google)
• Weibo, the microblogging service (suspiiiiciouuusssslyyy similar to Twitter)
• Youku, video service (guess who it is similar?)

We also have WeChat, the jewel of the crown and the mobile app (almost an OS) that includes messaging, payments, calls, moments … and which we discussed in detail in another post.

For our website to be inside China digital life it must be adapted to the rules of these actors, common in the dailylife of the Chinese consumer.

So, who are the big guys that you need to be friend of?

As soldiers in a war, most of these tools fall into three large “armies”. These three groups are known as the BAT and are in constant battle to dominate the Chinese digital ecosystem.

In short, Baidu holds commanding market share over search. Alibaba holds to the same power over e-commerce. Tencent is the dominant player in social media. But they are constantly trying to invade their territory, in a very interesting war for any fan marketing.

One of the commonalities of the BAT is a full support of the government, together with its dominant position in the market, makes this status quo is difficult to change.

What does it means for our website? We need to adapt our communication to this new players, generating our social media activity through Wechat, optimizing our SEO for Baidu or 360, uploading our videos in Youku, adding sharing actions in our content with Chinese social platforms… anything we use to do in our occidental site does not help us here and can be even negative for our goals. As we have seen, if we keep on using tools like Facebook (post sharing options for example) we can be blocked by the Great Firewall.

Do you want to know more? Sure? CHECK THE SECOND PART OF THIS POST HERE

References:

http://www.china-briefing.com/news/2015/05/22/best-practices-launching-china-website.html
https://econsultancy.com/blog/67466-why-do-chinese-websites-look-so-busy/
http://www.latmultilingual.com/build-localized-chinese-website/

Sources:
http://www.freepik.com/free-vector/screen-with-a-website-and-icons_847180.htm
http://www.freepik.es/vector-gratis/trabajador-llorando_834598.htm

How can foreign SMEs be competitive in China?

Most western economies enjoy an abundant offer of qualified talent that proportionally lacks in China. Nevertheless, China’s macroeconomic situation is starting to increase the demand of qualified talent, and more importantly, it is starting to value it more, rewarding it in ways that we do not often see in other economies, or at least not back in Europe.

All of this creates a reality of scarcity due to the fact that an increasing amount of knowledge is being accumulated in just a few hands and results in a division between talent knowledge and labor knowledge. When competing in the knowledge market, being capable of assembling a talented team is the key difference that will give you the competitive advantage.

Big companies and well-funded start-ups are very aware of this fact, they put a lot of effort and invest a lot of money on the recruitment of talented personal.

So what about small and medium-sized enterprises then? What can they do in order to be competitive as employers in the Chinese market? And what can they do when big foreign companies tend to concentrate on tier 1 cities candidates that have good English communication skills?

The questions mentioned above have very difficult answers. Truth be told, most foreign SMEs in China have no chance of succeeding, or being competitive, as an employers in such a shark tank, that is, tier 1 cities. Looking at it from a market perspective, tier 1 cities are a horrible place to build and sustain a capable and long lasting team.

Probably, trying to move out of a tier 1 city is the first advice for foreign SMEs. Even if the idea of living in a truly Chinese city, without Starbucks or McDonalds hanging around, frightens you, it will make it a lot easier for you to grow your company. The only real issue here is that clients and movement is mainly happening around cities like Shanghai and Beijing and less in other cities, nevertheless there are plenty of other means through which you can get clients. At the end of the day there is no perfect place to grow your business without a few drawbacks, maybe once your company has grown enough you could consider moving to a tier 1 city.

It is worth mentioning, however, that finding clients is the first stage of every business, that initial stage where it is considered a top priority.  With its years of experience, 2 Open has long surpassed that, right now, finding clients is for us only a secondary priority. We are now focusing in process excellence, in nurturing scalable ways of working that continuously add value to our clients, keeping a stable and financially balanced organization that will last for many… many years…

This is one of the main reasons why our company does not only have offices in Weihai and Cáceres, but is based in Shanghai and Madrid. We are constantly making changes in order to maintain competitive advantage, we have already been in the market for 3 years and we are preparing for the upcoming 30. We strive in order to offer reliable, sustainable and long term oriented solutions that add value to China as a whole, not only its tier 1 cities

Probably you do not think that moving to tier 3 in order to assembly a powerful team is something you would like to do yourself. Well, do not worry about it. If you want to know more about how we work and how we help, engage, support, and lead our clients to succeed, contact us. We DO Open. Do you?

This article was edited by Andres Arroyo Olson from 2 Open.

Do other e-commerce platforms stand a chance against Tmall?

All of us are very well aware of the magnitude of the Chinese online market and, although it is currently the largest e-commerce market in the world, most of the market share is owned by the Chinese e-commerce giant Alibaba. Nevertheless, there are some other companies that also want their piece of the pie and with their vertical e-commerce platforms they are starting to put up a fight. This article will focus mainly on those vertical platforms that constitute an important part of the diverse Chinese e-commerce environment.

In the 4^th quarter of 2015 China’s online transactions surpassed 644.38 billion RMB, the pie chart shown bellow contains the market share of the top ten Chinese e-commerce platforms:

Before we continue, we first have to clarify the concept of vertical e-commerce. In this context, vertical refers vendors that offer goods and/or services that are specific to an industry or customers with specific needs. A vertical e-commerce platforms could be a independent brand or a specified category within a wide range of products such as clothes, 3C (computer, communication, and consumer electronics) products, cosmetics, etc.

If you already have a basic understanding of the Chinese e-commerce market, then you are probably familiar with JD.com. Currently the second e-commerce platforms in China after Tmall (owned by Alibaba Group), JD.com started as a 3C products vertical B2C website. Now, let us take a look at the market share of 3C products in China B2C online market:

Although Tmall is still on the first spot, the difference in market share of JD.com is considerably higher than with regular products. Tmall and JD.com combined own more than 80% of the Chinese 3C products market. Suning, on the 3^rd spot, and Gome, on the 4^th, both also started specializing in 3C products, however, nowadays they have also diversified their range of products. At the end, it seems that there are no actual vertical platforms anymore.

To study the online market, we cannot miss the biggest category, clothes. In the 4^th quarter of 2015, the total transaction of clothes is 235.57 billion Yuan, market share is shown below:

In this case, Tmall is leading with an absolute advantage of almost 3/4 of the market share. In this category, JD has 8.7% of the market share, VIP.com has 6%, and surprisingly others do not even have 1% individually, so from the big picture the vertical market for clothes is not active enough.

Another category that has had such a rapid growth we cannot ignore is the maternal and children products. Shown below is a pie chart containing China’s maternal and children products market share figures of major competitors in the last quarter of 2015:

The most noticeable difference in comparison with other categories is the porcentage own by other platforms that adds up to almost 20 %. Although Mia, Beibei, Babytree and others are in that 20% it is still a big figure.  In this category Tmall and JD.com own less than 70 % of the Chinese clothing market, so we can say, to some extend, that there is still space for vertical players.

The next category is books and, even though the books total transaction was just 5.31 billion Yuan, the market share gives us a slice hope of competing with general platforms, in this case Dangdang is leading with 43.8%, and Tmall is only on the 3^rd spot, just after JD.com.

Finally, we cannot say all vertical online platforms are dead in China just because most of the categories are gloomy, there are still some worth a try, and you just need to know enough about the current situation. If you don’t, luckily you saw this article, and you know 2open can always help you to find the right channels. So don’t hesitate, contact us now!

All in all, even though Tmall dominates in the Chinese market, there is still space for other platforms to flourish. Vertical e-commerce platforms seem to be the wisest option, specify in a certain category, gather information about the current situation in the Chinese market, and carry out your business plan. If you need further information about the market, would like to help you find the right channels, or want us to set up your business in China, do not hesitate in contacting us. Our group of specialists will happily assist you.

This article was edited by Andres Arroyo Olson from 2 Open.

References.

All products data from

http://www.analysys.cn/yjgd/17684.shtml

3C data from

http://www.analysys.cn/yjgd/17676.shtml

Clothes data from

http://www.analysys.cn/yjgd/17678.shtml

Children products data from：

http://www.analysys.cn/yjgd/17680.shtml

Books data from:

http://www.analysys.cn/yjgd/17681.shtml

Insights on ZARA in the Chinese digital market

Since first arriving to Shanghai in 2006, ZARA has had incredible achievements in the volatile Chinese fashion industry. Etam and Ochirly used to be considered as the “King and Queen” in this sector with the vast majority of the market share, however ZARA’s arrival crashed down this obsolete structure. In 2014, ZARA reached the top fashion brands in China, earning twice the revenue of Etam.

-Zara’s first Chinese store at Nanjing West Street in Shanghai.

In the same year, ZARA opened its official flagship store on T-mall. This is not the first step ZARA takes towards the Chinese digital market, in 2012, ZARA set up its own online shopping website “The ZARA China” and also published an m-shop application“ZARA”.

-ZARA China carries on with clear style.

-ZARA’s mobile application for IOS.

Despite all of this, the big brand’s official website is often tasteless, sort of similar to the one from Dell. Dell’s official Chinese website actually used to be the largest e-commerce platform, however, nowadays it has become a more passive marketplace. Apple is also a good example to illustrate this, its official e-shop is beautifully decorated, nevertheless,  Chinese users rarely to buy any products on it.

The main reason for this is because e-commerce not only involves the build up of a simple website. It requires collaboration throughout the supply chain, especially the logistics, and of course,  the follow-up services.

For many international brands, including ZARA, the option of building up the infrastructure to cover the broad Chinese market is perhaps not as profitable. Thus, it is essential, and  more appealing, to cooperate with the third-party platform like T-mall.

-The frontpage of ZARA on T-mall

Why did ZARA choose T-mall?

Many people thought the main reason was that ZARA wanted to catch up with the “11.11” festival on T-mall, which is the Chinese version of Black Friday. However, based on the opinions of many insiders, the market and the decrease on revenue in 2013 forced ZARA to set a foot on e-commerce.

-In 2013, its growth rate of net profit was less than 1%, which was its worst performance in the past five years.

-For the first quarter of 2014, its revenue increased by 4.3%, but net profit fell -7.3%. In contrast, in the past three years, it has maintained double-digit growth in net profit. When the results were published, Citigroup cut its TSP down from 130 to 120 euros.

-In May 2014, the monthly sales reached 60 million yuan, and consequently in June, the headquarter announced the plan to cooperate with T-mall, saying the shop would officially be settled soon.

-As for 2015, the growth rate on revenue increased 20%, and the market performed positively.

We can safely determine now the main reasons why a big company like ZARA entered the Chinese e-commerce scene. They can be summarized as the following:

1. E-commerce is a leading trend of buying behaviour in China and the amount of people buying things online is rapidly increasing.
2. This is a good way to promote ZARA itself on second and third tier cities, as it seldom makes advertisements.
3. The Chinese e-commerce contributes to the highest growing rate of GDP in the world.
4. The business model of T-mall and its fellow platforms just fits the needs of ZARA – Small amount but multiplicity.

All in all, e-commerce seems to be the way to go in China and who else to help you than 2 Open. Our goal is to understand our clients business needs in order to provide the best possible services.  If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

This article was edited by Andres Arroyo Olson from 2 Open.

L’Oreal Digital Marketing Campaign in China

In the first half of 2015, L’Oreal’s financial statement reported revenues of 12.82 billion euros worldwide. In comparison with 2014, there was an increase of 14.7%, which is the fastest growth that the company has had in the past 20 years. Its digital marketing campaign was not the exception, with an outstanding 40% increase in online sales, exceeding 1 billion euros; it represented 5% of the company’s total turnover strengthening its position in the online market.

Nowadays, in the cosmetic & beauty industry, 70% of customers search products online before they actually buy them, which means that social media must play a big role in this. Why? You might be wondering, well, the importance of knowing consumer’s needs and preferences enables companies to come up with tailored ads and maximize their marketing budget. Many industries have transitioned from the classic marketing model into its modern version to further understand consumers and optimize results.

It seems that the upcoming era is digital, the society now is constantly connected with their mobile phones, and people are interacting on social media all the time. Most Chinese people love to share moments of their daily life via Weibo or Wechat, these social mobile applications gather a lot of Chinese young people who are potential online buyers, this is one of the main reasons why this new consumption model results so profitable.

Taking all of this into account, L’Oreal, the global beauty brand, keeps track of trends and maintains strong competence in the Chinese online market. The business credo for the marketing industry “where are the consumers, where are we” is practiced well by L’Oreal. In fact, in the digital marketing revolution, L’Oreal is not only expanding its e-commerce channels, they also apply a complete strategy to digital marketing.

All the product and services have to be digitalized

For instance, on the CES conference in Las Vegas, L’Oreal released a patch for sun-induced skin damage – My UV Patch, helps users track real-time ultraviolet exposure damage on the skin with the help of an App. In addition, L’Oreal has also launched a mobile App called Makeup Genius. The App can help users find their own appropriate makeup. Most Chinese people are shy and they do not dare to try exaggerated makeup, with this App users can try hundreds of makeup options and share on various social platforms. In the future, L’Oreal will try to launch more service-oriented App.

-L’Oreal APP for IOS

Digital involvement into every step of decision-making

In the buying decision process, customers experience 4 steps: identifying, considering, purchasing, and sharing. L’Oreal gets involved in every step of the process. For brand awareness, they launched a video advertisement on the entire media platform of Weibo and Wechat. For the decision-making stage they issued a series of makeup tutorial videos on Youku and finally let the users use social media to share their purchasing experience. With this, the entire consumer decision-making process is digitized.

-L’Oreal official account on Weibo and Wechat

Take this case for example, in the 2015 Cannes Film Festival; L’Oreal launched a video advertisement on Wechat, where L’Oreal’s stars would post their pictures and voice message saying “I am in Cannes, will you come? ” and a link to L’Oreal’s e-commerce page. Through this event L’Oreal attracted a lot of fans and potential customers, and the brand’s social influence was digitalized.

-L’Oreal Cannes Event on Wechat

All brands on digital platforms

Based on the first two points, L’Oreal Group including Lancome, Maybelline, L’Oreal Paris and other brands, try to position themselves, as much as possible, on various digital platforms, that is, “where are the consumers, where are we”. Since, nowadays, almost all of the customers are online, L’Oreal has to be searched and discussed as much as possible by customers in order to gain more popularity in the digital world.

-L’Oreal brands on Weibo

When analyzing L’Oreal’s digital marketing strategy, it is worth noticing that this giant enterprise takes digital marketing as a key element of responding to the rising demand among beauty consumers. The O2O (online-to-offline) model gradually drives the enterprise transforming it into a new business model. Digital marketing could not only develop a new market but also help to create a new CRM (Customer Relationship Management) system for other companies. We believe in the future and Chinese digital marketing will become more and more important in the following years.

Have you learned Chinese yet?

If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

This article was edited by Andres Arroyo Olson from 2Open.

IMEX IMPULSO EXTERIOR – 2016 MADRID

The successful International Business, Investments, Products and Services Fair aimed to improve SME competitiveness; IMEX Impulso Exterior took place last April 6^th and 7^th in Madrid, at the Marriott hotel Auditorium. The main objective of the event is to promote international overseas Spanish companies and bring together well-regarded and experienced professionals in the field.

More than 90 speeches took place in many specific rooms and stands, focusing in the different relevant and necessary topics dealing with international processes, international development, and international business. Moreover, there were some gourmet brands stands in which they were offering samples of high quality products and having conversations about new international markets possibilities…

2 Open was at the event focusing on international possibilities of SME companies and, of course, paying attention to every event related to China. We attended to a presentation about the current situation in China and how to reach businesses within China and Hong Kong.

All in all, it was a very insightful event with a vast variety of companies that had a lot of things to share. In 2 Open we like to be updated when it comes to business in China in order to provide the best possible services to our clients. If you need partial or full consulting do not hesitate in contacting us, our group of specialists will happily assist you.

Business Theory and Practice in China – Not what you’d expect

Have you ever asked somebody how to do something in China and gotten an unclear or contradictory answer? Worry no more my dear reader, getting to know things before actually doing them in China is extremely difficult, here is why!

Not all questions have a vague answer to them, we are mainly focusing on business related topics, to be more specific, new business models that are being implemented, for instance, WeChat account management, DSP advertising purchases, or cross-border e-commerce are among the main ones that seem to have a variety of answers to them.

Why? You might be wondering, well, these fields are fairly new and still need to mature a bit. This is the main reason why there is no general consensus yet, it basically comes down to who you are asking. A logistics company won’t give you the same answer as the Chinese Customs Administration, nor will an online e-commerce platform or a Chinese businessperson, everyone has a different perspective on the matter, finding out what works for you might be difficult.

In reality, nobody is 100% sure on how things should be done, in fact, it seems like everybody is experimenting with it. The information lacks, is unclear, or contradictory,  so you ask yourself, what should I do in order to carry out my business in China?

Your first, and probably wisest option, would be to get in touch with 2 Open, we are used to deal with these types of problems all the time. Facing new challenges and pioneering is one our main strengths and we would be more than happy to help your business achieve its full potential.

Your second option would be to run a pilot test. Getting things right before actually starting is a smart thing to do. Try running some test orders and look at the problems that arise with its delivery process. This will not only give you the knowledge you need but will also let to know the experience you’ll be having later on. Even though this might not be as comfortable to do as it sounds, it certainly is the best way to go about it.

Apart form running this pilot test there is another important aspect you should keep in mind, that is trust. Uncertainty and risk taking are a part of these tests and having an honest trustworthy person on the other end is something that will help you solve any problems you might encounter. Trust issues within your working environment could harm the pace and results of your projects, this is something you might not want to take for granted.

All in all, trust is not enough, you also need to be patient, getting things right requires time and effort. Getting ahead of yourself without the knowledge required could costs you some precious time and money. Plan things ahead and gather all the information needed in order to succeed in the volatile Chinese market.

At 2 Open we have the experience and knowledge to develop your business in China. We not only know how solve problems but we also take that uncertainty on your behalf. Our team is passionate and enthusiastic about every project, our goal is to understand our clients business needs in order to provide the best possible services.  If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

Don’t forget to subscribe to our monthly Newsletter.

This article was edited by Andres Arroyo Olson from 2Open.

Big Data and Precise Marketing – Tips from Baidu

Nowadays everyone is talking about big data, but what exactly is big data? How can we use it to benefit our business in China?

As we all know, Baidu is the biggest, and most popular, Chinese search engine with coverage of approximately 95% of China’s population. It receives around 6 billion search queries per day. With their countless backstage data, Baidu decided to move forward into the big data area and try to convert it into a high-value business service.

Last week 2Open attended a seminar about Baidu’s big data and precision marketing. Here are some point that were discussed during the event.

What is big data?

Big data is all about predictions, math applied to large quantities of data in order to infer probabilities. The big data will provide us with the new ability to crunch a vast collection of information, analyze it instantly, and draw conclusions from it.

Big data can be used in a variety of business field: cross marketing, precision marketing, reference location, credit investigation, quantity investigation, disease prediction and travel prediction etc.

For instance, by using Baidu’s big data, we can find out the crowdedness of certain touristic attractions and the popularity of the travel itinerary in China. With the help of this data we would be able to improve our travel plans since we would be avoiding crowded destinations.

 

Big data for marketing?

In the past Baidu cooperated with a motor company (to protect the advertiser’s rights we will refer to this company as Company A).

First of all, Company A wanted to launch a new A0 level car to the market, but they had no idea what the new car’s selling point was, more importantly, how to handle the pre-marketing and publication campaign. They decided to work with Baidu and used their big data service.

Secondly, Baidu identified consumer’s emotional needs by mining social data, and exploring differentiation opportunities by scanning the perception of other competitors. With all of this data they decided to use “happiness” as the communication concept/selling point of the new car.

Finally, by studying consumer’s profiles, identifying target audiences, and understanding different age groups by analysing their lifestyle and engagement occasions. The new car’s main target audience resulted to be 23-45 males, in tier3, tier4 and tier5 instead of tier1 and tier2 cities. This turned out to be the most important consumption market.

For lifestyle occasions, Baidu chose readings, videos, movies, TV series and gaming as the main five labels for determining their target audience. Company A even designed a LOL (League Of Legends, one of the most famous online games) poster ads.

For engagement occasions, there are five stages before the final purchase. Baidu defines them as; category research, comparative study, trial, finding 4S stores, and financial plan. Then they give related suggestion to company A for every stage of the marketing strategy.

Baidu named its big data & marketing decision platform “Sinan”(http://sinan.Baidu.com/). This platform mainly provides nine functions: audience definition, brand recognition, interest insight, search behaviour, demographics, geographic, media preferences, multiple data merge, and media buying suggestion. With the help of a big data platform like this any marketing strategy will be much easier for a company.

Still wondering about how to improve your business in China? Try embracing big data now! Or… get in touch with us. Here at 2Open we are passionate about every project. Our team of specialists have the expertise and knowledge that your company needs to thrive in the Chinese market. If you have any questions or require any information about our services, please do not hesitate in contacting us, we will be more than happy to assist you.

This article was edited by Andres Arroyo Olson from 2Open.

All you need to know about Ecommerce in China

The first quarter of 2016 is already behind us, are you still figuring out how to start your e-commerce business in China? For some of us e-commerce still feels like a new business model, however, China has long passed this stage, various data suggests that it has already become a traditional industry in China. Traditional or not, let us sort out the current e-commerce situation and forecast its areas of development.

Ecommerce is on its way to become a traditional industry in China

Ten years ago the ecommerce in China was brand new. Taobao was the most popular C2C online platform. At that time, people who had the technical skills and knowledge of search engines could get over 80% of return of investment on a Taobao shop. Nowadays, Taobao offers more than 1 billion products, has over 10 million sellers, and around 320 million active users. These huge numbers only come from one of Alibaba Group’s marketplace so you might be able to reckon the whole picture. After ten years high-speed development, China’s ecommerce is not a new industry anymore; its development is now as mature as the real estate or the catering industry.

 

Traditional industry vs Ecommerce

In recent years, the traditional industry has been strongly affected by the online market, some companies have managed to adapt their business to the new online scene, but some have failed at this task. This trend of transitioning from offline to online businesses will speed up this year, and although there are currently more traditional businesses than online ones, online businesses will eventually catch up.

It seems that both business models cannot co-exist, however, if the resourceful traditional industry would explore Chinese digital marketing and ecommerce solutions, they would be able to achieve better results with half the effort.

Develop a 020 (Online-to-Offline) business model

In coming years, online retailing will be a fully integrated part of the market, it will help companies grow, and sale more efficiently. On the other hand, they will also have to implement the offline part of it, a successful integration of a good O2O business will, without a doubt, thrive in market. Suning began handling deliveries for Alibaba, in order to push Tmall Supermarket into the massive market, and Jingdong is promoting Jingdong Daojia, all the actions from the leading Ecommerce companies indicate that the O2O model is inevitable to come.

 

Ecommerce in the rural areas

 Last year ecommerce in rural areas had a rapid development. Alibaba made a long-term project to promote online shopping in order to expand its business coverage. The central government formally issued a document to help the promotion of rural ecommerce and facilitate the integration of online and offline. Alibaba, Jingdong and Suning are also pushing the development of ecommerce in rural areas so we should expect an huge increase this year.

 

Great development of CBEC (cross-border ecommerce)        

Over the past 2 years, CBEC has become one of the most popular business models in China. It has given import business a lot of opportunities; moreover, since the Chinese middle class has grown considerably (first place in the world with over 100 million), it turns out to be a very profitable business. The main consumers are people between the ages of 30-40 and have great acceptance for foreign products, this will bring a lot of overseas ecommerce companies into the Chinese market.

 

Here at 2Open we specialize in ecommerce and digital marketing. Our goal is to understand our clients business needs in order to provide the best possible services.  If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

 

This article was edited by Andres Arroyo Olson from 2Open.