How to Acquire Chinese Tourists through Digital Marketing
It is almost August and tourists are everywhere. From 2 OPEN we are pleased to give you some basic steps to acquire Chinese Tourists through Digital Marketing.
Since 2013, the number of Chinese outbound travel population and tourism consumption both already ranked the world’s first.
In the next few years, Chinese outbound tourism consumption market will continue to maintain high growth speed: 174 million Chinese people will choose to travel abroad, and the amount of consumption will be around 264 billion US dollars in the year 2019 by estimation.
Chinese tourists has become the “cash cow” of global travel industry
This prosperity is due to the increase of urban population and disposable income, the rise of the middle class, RMB appreciation, the gradually liberal visa policy and the increase of international flight routes have given rise to the empowerment of as a yet undeveloped sector.
What kind of travel products do Chinese tourist usually choose when travelling?
When travelling, Chinese tourists mainly choose to travel with tour guide, both group package and/or flight + hotel. Even if travelling without guidance is still scarcely used, it is a fast leading trend and a great opportunity of future.
Which Channels do Chinese tourism use to purchase travel products?
Even if traditional travel agencies are still the most popular, every day more Chinese opt to book though Online travel agencies, such as Ctrip and Qunar. It is highly likely that its importance grow each year.
How Chinese travelers spread their feeling about their country-destination?
The consumption of Social Networks in China is massive. Either through posts or instant messaging, the power of “Word of Mouth” is overwhelming.
Wechat and Weibo play a very important role in choosing destinations for Chinese people.
From 2 Open, we suggest you paying attention to online platforms in any plan to approach the Chinese market.
Which channels do Chinese people use to search touristic-information?
Either through an Agency´s Website or through Social Media, Chinese travelers love using new technologies to discover places, compare tariffs and share their experiences abroad.
Once again, the power of the main Social Media Platforms in China –Wechat and Weibo– is increasing each year.
What do Chinese travelers suggest for information channel?
The most expected information search channel for Chinese travelers is to set up Chinese official website, followed by WeChat and Weibo Chinese accounts set-up.
So, What can you do to attract more potential Chinese tourist to your destination?
From 2 OPEN we suggest you some ideas before starting your approach to China:
- Build a Website:
To set up a Chinese Website, this must be hosted in China (-cn domain). It would be necessary to make it consistent with Chinese search engine´s standards and be entirely written in Mandarin.
From 2 OPEN we strongly suggest you to take advantage of new technologies –Big Data- to improve the user experience and target the right audience.
- Search and Display Marketing:
Baidu, the biggest Chinese search engine, is essential on any approach to Chinese digital market. Your site should be well-ranged on Baidu´s search engine to let Chinese tourist find you.
In 2 OPEN we have the expertise to deal with SEO or SEM campaigns, in order to help you to gain visibility and target potential customers.
- Social Media:
Social networks are the most used channels in China. Try to attract users to your official accounts –WeChat and Weibo– by posting travel news and proposals to people. Start your Social Media plan with our help!
- Key Opinion Leader:
To build a proper networking with Key Opinion Leaders on Social Networks can make the difference in China, and they are a very effective way to promote products and services.
- Cooperate with a third-party agency:
Online Travel Agencies -like Ctrip– provide a package of services include tickets, hotel, tourism products and car rental etc. Cooperate with them will bring you huge traffic and a great chance to sell. In addition, Online Travel Agencies let customers interact each other about trips, top destinations and advices.
From 2 Open, we encourage you to take an advantage of their social marketing impact by improving your content marketing.
- O2O:
In last year, China tourism O2O industry achieved great improvement. The relationship between resources and platforms become closer under the impetus of capital. Wheather through Online platform + offline resource or Online channel + offline channel, both can make the difference.
- Offline Event and Public Relations:
Traditional offline advertisement promotion can be useful in China, but very expensive. Combine Online and Offline Marketing can be the top-solution for your company.
We hope this information has been valuable and helpful to you, and we encourage you to start your approach to the huge Chinese tourism market. With our help, your company could take the great advantage online marketing offers!
Have a look to our services!
This article was edited by Paula Vicuña, from 2 OPEN.
Tencent and JD Launch Targeted Brand Advertising on WeChat
From the association of Tencent –owner of the biggest social platforms in China- and JD.com –the leading online direct sales company in the country-, has emerged a new conception of Marketing and Brand Advertising.
In 2016 in Beijing, both released a plan based on Ecommerce marketing service called “J&T Plan”.
The new policy was aimed to provide a tool to accurate a better portrait of the potential user, and improve the interaction with the consumer.
As a result, users data has become extremely valuable for any company:
Knowledge is power, more than ever.
What are their main Goals?
The aspiration of Tencent and JD.com partnership has been to provide a pleasant and high quality service to their users.
To reach its purpose, they have focused on three main objectives to strength its business on mobile and Internet, such as:
- Mobile access points
- Traffic support
- Ecommerce activities
Their desire to turn the user into the protagonist of the new Marketing, has launched a new approach based on three main ideas:
- Multi-dimensional user insight
- Effectiveness analysis
- Precision target audience
What do they want in Return?
Not only a commitment to the future and an advantage over its competitors, their relationship also give them some specific advantages:
JD.com obtains a stake in Yixun, PaiPai C2C marketplace businesses, logistics personnel and assets and QQ Wanggou B2C.
On the other hand, Tencent will offer level one access points in Weixin and Mobile QQ and support from other key platforms to JD.com.
In order to provide a better online shopping experience, they will also work together on providing solutions to online payment services and an overall digital marketing solutions.
If you are thinking on improving your company services, before starting a Business and Marketing Plan you should take in consideration some basic recomendations:
Build a well-aimed portrait of the users, improve brand experience with the client, and enhance technological tools to achieve it, have become the three key factors to consider on any approach to potential customers, and the best guarantee for the future of your company.
From 2 OPEN we have conformed a team capable of responding to new challenges and specialized on Business Intelligence. We can help you to deal with the new Marketing and Ecommerce trends.
Come with us. Together we will reach your company goals.
This article was edited by Paula Vicuña from 2 OPEN.
How to optimize traffic within 1688.COM to obtain leads?
Interested in the B2B market? This article is for those currently interested in launching a B2B ecommerce initiative!
Following our instruction of How to Sell B2B Online in China, from 2 OPEN we will guide you on the most famous Chinese B2B platform –1688.COM, to obtain leads for your company, giving you the basic information to learn how to deal with traffic.
In order to develop your sales in a business-to-business, it is important to analyze which actions can be done to improve your company results.
From 2 Open, we have listed for you some of the key-factors to make it easier your landing on B2B. With our help, your company will take a huge advantage of this big chance on Chinese market!
WHAT IS 1688.COM?
Alibaba is currently the biggest Chinese eCommerce company. It dominates the Chinese online marketing in various aspects and includes on its services: online transactions, payments, promotion, service and communication.
In order to focus on B2B market, Alibaba created a portal for domestic B2B trade in China, 1688.COM. In 2013, 1688.COM launched a direct channel that is responsible for $30 million in daily transaction value.
After 14 years development, now Alibaba leads B2B into the full digitalization in China and it is responsible of the great revolution B2B has experienced in China.
HOW TO USE 1688.COM?
As the domestic B2B portal in China, 1688.COM has millions of vendors but does not support English version for foreign users.
In order to improve your position and make you easier, from 2 OPEN we will give you the specific information of acquiring traffic within 1688.COM.
To provide an accurate sketch for you and due to its importance, we have chosen Solostocks as the example below:
- First, Go to the homepage of 1688.COM:
- Second, Create Solostocks’s online shop in 1688.COM
After the registration, you can access it with Solostocks.1688.com.
- Third, Optimization:
When the online shop settles down, we can optimize the traffic through strategies within Solostocks.1688.com. The internal optimization of the online shop could bring your company more traffics and leads.
From 2 OPEN, we suggest you six strategies to apply to leads generation, such as:
- Product release:
In proper way, product release can fulfill the product category and increase Page View (PV).
Product quantity is not the key point for B2B selling but is the product category, title and description. Remember the more detailed the information is, the more opportunities for searching there will be.
- Shop decoration:
Shop decoration is aiming to provide a good visibility to viewers: useful information in organization will fully convey to viewers and improve the CTR also display structure has to be recognizable and practical.
Key modules include logo, navigation, introduction, display, share/favorite, communication etc.
- Text content:
Text content includes all the product descriptions and introductions.
It is crucial to pay attention to Key-words combination: they will be the best SEO to boost traffics: the more key words are recorded, more exposures there will be.
Refined and targeted content can also lift the ranking and improve the user experience.
- Tool assistance:
Tool assistance from 1688.COM’s back office can facilitate Solostocks.1688.com promotion. It contains various functions to assist the system management, which provides a better performance in internal optimization.
Tools for managing product, KPI, finance, transaction and marketing would optimize the operation.
Here we explain you three detailed functions which we consider especially important:
By the way, there are a plenty other tools provided by 1688.COM that you can find. You just need to discover them all and find the one which better suits you!
- Secondary platform:
The secondary platform of 1688.COM is called baike.1688.com. It is professional and dedicated to provide customers the solutions and commercial knowledge in business by means of questions and answers to solve business problems.
In this business platform, users can get connections and share their experiences. Do not forget to:
– Use proper key words to find out the related questions
– Answer professionally to promote Solostocks.1688.com
– Enhance the account activity and develop the business
- Paid service:
Paid service in 1688.COM can effectively promote the brand and product in bidding ranking.
The most popular ways of SEM in 1688.COM are WXB (pay-per-click) and Diamond Booth (slideshow on the homepage). Both of them strongly facilitate the brand and product promotion in direct way.
Actually, 1688.COM provides various means for sellers to promote its sales. Here we summarize some main tips to implement the internal optimization in a comprehensive way to obtain the best results!
- Information sufficiency
Make sure the sufficient and high quality information can be provided to browsers.
- Effective transmission
Transfer the product or brand information in all directions to browsers accurately and immediately.
- Qualified images
High definition pictures can highlight the brand quality also beatify the online shop.
- Customer service
Keep the effective communication and CRM during the whole sales process.
- Ranking optimization
Paid service can provide the better performance in brand exposure by bidding ranking.
If you are interesting in doing B2B in China through a more native approach, 1688.COM would be the most effective and direct way to help you face to the Chinese customers.
Still interested?
Keep checking our blog and contact us if you have any questions. 2 OPEN will happily assist you!
This article was edited by Paula Vicuña.
How to Sell on Wechat?
Interested on learning how to sell on Wechat? Keep reading!
On 20 April 2015, China Press and Publication Academy launched their first report based on Wechat platform. With over 600 million potential customers, the Report showed the great potential Wechat has for Brands to reach new audiences in Chinese market.
WeChat is one of the most important Social Media platforms in China. Set out as a communication tool, its newest strategy has been launching the most successful mobile eCommerce platform nowadays.
For foreign companies willing to sell in China, take advantage of the benefits of using Wechat gives them the chance to enjoy its simple access to products by an easy way to pay, and also get advanced information of their customers. Its latest movements have become the app in a crucial tool to increase the consumer communication with brands and users engagement.
In order to continue adding value to our customers and launch a profitable business in China, we encourage you to go deeper on Wechat to take advantage of every opportunity that pops up in China environment.
What are the specific requirements to introduce a company on Wechat?
First, Create your Wechat Official Account:
Due to legal regulations, bear in mind that only Registered Companies in China are allowed to create their own Brand pages. Do not forget that in 2 OPEN we are authorized to apply for it!
Some are the steps you should be aware to create the account
- Fill the basic information to feature your products and services. After receiving an Email activation, configure your account.
- Choose the most suitable account type from the two options provide for the public interaction, specified in the list below:
Sell on Wechat
- Once you are successfully registered, Wechat gives your company the chance to get more benefits and some interesting advantages to add value to your shop, like:
- Exclusive identifier
- Practical port
- Customized menu
- Account authenticity and security
Sell on Wechat
Second, Third platform registration:
Although Wechat has its own shop, set one up via a third party platform can provide many interesting features, like:
- It is free and easy to add new items
- Gives the One-click sharing
- Contributes to faster transactions and better security on them
- Download a Mobile Ecommerce platform app according to your demands: To illustrate the post and due to the great importance of Weidan in China (微店), we will focus on it. Baked by Tencent, Weidan is based on social relationships with no centralized entry-point. It gives you the chance to post your products information across a wide variety of Social Media platforms with an ultra-streamlined registration and administration processes which make it easier to sell your services and products.
- You can create a new account or logo in your Wechat official account.
- Input your phone number to bond with the account, and the app will send a code to your phone to pass the SMS verification.
- Use the red-button to fully use the app
- Bind with your Bank-card to paying and collecting operations
- To set up your products, click on “My Products” and upload your product.
- Add pictures and fill the description, price and requirements of your products or services.
Third, Link Weidian with your Wechat Official Account:
From the back office, go to Customize Menu to edit the content in structure.
Sell on Wechat
Fourth, The final presentation to your Wechat account:
- Click the Bottom Menu (only in case you enjoy a verified account!)
Sell on Wechat
- To get into the shop, you do reply the message. In latest version, when users enter the official account, an automatic message will present the options to follow the instruction to transfer into the Shop page.
And…done!
From the team we hope these tips will help you to understand further the latest trends in Chinese market.
At 2 Open we have the experience and knowledge to develop your business in China and become your guide to launch your business in Asia.
Still speculating about how to grow your business in China?
Get in touch with us!
This article was edited by Paula Vicuña 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.
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 for your Chinese Landing Page
Landing pages have become more and more relevant over the past few years. With an increase in brand awareness and persuading power, they play a huge roll when it comes to online marketing and ecommerce. This article will focus on the basic structure of a successful landing page as the improvements that can be made to achieve better results.
What is a landing page?
Landing pages are often called guide pages, in general terms, a landing page is the first page that appears when a user enters a website, this could be either the homepage, product page, about us page etc. The channels through which the user enters the website are in most cases clicks on advertisements or results or search engines. There are a few things a landing page has to achieve and although it depends on its business scope, their aims can be simplified in the following way:
-Invite users to keep visiting
-Lead users to make a purchase
-Get users’ personal information
-Invite users to share or to comment
-Other activities, which can bring interactions, etc.
What does a landing page consist of?
Usually a landing page consists on 4 main parts:
- USP (Unique Selling Proposition)
- Core media
- Detail explanation
- CTA (Call-To-Action)
- USP (Unique Selling Proposition)
This is what we call “selling point”. In China, a lot of companies consider this as their core competence. It is a way of distinguishing yourself from other competitors; this is where a company presents its most attractive features about the products or the services it provides. It should basically answer the question: Why should consumers hire my services or purchase my products instead of the others in the market?The main headline of the landing page is also of great importance. It should be a sentence that explains your USP and it should attract the users’ attention. It is basically the first thing users read when they arrive in your landing page so therefore it must be concise and catchy.
- Core media
Media has been used to enrich a landing page, making a page more attractive through the use of pictures and videos or animations.When people are watching a webpage, an interesting picture or video can leave a better impression than a sentence.
- Detail explanation
This is a main part of your landing page. Here you need to put more detailed information to support your USP. It could be points that further explain in a more detailed way the main value proposition of your service or product. It could also include advantages of what your are providing the customer as well as useful real life examples that will continue to support your USP.
- CTA (Call-To-Action)
This is the deal-sealing part of your landing page. It should not be difficult for a customer to complete the purchase of the service or product at any given moment whilst he/she is viewing your landing page. It does not matter if it is a button, a link, or a form; you just have to make sure that it is obvious and eye-catching. Users must know exactly what they are doing on your webpage and all the relevant information that comes with it, both monetarily and logistically.
To sum up
We might take for granted the elements of landing pages, consumers do not really notice all of the work that has been put into a webpage, but as long as you would like to have a successful one, you should pay better attention to these details and think on creative ways to improve them. Nobody starts from the top, so why not give it a try and see how a good landing page can benefit your business?
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.
References:
Online to Offline (O2O) in China
E-commerce has grown internationally over the past few years; China is one of the countries with the fastest e-commerce growing market, Alibaba has become the largest business-to-business (B2B) platform in the world. Tmall is the largest business-to-customer (B2C) website in Asia, with more than 90 billion RMB in revenue recorded on Nov 11, 2015(China’s “Singles Day”). Despite their success, return rates have also grown accordingly. Compared with offline physical shops purchases, online shops experience a higher rate of refunds and exchanges. The lack of the buyer experience is perhaps the biggest weakness of e-commerce, that is the main reason why the online to offline (O2O) business strategy was created.
O2O is a business model where companies attract potential buyers to their physical stores through online marketing strategies. These strategies often consist in in-store pick up of items purchased online as well as offering the option of buying or experiencing the items directly at the store.
Fast moving consumer goods do not really have to offer the buyer experience since they are expected to sell quickly and for a low price, this is the main reason why O2O does not really suit this field. Durable consumer goods, like clothing, seem to have a huge potential, they are probably the best candidates for the implementation of O2. Let us say, for instance, that you would like to buy a new camera, you compare all the features of several models online, experience them in physical shops and then after you finally decided the model, you would simply place order online for a reasonable price. Everything fits perfectly. There has been an ongoing talk about this for years, Manufacturers know this, they would like to see this, but unfortunately results are not ideal.
Why is it so difficult for O2O commerce to evolve? Who has the advantages to start implementing an O2O business model? Should large Manufacturers, like those who own multiple shops, implement it? Should offline chain shops do it? Logistics companies? Online platforms? These are questions that have to be discussed. Let us talk about these one by one.
Most Manufacturers with lots of physical shops operate offline, they usually carry out the traditional business scheme; they manage shops and focus resources on shops rather than the end users. Very few manufacturers have their own Customer Relationship Management (CRM) system for consumers, and even when they do, what happens to the employees at the shops? Sales volumes usually measure commissions and performance for employees, however with an O2O business model it makes it harder for manufacturers to keep track of their physical shops and employees performance. No companies have solutions for this, so employees in physical shops resist O2O, so for manufactures O2O is harder to be executed.
In the case of offline chain shops, employees manage products rather than sell them directly, and they have CRM systems for most of the consumers. The real problems these companies face is related to online traffic, do their offline consumers also have the habit of buying online? Even if they do, do they know the chain shops started an online business? Despite the attractiveness of implementing a fully online business, they are still more likely to succeed with a O2O business model. Suning is a real life example of this, with thousands of offline physical shops of household appliances, also expanding its categories one store at a time, and being the third in the Chinese E-commerce field. Their market share is a little more than 3%, far behind the first two companies, O2O is the trend but there is still a long way to go.
What about Logistics companies? Logistics means warehouses and more detailed consumer data; this is the main advantage here. SF-express started Hi-ke in 2014; the goal was to steal market shares from online platforms like Tmall and JD with SF-express’ logistics. This resulted in a lack of experience for consumers and complex order placing procedures.
Online platforms should also implement O2O for one reason, to keep the current e-commerce market share. Tmall and JD just started this; we will have to wait to see how it works out. Their weakness is still the lack of physical shop operation experiences.
O2O needs someone who can successfully implement the business model, in China currently there has been no one who had manage to do this, it seems that what the market needs is a pioneer in this field, future is bright, and the market gap is there, let us wait and see who will rise up.
This article was edited by Andres Arroyo Olson from 2Open.
7 Facts You Need to Know About The Chinese Online Market
1. The Chinese online ecosystem is shaped by the actions of the B.A.T.
The B.A.T. is a group consisting of Baidu, Alibaba and Tencent. They are the dominant players in the Chinese online ecosystem. The dynamics of their competition and cooperation defines the boundary and possibilities of digital marketing and ecommerce in China. Each member of the B.A.T. dominates important segments of the online ecosystem: Baidu dominates the search engine market; Tencent is strong in social media, and Alibaba fiercely rules ecommerce. The results of this competition can provide inconveniences for online marketers. Baidu, for instance, is reluctant to direct search traffic to Tmall stores and pages, where in some cases a company will need special permission from Baidu to promote Tmall stores using Baidu’s Search Engine Marketing (SEM).
2. Baidu’s dominance in the search market
Baidu’s dominance in the Chinese search market means that most search engine related marketing activities requires the cooperation of Baidu to work. Baidu’s Search Engine Optimization (SEO) is different from Google’s SEO. Baidu still requires Meta data for proper indexing and it prioritizes loading speed quite heavily. Setting up SEM accounts with Baidu can either be an easy task that lasts for several working days or an excruciatingly slow and cumbersome process, which might take months to complete. This depends on the involved company’s policy match with Baidu’s requirements. There is also a minimum investment requirement for setting up an account. These can range from as low as 6,000 RMB to as much as 500,000 RMB depending on the type of account that is being opened. One of the most important aspects of Baidu’s listing is the absence of brand protection. This means that brand keywords can be bought by any paying parties willing to buy them. This might lead to unfair price based competition between official suppliers and the unofficial ones, or even from someone that sells fake products through proper channels.
3. Wechat is not just a messaging app; it is a lifestyle app that defines online interaction in China
It is hard not to know about Whatsapp, Facebook, Twitter or Instagram in 2016, yet many are not familiar with Wechat if they live outside of China. Many foreigners regard Wechat as a Chinese version of Whatsapp but it is far from just a messaging app. To be more precise, Wechat combines the function of many known social media sites and utility apps. Users can chat, post their photos, sell items, make online payments, book a ride, buy transportation tickets, invest their money, and more. In addition to being used as a private app, it’s becoming more and more popular in the work place, mainly used for communications. With so many diverse functions and over 600 million registered users, marketers naturally want to use Wechat as a channel to communicate to their target audience. Wechat offers the possibility of a one on one customer service; creating customized functions to improve the brand experience. However, with the Wechat craze comes the high costs of Wechat marketing. Posting merketing content on a big account with upwards of 100,000 followers can cost as much as 80,000 RMB.
4. The Chinese consumer has embraced ecommerce faster than most markets
The rise of ecommerce in China surprised many outside observers. Many consumers born in the 80’s and 90’s have fully embraced the concept of ecommerce as the main way to purchase items. Anything from daily necessities to premium products can be purchased. The Chinese consumer responds well to online promotions and acceptance of new brands, however, most of them are still price sensitive. Foreign brands selling in the Chinese market to the Chinese consumer are less likely to be successful offline due to the high cost of real estate. Platforms such as Tmall and Jing Dong and vertical e-store are the best way to sell to consumers in China. Ecommerce events such as 11.11 are already a cultural phenomenon in China where the total transactions can be above 11 billion USD in one day.
5. China has one of the most highly regulated online environments in the world
China is one of the fastest growing online markets yet it is one of the most regulated ones. Traffic data going in and out of the country is heavily censored and is significantly slower than domestic traffic. This means that local hosting might be necessary for optimum speed. To publish a website, a company is required to obtain the Internet Content Provider (ICP) license to publish any content online. China has a very strict advertising law. Multinationals are regularly hit with fines for violating the law and some fines can go up to 100 million RMB. It is critical to study the proper regulations and laws before entering the Chinese market to prevent future risks and losses.
6. Mobile is not the future; it’s already the dominant traffic in China
In recent years, PC traffic has been decreasing 15% every year, whereas mobile traffic has been increasing as much as 20% in the same time frame. Many online retailers are reporting that most buyers are using their mobile phones to buy items online. Conversion for mobile traffic is also higher than PC traffic in many cases. This is due to the high penetration rate of smartphones as well as user reliance on mobile devices for online payments. It is easier for users to pay online with mobile phones than it is with their PC. Traditionally, consumers would use their PC to do extensive research before buying online. However, with improved mobile connectivity and mobile optimized websites, many consumers are abandoning PC and in some cases only uses PC for work related activities. The pay-per-click for mobile traffic can create as much as 300% higher than PC traffic in some industries, mainly due to limited advertising space and high demand.
7. Local content through local perspective
The Chinese market is still flooded with marketing contents that are just a direct translation from their original language. Some branding videos of multinational companies do not have Chinese voice-overs, only Chinese subtitles. While these contents do not necessarily fail to communicate their intended message, most have drastically reduced their effectiveness and recall rate due to being less relevant. In order to communicate effectively, companies need to dig deep to find relevant messages and hire local content producers as a bridge to effectively communicate to their Chinese consumers. This is especially relevant when publishing materials online, where the Chinese consumer expects instant gratification, not a bad translation.
This article was edited by Andres Arroyo Olson from 2Open.
General situation of fake products in China
It is common knowledge that fake products are everywhere in China, from large cities like Shanghai to remote small towns in Western China and, not surprisingly, online markets are not the exception, even though there is a lack of acknowledgment from their part, it seems that fake products are a part of China whether we like it or not.
The online market giant Alibaba group was sued in the U.S. regarding fake products regulations. According to Jack Ma, the founder of Alibaba, his company spends over one hundred million RMB each year on actions against counterfeit goods. The situation has improved considerately over the past few years, some shops have even been closed down due to this sort of issues. 2Open, as a company who deals everyday with marketing and e-commerce, is used to supervise online sales in China for many clients and the number of shops selling a certain brand with an unbelievably lower price has decreased noticeably in comparison with last year. There is still a lot of work to do, but exactly what types of products are more likely to be faked?
SHENZHEN, CHINA – AUGUST 04: (CHINA OUT) Police officers deal with fake brand-name items at a shop on August 4, 2014 in Shenzhen, China. Shenzhen police seized a large number of fake brand-name items, like Hermes, Gucci, Rolex, Chanel, Prada, Miumiu, and so on, worth 5,000,000 yuan (810,000 USD). (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
The most common faked goods are well-known brands, such as Nike, Adidas, Louis Vuitton, Gucci, etc. If a new brand wants to enter China, it will seldom encounter issues regarding fake products. In this situation, just a small budget is needed for online marketing which could be used for setting up a shop on www.taobao.com, putting online Ads or even buying key words on search engines, all of which can have a positive effect and lead buyers to get to know your brand. Since you are the shop owner and the only supplier at this moment, the buyer will come to you directly; no other shops will take potential buyers from you.
Let us say your brand successfully entered the Chinese market, perhaps one day someone will start faking and selling your products, but how would this affect your brand? Some argue that this is just indicator of the success and popularity that your product has had in the Chinese market and that there are no reasons to be worried. Experts agree that there is plenty of space in the market for both parties; a lot of people prefer to buy original products for a higher price than fake ones for a lower one. Counterfeiting could be considered a promotion activity for a brand, after all, if you are confident about your products, put money into marketing, let people know about it, you will get money back, no doubts about it, but how is the future looking for fake goods?
According to Xinhuanet, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) has gathered around four giant e-commerce platforms: Alibaba, Jingdong, Suning, Yihaodian to sign a cooperation agreement which will help to release inspection results of the fulfillment of product quality commitment. AQSIQ has developed a search platform of inspection of product quality, which will be put online for public use around March 15, 2016.
Fake products problems continue to plague the development of e-commerce. Jingdong and Alibaba have been fighting a war these days, accusing each other of not making efforts to end the fake goods. The offline scene does not look very bright either, street shops are now going through a rough time these days, people are getting used to purchase everything online, from groceries to electronics, during the singles day alone (Nov. 11, 2015) Taobao reached a sales volume of 91,217,017,615 RMB.
It is an Internet Era, no doubt about it, and counterfeit goods should not represent any obstacle if one should intent entering the Chinese market. A smart digital marketing strategy, like the one 2Open offers, can get your brand the recognition it deserves.
Let us know what you think in the comments below.
This article was edited by Andres Arroyo from 2Open.