wechat Tag

Is Sina Weibo On The Way Out?

There are plenty of Social Media platforms in China: while a few achieve great success, many succumb to a highly competitive scenario.

Result of its dynamism, it is essential to keep attention on the changes that China faces in the digital world.

From 2 Open, we have prepared a brief introduction about Weibo´s current situation.

Our goal is to give you some tips to fully understand what is going on with one of the biggest Chinese Social Media.

Do not hesitate to contact us for a more thorough analysis!

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Weibo is a Social Media platform to produce, share and find out Chinese-language content.

As a leading platform, provides an easy way to express in real time and interact with people and corporations.

Its importance is not only due to its capacity to be an official/unofficial news source, but also because it allows people to express themselves in a public way.

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The doomsayers come into the picture

Currently, Alibaba is the biggest Chinese e-commerce company: it provides C2C, B2C and B2B sales services via web portals, plus electronic payment services, a shopping search engine and data-centric cloud computing services.

Three years ago, Alibaba bought 18% stock of Weibo. Since then, several media have speculated that Weibo or even Sina might be acquired by Alibaba in a short time.

Encouraged by the rise of Wechat, many marketers have predicted the fall of Weibo. Well, the latest Earnings report proves they were wrong.

 

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Is Weibo on the way out? Let the Earnings speak the truth

According to official Earnings Report of 2016 Q2 from Sina Weibo, the Net profit of 25.9 million dollars (net revenues of $ 146.9 million) increased 516% compared to the same period last year.

Moreover, Weibo 2016 Q2 data shows the Total revenue of Weibo is 146.9 million, including 127.2 million revenue from Advertising business, value-added services $ 19.7 million for value-added services.

Let’s review the users’ data on Weibo now

Monthly Active Users –MAU- is 282 million, increase 33% compared to the same period of last year. In addition, Daily Active Users –DAU- is 126 million with 36% increase compared to same period of last year.

Is noteworthy that 89% of them are mobile users.

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The progress is closely related to their own media advantage

Three years ago, relying on its social communication advantages, Weibo attracted $ 600 million of Alibaba, while became an effective channel for celebrity campaigns, events, marketing and other commercial activities.

After that, Weibo focused on the advertising model. At the end, it decided to put aside Alibaba and manage the business alone.

In 2016 Q1, advertising investment from small and medium enterprises increased 147%. The quantity of SME’s and self-service advertisers reached 830K with 25% increase compared to previous quarter.

In 2016 Q1, investment in small and medium advertising revenue grew 147%, the number of SMEs and self-service advertisers reached 830,000 and a 25% increase the previous quarter.

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Why both SMEs and big brands value Weibo a lot?

Both leverage it as an important channel frequently, specially because:

• Increase of traffic and users with 282 million MAU
• Optimized Algorithm of Ad Platform
• Active Internet Celebrities
• Live－streaming

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The outbreak of short videos

We should add that speaking of its development path, the outbreak of short videos is also a milestone of growth of Weibo.

According to the 2016 Q2 Earning report, the playback amount of short videos on Weibo has increased 200%.

Meanwhile, the Internet celebrity economy is rapidly booming. Based on short videos, live-streaming broadcast and e-commerce, Weibo occupies the core position of social media with its incredible social power.

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Margin improvement for future

The operating leverage will keep being prominent in the future. Based on the non-GAAP, the operating Margin rate of Weibo was 23.6% in the second quarter.

It is expected that the Weibo´s operating Margin rate could reach 25.2% in the third quarter, 23.4% in 2016 financial year, and 28.7% in 2017 financial year.

After seven years, Weibo proves to the world its strength and influence.

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Do you still think Weibo is on the way out?

Our Digital Marketing and Ecommerce Agency have the experience of a team dedicated to know in depth the Chinese Social Media.

If you are looking to push your sales in China, do not hesitate to contact us.

Moreover, if you are interested in receiving to your mail the latest trends of Chinese Social Media, please suscribe to our monthly Newsletter!

This article has been edited by Paula Vicuña, from 2 Open.

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.

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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.

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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.

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

1. Fill the basic information to feature your products and services. After receiving an Email activation,  configure your account.
2. Choose the most suitable account type from the two options provide for the public interaction, specified in the list below:
   

   Sell on Wechat

    

3. 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

1. 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.
2. You can create a new account or logo in your Wechat official account.
3. Input your phone number to bond with the account, and the app will send a code to your phone to pass the SMS verification.
4. Use the red-button to fully use the app
5. Bind with your Bank-card to paying and collecting operations
6. To set up your products, click on “My Products” and upload your product.
7. 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.

Fourth, The final presentation to your Wechat account:

1. Click the Bottom Menu (only in case you enjoy a verified account!)
   

   Sell on Wechat

    

2. 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.

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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.

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

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.

What you need to know about Cross-Border ecommerce for China

Nowadays cross-border ecommerce is in the rise in China. It seems to be a viable and legal way to import or export products into or out of China avoiding significant tariffs and quotas. Apart from the traditional model of cross-border ecommerce, that is, overseas online shopping, we have classified 4 specific operational models of cross-border ecommerce according to their different business schemes.

 

1. Overseas online shopping
2. Direct delivery platform
3. Self-support B2C model
4. Guide and rebate shopping model

1. Overseas online shopping

Overseas online shopping is perhaps the one that is most familiar to Chinese consumers. It is a sort of procurement service for people who want to buy the overseas products. Consumers purchase the products from foreign retailers or individuals on web pages or mobile apps, and then they get the product by transnational logistics. There are two major ways so accomplish this.

Online shopping platforms

One of the main points an online shopping platform has to do is to attract third-party sellers who meet the logistics requirements. Sellers settled in the platform usually have overseas purchasing power; they regularly purchase the specific product based on consumers’ needs and after the order is received from the customer they transport or mail the product directly to China. This is a typical example of a C2C model, the online platform profits from access fees, add-value services, and transaction fees imposed to the seller.

 

Representative platforms: G.TAOBAO.COM/JD WORLDWIDE/USASHOPCN.COM

 

Wechat “moments”

 

“Moments” in Wechat is becoming a popular way for promoting products online. Although its warranty is mostly based on social relationships, fraud could also occur. With customs restrictions the service would be regarded as smuggling, so there still time to wait for the integration of it in the overseas online shopping environment.

 

2. Direct delivery platform

Direct delivery platform, also named “dropshipping”, is a model in which the ecommerce platform sends the order from the customer to the manufacturer or wholesale directly, then the latter delivers the product to the customer according to the information provided, it is important to notice that the product is sold with its retail price. Because the end-supplier is the brand vendor/factory, this model could be considered a B2C model. In this case, most of the profit for the direct delivery platform comes from the price difference between the retail price and the wholesale price.

 

Representative platforms: TMALL.HK/YMATOU.COM/KJT.COM

3. Self-support B2C model

When it comes to the self-support B2C model, most products need to be prepared by the online platform before shipping. There are two types of self-support B2C platforms:

Comprehensive self-support B2C platform

For now the only leading comprehensive self-support B2C platform is YHD.COM, which is supported by Amazon and Wal-Mart.

Vertical self-support B2C platform

This model means that the platform focuses more on a certain area to choose the product category, such as food, luxury product, cosmetic or clothing.

 

Representative platforms: WOMAI.COM/MIA.COM/SASA.COM

 

4. Guide and rebate shopping model

For a simpler understanding we will split this topic into two parts, the conduction part and the transactional part. Conduction refers to all the means and channels through which customers are led to the product or service: news, online forums, blogs, or ads, all constitute a part of conduction and focus on attracting the consumer. As for the transactional part it involves the submission of the order to an overseas retailer and any monetarily transaction that comes with it.

In order to guarantee product quality and adequacy, this types of platforms usually cooperate with an overseas ecommerce group. Normally the guiding/rebating platform in China joins their pages with the overseas ecommerce pages and once the transaction is done, the overseas ecommerce gives about 5%-15% commission rebate to the Chinese platform. Later the guiding/rebating platform refunds part of the commission to the customer.

One of the main advantages of this model is that the integration of new products and the development of the business itself are relatively simple. Also, because it is a joint between two online platforms, the conduction part results more rewarding since both parties can attract a huge number of customers in a short amount of time and meet the customers’ demands.

As for the disadvantages, long-term projects might be a bit more difficult to carry out since the business depends on two separate ecommerce platforms. Management of the supply chain could also become a problem due to distance and time zone differences.

 

Representative platforms: ETAO.COM/HAITAOCHENG.COM/123HAITAO.COM

Cross-border negotiations seem to bring a lot of advantages if one is intending to do business with China. Choosing the right model for your business’ needs is crucial for the growth and success of it. Here at 2Open we have plenty of experience with these types of business models and our team of specialists will be more than happy to assist you with any enquiry that you might have.

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.

The commercialization of Wechat. User experience or profit?

January 11, 2016, Zhang Xiaolong, the man behind the curtain of the Wechat Empire, who had never given a public speech before, stepped onto the stage of Wechat Open Class and shared his opinion on Wechat’s values. The fact that Zhang stood out at this moment is a symbol of the crucial timing of Wechat’s commercialization.

Wechat has now approximately 650 million users; the process of monetization has never stopped in its five years’ existence. Long have begun the business services, such as Wechat payment, shopping, taxi ordering service, etc.

In his public speech, Mr. Zhang shared some of his concerns about the future of the Chinese IM giant. He said:

“Wechat Public Platform seems like a media platform, but we prefer the Public Platform to be more than that, we want to focus more on the developers and that is our goal for 2016. Where does this need come from? We found out that more and more start-ups initiate with a Wechat Offical Account instead of developing a mobile application because the latter costs way too much. A Wechat Official Account could achieve almost the same things but more cost-effectively.”

“It was not our intention to become a media platform, we have always wanted to build a platform to provide services,” Zhang said, “that is why we even created a Service Account in Wechat, but it has not quite met our requirements. Now we are developing a new form: Application Account. We hope that with this new form of Public Account, when users follow it, it will be as if they had just installed an application. This Application Account will be in silence mode for most of the time but when users need it; they will easily find it in the app. By doing this, we grant a lot of apps a lighter existing form and simplicity.”

The leader of Wechat also expressed a more strict regulation for commercial activities in Wechat “There will be more restrictions for marketing events in Wechat Moments, because meaningless content will take up users’ time. The same goes for other functions of Wechat, we hope that there is as little information as possible in Wechat, so that the users can focus on their tasks and finish them effectively.”

After trying to make money with advertisements, Zhang said that he wanted the commercialization of Wechat to be invisible and not a disturbing process based on monetizing of traffic.

One possible reason for the creation of the Application Account is that the current Service and Subscription accounts have impaired the users’ experience. Being buried in numerous and complicated piles of information distracts the users from their goals.

How to balance user experience and commercialization?

This is not a new challenge, and not just for Wechat, social platforms like Facebook, Twitter and Instagram, who already have a mature advertising model based on information flow, come across the same problem every time they try to launch new product for advertising. Unfortunately, there is no existing remedy for this headache.

At the moment, ads in Moments follow several basic rules: if users opt out or just leave it there, the possibility that this ad appears in your friends’ time-line is only 20%. The percentage will rise to 95% if you click, like or comment on it.

Each ad will be able to circulate for seven days, while every single user will only receive one ad within 48 hours. An ad with no likes or comments will be removed within six hours.

We have discussed a lot about the commercialization of Wechat, but is there a possibility that the commercialization of Wechat is not limited by the current models? Could it be possible that the commercialization of Wechat is outside of Wechat?

To understand this, we need to know some fundamental values of Wechat.

• Wechat provides us an essential ID in the era of Mobile Internet – a Wechat account. We use it to keep track of our life and business organizations use it to find us. Before Wechat, the cellphone number was the most important ID, or even earlier we had our e-mail address.
• Wechat has created Public Accounts, this not only solves the problem of digital identity for offline businesses, but also enables a new communication model: one user to many users information exchange, interactive feedback, rich media and mobilization.
• It provides the information flow the highest degree of freedom. We can contact our friends quickly and conveniently by sending messages, sharing information in Moments or through a group chat. All of this has created conditions for a more dynamic flow of money and information.

• This value is still yet unclear however, it would be an important one. Wechat could use Wechat Accounts to locate users and Public Accounts to locate businesses, accumulating trading data between users and businesses so that they could create a “Cloud of consumption”. Based on this cloud, Wechat may provide services like memberships to users or CRM to businesses.

 

In a word, the commercialization of Wechat is based on output and monetization of these four fundamental values instead of the commercialization of the Wechat as a mobile application itself.

 

What do you think?

Let us know.

This article was edited by Andres Arroyo from 2Open.

References:

http://www.vvjia.com/article/20151008153623

http://www.99eo.com/info.php?id=8272

http://www.meihua.info/a/65851

http://www.meihua.info/a/65896

http://technode.com/2015/08/24/wechat-ad-moments/

http://money.163.com/16/0116/08/BDEJ2N8J00253G87.html

http://www.tmtpost.com/499621.html

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