The Flanders-China Chamber of Commerce organized a webinar, with the support of Flanders Investment & Trade, focussing on “Digital opportunities for marketing and sales in China” on October 11, 2022.
Ms. Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, welcomed the participants to the webinar. China has the largest and fastest growing e-commerce market in the world with almost one billion of on-line individual shoppers. It is important that Flemish companies have a well-thought China digital marketing strategy, especially one adapted to the local Chinese market. Ms. Jane Ru, Director of Growth & Operations at Crayfish.io will introduce the fundamentals of digital China, providing an insight into the digital landscape and offering tips on how to create a marketing strategy and utilize local talents for marketing and e-commerce. Jane has more than 20 years experience in strategic marketing, business development and international trade in the UK and Europe across a range of industries. Flanders Investment & Trade recently published a very interesting market study on e-commerce in China which can be downloaded from the FIT's and from our Chamber's website. Doing business with China is not easy in these times. For many of our companies the travel restrictions to China and the sudden lockdowns due to the dynamic zero-Covid policy are one of the biggest difficulties. We need to persist, as China remains an important market for our businesses.
Ms. Jane Ru, Director of Growth & Operations, Crayfish.io, said that in the past few years it has been very difficult to visit China due to the travel restrictions, but technology has made a connected world. China has developed into a digital economy on a larger scale than the West. We can engage with Chinese customers without leaving our home countries. Crayfish.io was established in the UK to help companies succeed in China, providing a portfolio of quality services. Marketing professionals need a thorough understanding of the market and the customers and how to communicate with customers digitally.
China is the world's biggest e-commerce market with a larger transaction value than all the developed countries combined. There is also a rapid growth in social and B2B commerce. The penetration rate of mobile payments is very high. About 90% of internet users are using mobile payments, accounting for 50% of global digital payments. China is also among the top investors in digital technologies, such as virtual reality, autonomous vehicles, 3D printing, drones, AI, and other new trending technologies.
The influence of digital giants in China is bigger than in other economies. They not only have massive user bases, but are also providers of cross-section digital solutions. The three big groups of tech giants are:
• BAT (Baidu, Alibaba, Tencent), the equivalent of Google, Amazon and Facebook.
• TMD (Toutiao/Douyin, Meituan, Didi), providing on-demand platform services.
• PKB (Pinduoduo, Kuaishou, Bilibili), the social commerce platforms.
Each one has developed an eco-system. Tencent for example is famous for its mobile games, but also provides a social platform, e-commerce, mobile payments, transport and travel solutions. Without leaving Tencent's eco-system, you can do almost everything.
The customers are the most important for all commercial activities. For B2B customers it is important to know who the decision makers are and the decision making process. Most Chinese consumers are digital natives, who grew up with computers, smartphones and the internet. They trust their apps and key opinion leaders (KOLs). Social interactions and leisure activities are increasingly taking place online. Social platforms are being used more than anytime in the past. Customers make purchasing decisions following the opinion of their KOLs. They are not only active on one of the platforms, but use many of them. There is an increasing middle-income class, willing to pay for quality, brand attributes and ESG. Chinese consumers get their product information searching online.
Digital B2B customers make approximately 12 online searches before making their purchase decision. They do want contact with sellers but prefer personalized experience through digital channels. Social media also play an important role in decision making. B2B customers will check reviews on social media. Companies that sell through more channels are more likely to gain market share. Customers are expecting a 24/7 digital service. Chinese B2B buyers rely even more heavily on online channels. B2B commerce has been growing at a rate of about 10% every year.
Most channels used in the West like Google, YouTube, WhatsApp, Facebook and Twitter are not accessible in China. To establish your digital presence in China you need to utilize local channels. Baidu is the No 1 search engine, but you can also search on WeChat, RED, Zhihu or Bilibili and other social platforms and on video platforms like Douyin and Kuaishou. Even carmakers are now using live-streaming to introduce new models and sell vehicles online.
If you have to choose one platform for your marketing, sales and communications, it has to be the super app WeChat. People in China spend an enormous amount of time on their mobiles, most of it on WeChat. It has a user base of 1.25 billion. The function of WeChat is a combination of all the apps used in the West, including Facebook, Whatsapp, Paypal, Amazon, and many more. It has a strong marketing and sales functionality. You can use an official WeChat account for your marketing and e-commerce. It also has an enterprise CRM function.
Zhihu is the Chinese version of Quora. Many users go to Zhihu for in-depth reviews when they need to make a purchase decision. Users leave questions and get answers. Most users are professionals in high-income groups. Little Red Book and Weibo are very well-known in China. A website is very important to provide all the information to help B2B customers understand your product. Your website should be optimized for the Chinese search engines. Baidu has over 200 million daily users and also has its own eco-system, including Baidu Zhidao (Quora) and Baidu Baike (Wikipedia).
Whether you can go to China or not, a digital strategy is a must to engage with your Chinese customers. Brand visibility is the first item. Being visible in Europe doesn't mean you are in China. Next is putting your product on most local platforms to strengthen your brand awareness in the Chinese market. The content you have already in English can be used in translation. You will also need a China marketing plan, including website localization, registering your social media accounts and start publishing content.
There are three different routes to market: direct to customers; through partners and by establishing a physical presence. The big e-commerce platforms have shifted their interface to be more Instagram-style to facilitate social content. They are doing live-streaming and customers will place their orders directly online. Social engagement has become a new normal. Social commerce has now grown to about 20% of all e-commerce. There is no clear separation between B2B and B2C. Retail e-commerce continues to grow. Social commerce and on-demand services have taken off very quickly. The virtualization of services, such as healthcare, education, real estate viewings, government services and legal advice is growing.
Some still consider finding local partners a priority. It is important to review your brand value, and research your customer profiling before making a decision who should be your Chinese partner. You will need to carry out due diligence to determine who your distributors really are and what capabilities they have to help you in the Chinese market. In such a big market, one distributor may not be able to help you succeed, so you might need several. You may also decide to set up a representative office or WFOE in China.
The Chinese market is too big to wait for the travel restrictions to be lifted. Companies that know about China's digital eco-system will be better positioned to succeed. The whole digital system has enabled us to market and sell products by establishing a digital presence.
A Q&A session concluded the webinar. Is a European brand name and trademark not more important than a Chinese one? Ms. Ru: You can register your current English trademark, but a Chinese name has more meaning and will build the connection with your Chinese customers more strongly and successfully. Chinese customers still prefer to read and purchase in their native language. A Chinese name will show your Chinese customers that you are serious about the market and better understand their needs. For example Carrefour has a very warm Chinese name “Jialefu”, which means family and happiness. The Chinese name for Coca-Cola also expresses joy to Chinese consumers.
Do you need a Chinese importer to be successful in online sales in China? Ms Ru: The answer is yes if you will have a store on one of the e-commerce platforms. You still need a Chinese partner in China, because you will need to provide services 24/7 and you need to process orders and answer your customers' questions without any disruption. Online sales means you need to run campaigns on special dates in China, such as Double Eleven and June 18. Double Eleven is an online shopping festival and is important for brands to launch new products. There will also be big discounts generating more revenue.
Email: jane@crayfish.io
Interested to learn more? Please ask the recordings of this event by sending an e-mail to: info@flanders-china.be.
