I recently spoke at the China Connect conference in Paris with Yan Lee, our company’s product chief on connecting advertisers worldwide with Chinese consumers. China Connect is one of Europe's largest industry gatherings on Chinese consumer trends.
As Yan had put it in his session, “It’s important for international brands to understand and decode the digital media landscape in China before they can connect effectively and precisely to their target audience in the market.”
Albeit the incredibly fragmented digital landscape in China, effective audience buying is indeed possible for international players through programmatic cross-channel targeting via a unified data platform, and this is the only efficient way to cut through the noise.
So what do we mean by understanding and decoding China’s digital landscape? Here you go with some noteworthy insights:
1. Understanding China: The complex digital media landscape and strong prevalence of digital content consumption
Everyone knows China has a complex and fragmented digital media landscape, in which there are a lot of players of various sizes and nature that operate on different platforms and channels. For instance, if you’re asked about the key video players in the western markets, YouTube and Netflix would be the no-brainer answer. Yet in China, there are Youku Tudou, Sohu TV, iQiYi, LeTV, PPTV and more which each plays a significant role and serves a different group of demographics in the market.
The prevalence of digital content consumption is also an irrevocable trend. As of 2015, Chinese users’ time spent on digital media per day (185.1 mins, i.e. more than 3 hours) had already exceeded that on traditional TV (160.2 mins.), and took up over 50% of the total media time spent in China. They now spend less than 10 mins. per day on newspapers – this doesn’t mean they do not care about current issues, it’s just that they’re all reading news on digital devices now.
The huge size of internet user base plus hyper-busy internet traffic pose the first challenge to international brands who’re thinking to tap the China market – which is to effectively cut through the noise and get their message through.
2. Decoding China: China will continue be leading the world in mobile – in adoption, time spent, and retail commerce
So what is the most popular device among Chinese users for digital content consumption? It is mobile – primarily Smartphone, without a doubt. An average Chinese user spends 74.6 mins. on the mobile internet per day – more than one-fifth of the total media time spent per day. While time spent on PC still exceeded an hour per day and showed a minuscule growth by 0.3 mins in 2015, its share of pie was on a gentle downward slope. According to a TNS survey, Internet users in China aged 45 or younger also spend more time with the mobile internet than the worldwide average.
With the wide adoption of Smartphone and digital payment channels, China also leads the world in mcommerce. According to eMarketer, China’s retail mcommerce totaled US$330+ billion in 2015, which was 2.7 times the summation of US’ and UK’s total. The gap is expected to widen to 4.4 times in 2018.
3. Connecting to China: Get a strong grasp on your target audience’s user behavior and interest before outreaching them
Chinese consumers are savvy online shoppers. In 2015, 64.8% of Chinese Internet users – equivalent to 418.7 million Chinese people – had bought something at least once online. The number is expected to virtually reach 70% this year, translating to 468.1 million Chinese people, and that means seven out of 10 Internet users in China could be your potential sales leads.
According to research firm Mintel, total cross-border online shopping is expected to rise to US$222 billion by 2020, up from US$97.3 billion last year, accounting for 17% of the US$1.3 trillion in Chinese online sales expected in 2020.
They are getting more discerning as well. According to a McKinsey’s 2016 China Consumer Report, there is a clear tendency among Chinese consumers to upgrade to premium products, especially in the cosmetics, spirits, dairy milk, hair care, rice, fresh produce, beer and other sectors.
When it comes to outbound travel, as Chinese have become more experienced travelers now, they tend to look for memorable experiences rather than products, with quality cinema, dining, spa visits and travel all seeing robust loyalty among Chinese consumers. As online travel agency Zanadu had shared (cited in a FT news report), “(Chinese travelers) go to the opera in Italy, watch the Northern Lights in Scandinavia and dine at Michelin-starred restaurants in Paris.”
And same as what they do in other retail consumption, Chinese consumers are getting more used to book their travel online. According to eMarketer, digital travel sales in China are expected to show another year of robust double-digit growth of 24% in 2016, hitting a total of US$81.7 billion.
So you have a good grasp of the big picture now. With these in mind, here are some suggestions for international brand marketers or digital decision makers looking to tap the China consumer market:
1. Mobile is a must have in the marketing mix
Given the ultra-strong mobile penetration and adoption in the market, mobile is now a must-have in the marketing mix of brands who’re thinking to set foot in China.
The growth in mobile ad spend is already an unquestionable trend in the market. It is expected to take up 34.9% of the world’s total this year, and 49% of the pie in 2018 – which would be 4.5 times India’s share by then.
2. Get your website, ecommerce and online payment solutions in place to ensure smooth conversion
Get your website, ecommerce and online payment solutions (all in mobile-friendly setup for sure) in place to ensure smooth conversion, or better yet, capture the critical micro-moments and close the deals when the consumers need what you have to offer at the moments.
3. Take a cross-screen programmatic approach
One thing that I would like to highlight is – albeit the prevalence of mobile, advertisers should never neglect the importance of other channels in the marketing mix when planning campaigns, as Chinese Internet users tend to use multiple devices at different times of the day for different purposes, making it necessary for advertisers to adopt a cross-screen approach if they want to effectively reach the right people on the right device at the right moment.
Also, work with a reliable digital marketing solution partner who has local knowledge, solid experience and concrete expertise of the China market to ensure a powerful and meticulous delivery of your campaigns.
4. Get a data management platform in place (if you haven’t yet) to facilitate programmatic media buying
To do effective advertising in China, it is always imperative to take a data-driven approach to cut through the noise, or else your campaign message may simply get lost in the giant sea of information, no matter how well-crafted your message or visual are.
It is hence always good for marketers to work with a data management platform (DMP) to more effectively find out more about the audience they are trying to reach and where those consumers spend their time, so as to better employ the information they hold about their target audience and drive smarter and more accurate media buying by serving campaign messages that better suit the profiles and needs of different groups of target audience.
By the same token, one should always work with a digital marketing partner with strong data and technology capabilities who would be able to effectively identify the right target audience groups based on data analytics and deliver a truly programmatic and precise audience buying for your campaigns.
Darren Jacobs, Head of Europe at iClick Interactive Asia Limited