Globalization Mobile China

What marketers everywhere are getting wrong about the Chinese market

By Irene Yang, Managing director

August 27, 2021 | 6 min read

Marketers around the globe are missing out on valuable opportunities to tap into the engagement, influence and buying power of Chinese consumers, according to Irene Yang, managing director at mobile advertising platform Nativex. Here, Yang argues that brands with a more mature understanding of the Chinese mobile market, the country’s regulatory landscape and trends such as livestream e-commerce stand to capture a larger slice of the Chinese market.

Shanghai's Nanjing Road filled with pedestrians at night

Companies should not underestimate the challenges of reaching the Chinese audience

Brands hoping to expand into the Chinese market have a lot to be excited about – with increased internet usage and mobile connectivity, it is ripe for new businesses to stake their claim. Foreign companies, however, consistently underestimate the complexities of China’s unique internet ecosystem, fragmented mobile audience and regulatory landscape.

Outside companies face challenges in reaching their audiences

According to a 2020 report by RiskIQ, China accounts for 40% of app spending on mobile devices across the globe – making it the largest single-country spender in the world. Clearly foreign companies and Chinese audiences are ready for one another, but some brands are learning the challenges firsthand as they struggle to navigate the complexities of a new market.

While foreign companies are used to advertising and interacting with consumers on Instagram, Facebook, Twitter and other social channels, that’s simply not where Chinese audiences gather. Instead, daily active users are interacting with brands on WeChat, Weibo, Douyin and others, working with their own kind of internet language, memes, influencers and trends that foreign companies often find themselves missing out on.

Google Play isn’t the powerhouse in China that it is in much of the West either, with hundreds of app stores provided by mobile devices and tech behemoths such as Tencent and Baidu. It’s also a market in which Android beats Apple – by a long shot. While Apple corners nearly 60% of the mobile market in the US, in China that number stands at just 20%, with Android taking up most of the remaining 80%. An expanded Android market is unfamiliar to foreign operators, making it crucial for outside companies to work with locals to get a handle on how to work more frequently and thoughtfully with Android users.

Each of these presents its own set of challenges when a brand’s app attempts both organic and paid user acquisition.

What works in reaching Chinese consumers

Some things, however, are nearly universal in the 21st century. In this case, that constant is change. The mobile market is ever-shifting, albeit in ways that may be different than foreign companies have yet encountered.

In the last two years, livestream shopping has taken off in China, accounting for $137bn in e-commerce sales in 2020 – accounting for 4% of all e-commerce sales, according to data from the China Statistic Bureau in conjunction with iResearch. On digital channels such as Alibaba’s virtual shopping mall Taobao Live, viewers watch their favorite influencers review products through their own social media channels, guiding consumers toward purchase. This content is akin to modern-day infomercials – but they are highly personalized and inextricably linked to influencer culture.

Li Jiaqi, for example, is the top livestream influencer in China, where they’re better known as Key Opinion Leaders (KOLs). The 27-year-old KOL has helped Alibaba sell $145m on one Singles’ Day (the unofficial November 11 holiday celebrating single people); helped sell 15,000 lipsticks in five minutes on Taobao; and assisted Jinzi Ham in selling 100,000 products in five minutes, increasing that company’s value by more than $100m in just two days.

Li Jiaqi is just one of the powerful KOLs in China, and while foreign companies may be familiar with influencer culture, that level of power may go untapped without the local knowledge vital to locating and working with the right KOL.

Similar strategies have been attempted by companies such as Amazon during Prime Day; however, these livestreams lack the audience engagement seen in China. This is due, at least in part, to brands failing to utilize a multichannel approach and effectively seeding content prior to the livestreaming event. It’s an unfamiliar landscape for marketers outside of China, while local creatives are well-versed in this and other trends that are changing the world of e-commerce.

Considering that the livestream e-commerce industry is expected to reach $300bn in 2021 alone, brands have a significant opportunity to reach audiences directly. To do so effectively, however, requires careful planning and a deeper knowledge of audiences and engagement trends.

The power of localized advertising

At the center of a successful brand introduction to China lies a crucial point: without a firm understanding of preferences, needs, consumption habits and regulations, foreign brands struggle to reach a Chinese audience. It’s vital to utilize localized advertising creatives in China.

Locals immersed in any culture have an innate understanding of trends and desires that outside companies simply do not. On a professional level, they’ve also seen and participated in market changes over the years that have led to the unique blend of social media, in-person shopping and e-commerce – all within a regulatory landscape that is entirely foreign to companies outside of mainland China.

Playing catch-up is already a stressful endeavor at home – when trying to break into the Chinese market, working without experts can spell the end of the endeavor altogether. Companies should not underestimate the challenges of reaching this audience, or the power of local creatives to help overcome those challenges and find success in China.

Irene Yang is managing director at Nativex.

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