August 6, 2012
By Jim Reesing
When marketing globally, it can be short-sighted – and costly – to assume a one-size-fits-all strategy.
Working within China is no exception. Yet some organizations are missing out on sales and leaving room for their competitors because they do not understand the Chinese consumers and their preferences.
Let us look at some numbers to illustrate what is going on.
China is the No. 1 market for smartphones, and 80 percent of Chinese companies have mobile sites.
That sounds pretty good.
Yet, our research found out that only 20 percent of multinational companies marketing to China have a mobile application or Web site.
That is quite a disconnect.
According to the Boston Consulting Group’s report “The World’s Next E-Commerce Superpower,” China has become the second-largest ecommerce market worldwide with 145 million online shoppers.
While the United States still retains the top spot at 170 million, BCG predicts that China is primed to overtake this spot.
As a country with expansive geography, Internet access – driven by low-cost broadband – has streaked past the landline phone system and brick-and-mortar retailers to become the prime venue for shopping.
Also, mobile computing is pervasive since China boasts 200 million smartphone users with 60 percent of residents accessing the Internet solely through their wireless device. Like in India, mobile marketing is a prime option for targeting consumers in the rural areas.
According to BCG, the Internet usage numbers keep pace with other developed markets such as the United States, Europe, and Japan. One key difference is that the desire to use the phone for shopping in China, whether for price comparisons or for additional information while in a physical store, far exceeds the other markets.
The Chinese consumer is mobile-savvy with specific buying behaviors. Also, shoppers in China have no problem letting their displeasure be known if the online experience doesn’t meet their expectations.
As an example, Taobao, the country’s largest online retailer – think Amazon.com – dramatically increased the fees to sellers last year, who are mostly mom and pop organizations. The outcry and protests caused the retailer to backtrack on much of the rate hikes.
Also, the majority of online customers do not start their shopping experience with a search engine. Once again Taobao as the largest etailer blocks the leading search engine Baidu.com.
So, these shoppers are being trained to not rely on search engines to find products online.
Only 19 percent of consumers in China go to the official brand or manufacturer Web site where that number is more than 40 percent in other markets.
Let us take the travel industry as an example.
With the rising demand for travel in China, both within the country and abroad, this is a market ripe with potential and opportunity.
First, there are some key front-end technologies that can enrich the customer’s experience.
A hotel can leverage high frequency wireless of near field communications to support echeck ins and checkouts.
Through location-based services a property can offer a virtual concierge who distributes tickets for events and dining specials directly to the guest’s handset.
Hotels and restaurants are recognizing the potential of traveling in their customers’ pockets by creating direct and personalized touch points.
Now let us take a moment to discuss the back-end technology. It is great to have customer data, but the ability to utilize these details faster and more effectively is essential.
Marketing efforts should be built upon research and customer profitability analysis.
By using business intelligence, this data can support strategies for customer acquisition.
Through these efforts, companies can identify the most profitable customers and cater marketing and service programs directly.
Also, a service-oriented architecture, cloud computing, RFID, and virtualization can all help support a company’s tailored mobile efforts.
Chinese politician and reformer Deng Xiaoping said once “no matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat.”
For today’s marketers a good cat is the right mobile marketing strategy to capture China’s smartphone-savvy consumers.
If not, your competitor will be happy to take your place, and your sales.