Chinese Marketing: The New Frontier

Chinese consumer behaviour has long been changing and developing, seemingly evolving much faster than in other markets. In the last few years, Chinese consumers have had increased exposure to digital channels and have integrated social media in their daily lives, which has played a significant role in the rapid change of consumer habits. With their increasing consumption habits and purchasing power, understanding the motivations and drivers of modern Chinese consumers is the key to success in the Chinese market. 

In the past, Chinese consumers were most focused on function and price when making purchase decisions. However, Chinese consumers are becoming more sophisticated and are now taking more considerations into account. They are becoming more particular and have higher expectations as the market has become saturated with both international and local brands.

As standards of living have improved in China, Chinese consumers are trading up from mass-market products to premium, high-quality products. While consumers previously made choices based on the popularity of a brand, now they are more likely to be driven by personal preference. They are also more likely to take into account the opinions of other consumers, which have become more of an influence on purchasing decisions than ever before. Chinese consumers are taking the time to read reviews and comments on e-commerce apps, to find out more about products and services.

Online marketing China: The Facts

Mobile payment systems like Wechat Wallet have made online shopping easy, so Chinese consumers are purchasing more online, with 300 million Chinese consumers using sites such as TaoBao, Tmall, JD, and Xiao Hong Shu. In addition, 700 million monthly active social media users in China spend a huge amount of time watching videos, playing games, and communicating with friends on their smartphones.

As Chinese consumers are spending more and more time online, it’s no surprise that a new study revealed 79% of advertisers in China will increase digital marketing spend next year.  Digital marketers in China are most interested in automated, big-data-driven marketing, and they are poised to make the most of new technologies. 

The following are some of the key things that are shaping Chinese marketing going forward.

1. Tap Into the ‘Silver Economy’

China’s elderly population is expected to exceed 255 million by 2020 and until now the generation has somewhat avoided digitisation. However, the Chinese government has recently brought in initiatives to get the elderly into the digital economy. The number of elderly smartphone users in China has already significantly increased as this demographic has been made aware of smartphone features, such as mobile payments, that can make their life easier. WeChat reported that it saw its users between the ages of 55-70 grow from around 8 million to over 50 million during 2017.

Many of China’s largest businesses are developing their strategy around the so-called ‘silver economy’ market, launching new products and campaigns to target this demographic specifically. Alibaba’s Taobao launched a new channel on its platform for seniors in January 2018. The channel was designed so that it was easier to use for seniors and their accounts could be linked to their children or spouse’s accounts so that they could share purchases that they were considering in group chats and make payments for each other with the “pay-for-me” option. 

For businesses trying to tap into this specific demographic, running ads on apps and websites like Alibaba’s Taobao and many more like it, can be an extremely effective tactic.

2. Make the Most of Short Video Ads

Short video content is a trend that began back in 2018, but it’s showing no signs of slowing down going forward. Chinese consumers prefer short, easy to watch video content as opposed to longer-form video formats like live-streaming. This has driven the popularity of apps that are focused on this type of content, such as Douyin (Tik Tok), Meipai, Kuaishou, and Quanmin K Ge. The most successful app, Douyin,  has a user base of over 500 million with users spending an average of 52 minutes per day on the platform.

Digital marketers only started to take advantage of short video content in 2017, but its use has grown significantly since. In a survey compiled by PHD Media China, only 22% of marketers used short video content in 2017, while the number rocketed up to 62% in 2018. Brands looking to market to Chinese consumers should ensure they include short videos in their digital strategies, which should be considered as a priority over creating text & image-based content.

3. Create Long-Form Content that Tells a Story

As we just spoke about the popularity of quick, easy to digest content in China, this may seem like a contradiction.  While Chinese consumers love short video, when it comes to text & image-based content, longer is better. The most popular content, however, is typically user-led and doesn’t have much to do with the brand or its products or services, but rather focuses on delivering an interesting story. This content format has been trending across social media in China, and a number of brands have been trying out the new content type. 

Fast-food giant McDonald’s has seen success with this kind of advertising. The company recently ran a campaign where they told users a story about explorers who landed on another planet. Viewers followed the story of explorers travelling across a fiery planet, until the ‘big reveal’ at the end, when they realised the explorers had not been on a volcanic planet, after all, it was a McDonald’s chicken wing.

This type of advertising is not easy to produce, but it is effective, particularly when targeting Chinese consumers. It is not only memorable for the user, but it also gives content specialists the opportunity to think outside of the box.

4. Don’t Neglect 3rd and 4th Tier Cities

China has undergone massive geographical changes in the last decade. Urbanisation & population growth in 1st tier cities has been significant in driving the Chinese economy but due to government initiatives and the rising costs of living, population growth has slowed in these cities in recent years. It is predicted that urbanisation will continue, however 3rd and 4th tier cities will see the quickest growth going forward. These 3rd and 4th tier cities can be found throughout China, and some have a population as large as a whole country in Europe. 

Cities such as Chengdu and Hefei have seen huge growth in terms of GDP in the last few years, which has meant that their inhabitants now have higher disposable income and are looking for quality products and services. With such a huge potential target audience, these cities have become targets for international brands looking to expand their business.

5. Rising Uptake of Voice Recognition Technology

It has been estimated that by 2022, global voice-based shopping will be worth $40 billion, with Chinese consumers accounting for 52% of this total. Chinese consumers are adopting voice search at a rapid pace, primarily as it faster and easier than typing. In fact, it has proven to be 2.8 times faster to dictate Mandarin than it is to type.  Voice search also makes multitasking easier, which fits in with the modern Chinese consumer’s increasingly busy lifestyle.

The previously mentioned ‘silver economy’ group have also taken to using voice search, with 9% of 55-64-year olds using voice search daily every day. This percentage is likely to increase across all demographics as businesses start to optimise their online assets for voice search.

China’s premier speech-recognition company iFlytek is tipped to be instrumental in driving consumer uptake of voice search. The company has already teamed up with mobile phone companies China Mobile, China Telecom and China Unicom, to help introduce voice-activated smartphones to the Asian market. This will massively impact the way consumers interact with businesses online. As a business, it’s important to get on the voice search bandwagon quickly, before your competitors do. The voice shopping market is on the increase, but currently, only 4% of US companies have adapted to voice search technology. If you can master it early, you have a significant chance to become a leader in your home and international markets.

6. Increasing Power of Micro-influencers

In China, there are over 1 million influencers, with over 10,000 followers on social media, which has meant that the market has become saturated. With so many influencers across their social media feeds, Chinese consumers are starting to get bored with them and trust them less and less. 

Businesses using influencers across their campaigns have to be careful about how they do it with this influencer fatigue setting in.  Consumers are more aware of promotional content across social media and don’t want to see posts that are not relevant to them, their lifestyle and their beliefs. This has driven a trend towards Chinese consumers following smaller influencers in a niche that interests them. These are known as micro-influencers, and the fact that they are smaller is key to their success. With fewer followers, micro-influencers can build deeper connections with their followers by replying directly to comments and engaging with their fans to create a sense of community online. 

There are micro-influencers in almost every niche that you can imagine. The key is finding one that is relevant to your target audience. You want to ensure their interests align with your business and that they only post content that is related to your industry. Micro-influencers typically want to focus on building their brand rather than making money, so they often don’t charge as much as an influencer.  In addition, their engagement rate is typically higher, so they often generate a better ROI.

Digital Squad is an innovative marketing agency, operating out of New Zealand, Australia and Singapore.  International specialists, we’ve worked on a number of Chinese marketing campaigns and know how to succeed in the market. If you’re looking for an online marketing agency China, don’t hesitate to get in touch.