Digital China: What’s old and what’s new

China’s digital scene has evolved into Galápagos Islands and rules evolved elsewhere often just don’t apply. The lack of commonly-used platforms and practices in the market can lead to non-natives believing digital marketing in China to be basic and unsophisticated, says Shakir Moin, vice-president and chief marketing officer of the Coca-Cola Company China. “This is the biggest and most outdated misconception I’ve come across. I’ve worked in multiple markets and, outside of Japan, China is the richest in digital-social connections.”

For marketers more clued into the market, trends coming from China’s digital scene over the past year has been the death of Weibo; investments into engaging brand websites; and the rush to work with Key Opinion Leaders (KOLs) and amass a large number of followers. All these are now being either phased out or downgraded in the marketing mix, says Brian Leong, general manager at MullenLowe Profero Shanghai. 

“Brand websites are now being completely phased out; now a ‘.com’ is a glamorous banner ad that redirects users to an ecommerce or social media page,” says Leong. Weibo’s supposed death at WeChat’s hands, he adds, has been long drawn out and both platforms will likely coexist for a while longer. 

There is also a lot less hype around the use of KOLs, and more questions are being asked around the effectiveness of these online personalities to drive awareness or sales (tune in Thursday for our feature on dark marketing). “The reality is that having millions of zombie fans have made being a KOL not as lucrative as before,” concludes Leong. 

Likewise, the desire for brands to rack up millions of social followers is waning as marketers discover that online fans, or even campaign engagements, are not moving the sales needle. Part of the problem has been a lack of clean data and high degrees of overlap from the main sources of consumer data in China—Baidu, Alibaba and Tencent. 

Coca-Cola China recently put China’s main data sources to the test. To aid in the promotion of one of its major brands, the firm bought data from everyone touching the brand, resulting in a campaign that gained 1.4 to 1.6 billion impressions. 

“While historically we’ve celebrated this number, internally we never saw its correlation to an increased number of transactions or brand equity,” explains Moin. “The impact of that large number of impressions should have impacted both those measures dramatically.”

Coke launched a project to understand why. “We started cleaning the data, and it took us four to five months to do this. We got rid of multiple user IDs, devices and so on, and eventually what it came down to was seven million unique users. Of that number, we still don’t know how many were existing drinkers of the brand and how many were new. Now, seven million unique users for a brand with a consumer base of 350 million is a nice-to-have number, but it’s not doing anything for us.”

The issue, concludes Moin, was not media wastage or misplaced online media: the true challenge was and is China’s big-data universe. “Doing this data cleanup for every campaign is not possible. It costs too much, it takes too much time, and so the utility of this system is questionable.”

Utility, says Moin, is the factor that truly determines what survives in China’s ecosystem. “QR codes in promotions or games have been phased out as a gimmick, but its use in m-commerce, to order food or merchandise from posters for example, has cemented it as a must-have.”

Similarly, mobile payments and mobile commerce sites are not going anywhere because they genuinely make it easier for consumers in China to transact (see our report on m-commerce in China on Wednesday). “Satisfaction via ease of use and instant gratification has always been the nature of what works in mobile,” says Jane Lin-Baden, CEO of Isobar China Group. When these things come together, it has the power to change user behaviour, she adds.

“Take the recent hong bao (red envelope) phenomenon on WeChat for example,” Lin-Baden explains. “We know that Chinese people hate to leave tips, and yet last Chinese New Year, US$5 billion in hong bao was given out via WeChat. Now, traditionally the hong bao is about far more than money—it’s about the process of give-and-take. However, even this fundamental cultural behaviour can be replaced by digital when it gives the impression of speed, luxury and convenience.” 

Overall though, the digital marketing scene in China has evolved beyond focusing on individual platforms or engagements. The conversation, say experts, now revolves around creating a seamless consumer experience, both online and offline. 

“The focus [for brands] is now around building consistent customer touchpoints in a regular basis, and this applies more for retail brands than any other,” explains Colin Light, partner at PwC consulting. He currently leads digital consulting for China and the newly formed PwC China Experience Centre. 

This is far easier said than done as it requires integrating multiple, very siloed departments within brands including marketing, technology, sales and CRM. Required to bridge all these are roles around insights and analytics (see our feature on in-demand talents tomorrow). 

“China’s CEOs have invested in technology and architecture about three times as often as data and analytics,” says Scott Likens, partner at PwC China Consulting and analytics lead for Hong Kong and China. “The thing is, while the technology is advanced, companies are finding that insights and analytics are becoming the differentiator. Companies in China have realised the need to keep as well as capture customers.”

Customers in China, however, are evolving even faster than its technological platforms. “When it comes to average customer expectations, the bar is now very high,” adds Likens. “It has to be the full, seamless experience.”

All this means marketers in China are running ahead as fast as they can. “The responsibility is on us,” says Moin. “We cannot wait for the [data providers and technology platforms] to change in our favour. If the situation does change for the better, fantastic. In any case, we can’t wait. We have to change our data management protocols, the way we’re working on taking line-of-sight impressions versus the end game. We have to question the big numbers, engage actively with our online marketing partners and go in with our eyes open.”