Many UK companies struggle when figuring out the complex world of selling their goods and services abroad. In this blog we explore the dynamics of marketing to China, why we believe there is a missed opportunity, and why Zudu are helping UK companies establish a market presence and sell more in China via digital marketing initiatives.
Marketing to China – A Missed Opportunity for UK Products
In 2016 the UK had a trade deficit of £25.4 Billion with China, which may not come as a surprise to most of the population. What may surprise many is that China is now the 6th biggest destination for UK goods exports, in front of the likes of Spain and Italy, which is a demand that has been consistently increasing over the past 20 years. This has no doubt been spurred on by China’s rapid growth, rising middle class and urbanisation. Products such as Burberry, Jaguar Land Rover, beer and believe it or not tea are hugely popular in China as they seek out luxurious original items and expand their tastes.
It is however well known that the UK market lags behind other European nations such as Germany, France and Italy when it comes down to Chinese exporting and also investment back into the UK economy. Much of this is down to the broad range of products on offer from country to country, but there is also an overwhelming feeling of lost potential within the Government and businesses alike for existing products. That’s why the Government has recently embarked on a five-year campaign to increase demand for UK products in China.
The problem itself isn’t just linked to demand, UK companies have historically had a big issue with getting to grips with marketing to China and establishing any significant operations within the country. For example Marks and Spencer’s famously pulled out of China just last year with many potential customers claiming they didn’t even know it existed. This suggests that much of the problem lies with the overwhelming cultural differences and a significant misunderstanding of how to market your business in China. The cultural differences aren’t just centered around tastes and language but consumer behavior is hugely different in China too. How people buy, where they hear about products from and where they buy them from is a difficult thing for many UK companies to get their head wrapped around when considering delving into the world of marketing to China.
Digital Marketing to China
Let’s look at an example with regards to digital marketing… in the UK market companies create a website or eCommerce shop, perhaps an app, get visible on search engines, set up social media accounts and pay for advertising. It’s a mix that if conducted in the right manner can take UK companies to new heights and make loads of dosh. In China the process is completely different, whereby search engines, apps and social media have all been protected by the firewall. They have been developed in a unique manner which renders any western digital marketing initiative useless in China.
Chinese purchasing behaviour itself is very fast paced and mobile centric in comparison with western counties due to several economic developmental factors. This has resulted in a mobile orientated economy where apps are the primary interfaces to conduct business and make purchasing decisions, whereas desktop email and web interfaces are typically more utilised in the west. This in itself can be a huge challenge for UK businesses looking to break into the Chinese market.
Weibo and WeChat Marketing
For the purposes of this blog we have summarised the two primary interfaces for digital marketing in China, Weibo and WeChat. Just like marketing your product or service in the UK via web, apps and social media, these two platforms have helped countless organisations break into the Chinese market and increase their popularity within the general population.
Weibo (translated as micro-blog) is a microblogging application that incorporates features from the likes of Twitter, YouTube and Instagram, and can be utilised to gain a following and for advertising. In order to get started on Weibo you are required to create a company account and get verified which is known to be a fairly complex process for international organisations. Once you are verified you can do the following:
Increase your number of fans
In order to do this effectively you may be required to pay other verified users to promote your articles.
Pay for advertising
You would pay for ads in the “popular” page, similar to Facebook ads.
Cooperate with big “V”s
Big “V”s are very popular users (>500,000 fans) who can help you promote your product, which tends to be fairly expensive.
WeChat boasts over half of China’s population as a user base and is the most popular social app in the country. The Chinese ‘app for everything’ contains functionality such as chat, news, games, video calling, ecommerce shopping and an electronic payment service. The vast capabilities of this app have opened up an entire micro economy which the Chinese call We-Business (Translated to Micro-Business), allowing sole traders and small businesses to promote and transact with their user base at a low cost with low setup fees. We-Business has been active for seven years in China, and the app is fully integrated into day-to-day goods and service trading in the economy. WeChat can be compared to both WhatsApp and Facebook, however boasts much more functionality that both.
In order to promote your business on WeChat you have to set up an individual account and link this to your WeChat public platform, which essentially acts as a mini-blog for businesses. Within the individual account you have friends, groups and moments which can be liked and commented on. Similar to Weibo you can also have an authenticated account which requires company documents and ID cards, which allows the business to trade on the platform.
Within the WeChat public platform there are again three primary ways of promotion for businesses:
This is a direct link back to your WeChat public platform which would be shared in groups or moments, and if users are interested in your article they will follow your WeChat public platform.
Advertisements in other user articles
This is similar to Google display ads where the users can share some revenue generated from through click traffic, and the advertising company pays a bidding fee for through click traffic.
Popular user endorsements
Businesses can pay popular users (>4,000) friends to promote and share their product.
Within your individual WeChat profile you can also promote your business, and this is called the Agency system, which makes up what the Chinese call We-Business. When run well this is a highly profitable system of commission incentivised sales by individual users on WeChat, acting as freelance operatives. The company would first be required to create levels of commission based on volume e.g. level 3 = 5,000 units of beer at price x. Users would then be required to pre-order that quantity in order to benefit from that deal. There can be many different levels going down to individual units at the primary level, however the first level is the most important as they are encouraged to spread the news.
That sounds great! How can Zudu help?
Are you a UK business interested in marketing to China? If you want to find out more about marketing in China, and hear more about the success stories Zudu has had marketing products in China then get in touch with one of our experts today.
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