Forget Google, Youtube and Tiktok. Think Baidu, TMall and Douyin instead ... but there´s much more to know before entering the Chinese market! Read on.
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With a population of over 1.4 billion, it’s no wonder China attracts a lot of interest in the business world. After all, how could one ignore in all earnest the 2nd biggest economy of the world, in terms of GDP? It sure is an exciting and still fast-growing market. But to conquer it, you first need to understand it … Fasten your seatbelts, Ladies and Gentlemen – we’re approaching China!
Don’t expect to be googled, be “baidued” – if you can
So, you're determined to conquer China digitally with your products and services. The first thing you need to be aware of is that there’s no way to do it via Google!
70% of Chinese internet users mainly use their biggest Search engine, Baidu. And when it comes to language, no need to overcomplicate things: Baidu operates with simplified Chinese letters, which are most commonly used for Mandarin, the Chinese variation spoken in the mainland. Thus, this setting is a common one in Chinese e-commerce context. Although the Hong Kong and Macau population still speak and write Cantonese, they do understand simplified Chinese.
To rank on Baidu’s first pages, you'll hardly succeed without advertising – which is only possible with a registered business address in China or certain East Asian countries. This certainly does call for a significant investment and commitment, but opens one gateway to a virtual universe that is populated by a promising audience:
- China has 900 million internet users, 90% of whom are mobile.
- The country forms the largest e-commerce market in the world, bigger than all e-commerce market shares of the 10 global companies who dominate that sphere, combined.
- By 2023, e-commerce is forecasted to amount to 64% of all retail sales in China.
- More than half of China’s population uses mobile payments.
Still, Baidu alone will not do the trick for you – if at all.
Mobile and Social
To be present on the Chinese market means to be present on mobile devices, for a very agile audience. Forget the “mobile first” approach: In China, it's practically “mobile only”. Remember, 90% of China’s 900 million internet users are online on mobile devices. After all, it’s the country with the highest roll-out rate of 5G mobile technology worldwide, already heading to reach more than 42 million 5G users.
Social media, going social e-commerce
Mobile and highly tech-savvy users surround themselves with their networks virtually. They can do payments while being engaged online – on the go. Which means for you that more than anywhere else in the world, social media are social e-commerce in China. By 2022, more than 413 billion dollars’ worth of goods are predicted to be sold through social e-commerce here. Know the players that may turn out most relevant for you:
1.2 billion users. An app with messaging, payment and social media functionalities, owned by Tencent. As multifunctional as it is, you can call it a “super app”. How powerful the app actually will be, depends on your business licence type. To decide which one will work best for you, get professional advice for your individual business case. Don’t hesitate to reach out to us.
2. Tencent QQ:
Around 700 million users. Another instant messenger app from Tencent – developed already 1999, but predominantly with a younger audience than WeChat.
More than 600 million users. Douyin is said to be Chinese version of Bejing-based Bytedance’s international app TikTok. While it’s true that international users can only download the latter and Chinese only Douyin, the latter offers additional features which TikTok doesn’t provide (yet).
4. Sina Weibo:
More than 523 million monthly active users. The Chinese equivalent of Twitter allows more features such as personal chats, stories and vlogs.
Keep these channels in mind for your overall strategy, but not necessarily as your starting point: Not only offer social media a very advanced and seamless e-commerce integration in China – e-commerce is social there.
E-Commerce going social
XiaoHongShu: Meet all the young professionals willing to spend
How social of a business e-commerce has become in China, turns evident at first sight with one platform: XiaoHongShu, (“little red book”, often simply called Red) with about 300 million subscribed users, of which almost a third is active on a monthly basis, at least.
XiaoHongShu basically turns all users into influencers – real KOLs (“Key Opinion Leaders”, the Chinese version of influencers), celebrities and subscribers alike. The users are predominantly female, mostly under 35 years old and from an urban background. Their usage of the platform underlines the ever growing importance of recommendations in the user behavior.
TMall: Sophistication, accelerated – the Chinese way
The biggest and most sophisticated entry point for cross-border vendors to China is another platform, though: TMall has the biggest share of the Chinese B2C platform scene. The platform is well known for its cross-border selling options and already hosts shops of the major international brands. 60% of the world’s leading brands are selling to China via TMall. It’s part of the Alibaba universe, just like the rather C2C oriented Taobao, but with an unrivaled sophistication.
A major driver of TMall’s attraction is the TMIC (TMall Innovation Center), where Alibaba identifies the Chinese consumers’ needs relevant for the contracting brand. This helps the enterprise to adapt its products to the targeted demographic groups. Another driver for TMall's success are tools such as Hey box (translating to little black box in English), a channel that highlights new products with a selection specific to the individual user profile and behavior.
L’Oréal is a perfect example how to use the platform to its fullest, not only using the TMIC to approach and adapt to Chinese consumers, but also making product launches interactive events on the platform – highlights such as a 24h live streaming with KOLs and product designers included, as well as virtual immersion rooms etc.
JD (Jingdong): Perfect logistics and WeChat integration
TMalls biggest competitor is JD (Jingdong), albeit with roughly half of TMalls market share. The platform's strong emphasis is on electronics; it tends to have more male customers than TMall. Two interesting strengths of JD are the integration with WeChat, as Tencent holds most shares among the JDs owners, and strong and fast logistics.
So many tools, so many pitfalls in China: How do you introduce your brand right?
China is an extremely interesting, but just as demanding market – starting with a legislation that rather closes the economy for foreign vendors. This makes the cooperation with cross-border platforms like the ones mentioned above a necessity.
The easiest and most promising entry is via social e-commerce platforms that allow foreign vendors, such as TMall or JD in their international versions. They do demand a good share of your profit, and the competition in China is bigger than in other markets: vendors from all over the world compete here. This sometimes results in sales that cause higher costs than profit, just to enter the market.
Thus, strong branding is even more important in China than in any other markets. First of all, the platforms become a lot less expensive once you become a strong driver of traffic for them.
Secondly, only with a brand awareness strong enough to make your audience follow you across channels, it will make sense for you to develop your own mini-apps, called mini-programs, within a super app such as WeChat.
You may also have heard of Pinduoduo as another cross-border platform through which you can enter the Chinese market. Be careful, though: Competition here works practically through pricing only, as users can team up to make bigger orders together – to make an even better deal. This is hardly the right starting point to earn loyal customers who will adapt to your pricing models.
Agile channels, users and technologies … be prepared for extreme content needs
If you’ve established your brand, probably through a social e-commerce platform such as TMall, JD or XiaHongShu, and you’re ready to host your own mini-programs on social media channels such as WeChat, make sure you do it right.
You’ll need a lot of high quality content in the most diverse formats, from video and audio (think of music streaming services and podcasts) to gaming. And don’t restrict yourself when it comes to the right format: We’re talking about a country where it has already made sense to start a big campaign with lipsticks associated to video game characters! That's exactly what the cosmetic giant MAC did in China.
Different ecosystems, different worlds
You sense it: Campaigning in China means going big. Done right, with a strong standing as a brand, the investment pays off well: an impulse to buy translates easily to a purchase, in an ecosystem that allows payment almost from any app / platform.
There’s one catch, though. As a general rule, payments can only be effected through the proprietary application of the respective ecosystem: Alipay in the case of all Alibaba (and Bytedance) apps, Wepay for everything Tencent, and Wallet for the Baidu universe.
And don’t expect to easily link from the social media channels of one group to your offers on another ecosystem’s platform. Their competition with each other is so strong that you may well find the links blocked.
Going China means going big
Finally, when going to China, do as the Chinese do … and be well be prepared when November, 11th comes up – 11/11. Look at the numbers: Don’t they look like “bare branches”? That’s why the date is not only referred to as “double 11”, but also as “singles’ day”. In both cases, this refers to the world’s biggest online shopping event, with approximately 60 billion $ spent within 24 hours. It’s a discount feast, but companies also use it to launch campaigns and to go all out. Innovative cross-media events show what’s state of the art in social e-commerce and O2O business. It’s a showcase of what it takes to go big in China. Want to be part of it? We’re here for you, to develop the right strategy carefully!
About the author
Eva Mäkler is Content Marketing Manager at Amplexor, based in Lisbon. With broad experience in Cross-Media Journalism, Eva joined Amplexor in 2020. She's a qualified Social Media-, Online- and Online Marketing Editor and Digital Media Producer, additionally certified in Inbound- and Content Marketing.