Your Blueprint to Marketing in China in 2020 (Chinese New Year Special)

China’s substantial population, its thriving economy, and unique cultural norms make it an exciting region for marketers around the globe. In our Chinese New Year special, we discuss:

• Why marketing to China is now a key priority
• Five tips to help you outline a marketing strategy for China
• Important trends and metrics to remember for 2020
   

As the world’s second-largest economy in terms of GDP, China is now a key market region for brands. However, marketing in China can seem difficult, due to regulatory complexities and unique cultural norms. For example, commonly used social media marketing platforms, such as Facebook or YouTube, cannot be accessed in China. Also, the influencer marketing community in China is organized differently, with niche segments and norms.

On the occasion of Chinese New Year 2020 (January 25), we take a closer look at marketing strategies for Chinese consumers and bring you useful tips and insights.

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Why Marketing to China Is a Key Priority for Businesses

Several factors have made China a popular region for businesses going global. To begin with, it has a large number of high net worth individuals (HNWI) – between 2016 and 2019, the number of Chinese adults in this bracket increased by 80.8 millionOpens a new window . Further, China boasts exceptionally high mobile penetration making it ideal for mobile marketing strategies. With approximately 1.2 billion subscribersOpens a new window , China now has the largest mobile audience globally.

Here are a few important metrics from McKinsey’s China digital consumer trends 2019 reportOpens a new window that surveyed 4,300 digital consumers across the country. They precisely indicate why brands need a well-defined strategy for this region:

• Online retail in China was expected to reach $1.5 trillion by the end of 2019, making it larger than the next 10 markets combined
   
• Traditional e-commerce witnessed a slight decline between 2017 and 2018, while the number of shopping malls saw 11% YoY growth. In other words, omnichannel is now a key buzzword for marketing in China.
   
• 63% of apparel buyers use their mobile phones for research while standing in a physical store.
   
• In 2019, 43% of buyers used digital channels to purchase traditionally offline products such as home decor, packaged goods, personal care, etc. – 2.5 times more than in 2017.
   
• Social media and content consumption account for two-thirds of the total time spent online, making it critical for brands to have a social marketing strategy in China.
   

These metrics reveal an interesting picture. Unlike other market regions, the Chinese consumer is truly omnichannel, and the lines between digital and offline are increasingly blurred. In 2020, brands need a robust, reliable brick-and-mortar presence, bolstered by a well-articulated digital marketing strategyOpens a new window , to win in the Chinese market.

Let’s look at five tips to make this happen.

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5 Tips to Remember When Marketing in China

Despite its localization complexities, large brands do not shy away from investing in marketing to China. In 2018, The Wall Street Journal reported Opens a new window how Chinese shoppers played a significant role in maintaining Gucci’s global revenue levels. And last year, PepsiCo made a major investmentOpens a new window in one of China’s largest natural food companies, buying 26% of its shares for $131 million.

For marketers looking to take advantage of China’s promising consumer base, here are five useful tips:

1. Use a dedicated platform for influencer marketing in China
 

Influencer marketing in China is different from the standard approaches in other market regions. It has a highly organized influencer community, with specialized influencer agencies, consultancy groups, and incubators to hone social media talent.

And, there are various levels of influencers, like key opinion leaders (KOLs) who are recognized for the validity of their opinions, in a specific domain. There are Wanghongs or influencers who gain popularity for their online appearance. This is in addition to traditional celebrities who also have a large social media following and influence.

In 2020, marketers can use a dedicated platform like ParkluOpens a new window or Robin8 Opens a new window to navigate the influencer community and find the best online advocates for their brands and marketing needs.

2. Live-stream short videos as part of your social marketing strategy in China
 

Last year’s edition of the Internet Trends report by Mary Meeker Opens a new window highlighted the critical role played by short-form videos in China. Chinese consumers spent a total of 600 million hours per day watching short-form videos in April of 2019. Popular apps for video consumption included Douyin (or Tik TokOpens a new window ), Kuaishou, and Haokan.

While there are other social media platforms for long-form video consumption like Youku and iQiyi, short-form is the trend to follow in 2020. You can work with KOLs, Wanghongs, and other types of influencers to create short videos of your product. These can be live-streamed through social media at regular intervals to garner a loyal audience.

3. Leverage WeChat for B2B marketing in China
 

B2B marketing in China involves several foundational steps, like hosting B2B websites on a Chinese server and optimizing website content as per Baidu’s SEO norms. The content should also be available in Chinese so that it can be accurately indexed. B2B marketers also need a special license called the ICP Beian License to host their websites in Mainland China; this also entails a local offline entity.

To streamline B2B marketing in China, we recommend leveraging WeChat for customer communication rather than website updates or emailers. Email marketing in China isn’t a good area of investment for B2B brands as the number of email users in China is surprisingly low.

WeChat is a messaging app with integrated services for networking, online shopping, and payments, where users can view posts published by accounts they have subscribed to. Leverage WeChat to send newsletters, new product updates, service recommendations, and other marketing messages.

4. Take advantage of Chinese shopping festivals for affiliate marketing
 

The first thing to remember here is that websites that work with the affiliate platforms outside of China cannot be promoted in the country. Once you have an alternative website domain in place, one with China-supported payment methods, such as Alipay or WeChat pay, you can get started with your affiliate marketing strategy. The operations are pretty simple – you partner with an affiliate network under the CPS Union.

To make your affiliate marketing Opens a new window strategyOpens a new window a success in China, take advantage of localized shopping festivals in the region. Keep an eye on Double Eleven (Single’s Day in China, celebrated on November 11) – it was popularized by Alibaba in 2009, making it the Chinese equivalent of Cyber Monday. There’s also 618, a mid-year shopping festival that usually falls in June.

Events like these are perfect occasions to share promotional content and hold private sales through your affiliate marketing networks.

5. Replace multi-level marketing in China with direct sales
 

There are no two ways around it: multi-level marketing in China should be strictly avoided. Pyramid-like sales structures that employ an undefined number of resellers (on the lines of Amway) were banned in China in 2005. And as the Chinese economy has grown, publicly-traded multi-level marketing companies, including Herbalife, Nuskin, and Usana, have dipped in valuationOpens a new window .

You can replace multi-level marketing with a stronger direct sales strategy, explicitly focused on brick-and-mortar locations that are complemented by online content. This will allow Chinese consumers to confidently buy products from your brand while utilizing digital assets for additional research.

Remember, direct sales channels require a business license, as well as training courses for all resellers.

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In 2020, Digital Marketing in China Will Take Off – Are Brands Ready?

The future of digital marketingOpens a new window in China looks optimistic, to say the least. A 2019 surveyOpens a new window of 240 marketers in China revealed that 79% of professionals were looking to increase their digital marketing spends. Social marketing spends in China was expected to grow by 21% on average, with special attention on KOLs, short-form videos, live streams, and official WeChat accounts.

The writing is on the wall – businesses eager to scale fast must make deeper inroads into the Chinese marketplace in 2020. This includes a careful blend of digital marketing and offline activity and compliance with the country’s regulations. Keeping these five tips in mind, you can articulate an effective strategy for marketing to Chinese buyers, gain from its large (and fast-growing) segment of affluent consumers, and build a robust brand in the region.

Happy selling, and have a great Chinese New Year!

Do you have a recommendation for marketers who want to enter the complex Chinese market? Tell us on LinkedInOpens a new window , FacebookOpens a new window , or TwitterOpens a new window .