How To Develop Effective Mobile Marketing Strategies In China

Our Chinese Mobile Consumers Are An Attractive But Unique Audience report showed how marketers in China are facing the most promising — yet most complex — mobile market in the world. To help marketers overcome mobile challenges in China, we’ve recently published a follow-up report, Drive Effective Mobile Marketing In China.

Mobile is changing the daily life of Chinese consumers; the phone-addicted population (ditouzu) is growing fast. With high adoption and usage of mobile devices, consumers in China are experiencing the mobile mind shift: the expectation that they can get what they want in their immediate context and moments of need. However, marketers in China are not keeping up with consumers. Why? They aren’t thinking about mobile strategically:

  • They hold false assumptions on how to reach Chinese mobile consumers. Most marketers in China still think in a traditional way: They assume that consumers in tier one cities are the most active mobile Internet users; that Chinese mobile users can actually use the mobile Internet on the go; and that a city-tiered approach in mobile marketing will be successful.
  • Their mobile marketing strategies are still experimental. Although many marketers in China have tested mobile, only few have incorporated it as a consistent marketing channel. Marketers only spend a very small portion of their ad budgets on mobile.
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Case Study: Improving Social Media Measurement In China

Ever since we published the Social Media Measurement In China report (and accompanying blog post) last year, marketers in China have been constantly asking us if we have any case studies. This year, we interviewed Nestlé China, one of the few marketers in China that has started to measure the link between social media metrics and business outcomes rather than basic volume and engagement metrics. The result: our new Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands report.

Nestlé China's ice cream business unit has two major brands: BenNaNa and Five Rams. BenNaNa is an unusual ice cream stick with a peelable jelly shell that shapes the ice cream, which is eaten just like a real banana. Because of its playfulness, BenNaNa is the No. 1 kids’ brand in China and is also popular among young consumers. Five Rams, a local brand that has been based in Guangzhou for more than 50 years, was licensed by Nestlé in the 1990s. As a regional brand, Five Rams is the category leader in Guangdong province.

Nestlé started using social media in 2012. For the first two years, the company confined its social marketing efforts mostly to Sina Weibo, as it had tested other platforms but did not find any that generated good performance. Starting this year, the Nestlé marketing team added WeChat to its social spectrum and gradually shifted its efforts to this rapidly growing mobile social platform.

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Possible Ways To Monetize WeChat

Mobile messaging apps are super-hot, but it’s still early days for monetization. WeChat, the largest mobile social platform in China, has been focusing on building a large user base globally and maintaining stickiness by upgrading its functionalities constantly. With the strong support of Internet giant Tencent, monetization is not an urgent concern for WeChat yet, but it has paved the way for many monetization options.

There are three options that could work well in monetizing WeChat:

  • Mobile gaming. Online gaming is Tencent’s best strength and the primary source of its revenue, so it’s natural for the Internet giant to want to transfer that strength to mobile. For example, when Tencent launched its first WeChat game, the Candy Crush-like Tiantian Ai Xiaochu, it soon became the most downloaded game in the app store. In-app purchases in games will become an important money generator for WeChat.
  • Mobile commerce and payments. Selling products on the WeChat platform is not new; last year, local smartphone brand Xiaomi sold 150,000 units in 10 minutes on WeChat. But with the successful launch of the new WeChat Payment service and its cooperation with JD.com, China's second-largest eCommerce player, mobile commerce and payments will soon become scalable on WeChat.
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The Ongoing Loyalty Battle Between Taxi-Hailing Apps In China

Taxi-hailing apps like US-based Uber and UK-based Hailo are gaining momentum globally. As with other segments of the Internet industry, the taxi-hailing app market in China is also mainly about local players. After rounds of fierce price battles earlier this year, two players — Didi Dache and Kuaidi Dache — continue to dominate the market and leave no room for smaller competitors and newcomers. This battle wasn’t just between two niche apps; it was also a struggle between two Internet giants’ mobile payment services: Tencent’s WeChat Payment (for Didi) and Alibaba’s Alipay (for Kuaidi).

Price wars may be an effective way to acquire new customers. For example, Didi went from 22 million to 100 million users in just 77 days by spending RMB 1.4 billion (about US$225 million). That’s less than $3 per new customer. However, it’s a poor strategy to gain customer loyalty. For months, users have switched back and forth between apps simply because of slim (and temporary) price differences. Only recently have Didi and Kuaidi begun to take different approaches to engendering customer loyalty:

  • Kuaidi adopted a loyalty rewards program in cooperation with marketers and eCommerce platforms. Based on the number of rides they complete in a given quarter, Kuaidi divides customers into five loyalty categories: Normal, Silver, Gold, Diamond, and Ultimate. Customers earn different numbers of points for each completed transaction, depending on their level. They can use these points to purchase coupons — either Kuaidi Coupons, good for a discount on their next taxi fare, or other coupons provided by marketers and eCommerce platforms such as benlai.com.
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Introduce The Marketing RaDaR To China

Marketers in China are becoming more aware of the effectiveness of their marketing spending. They will no longer blindly spend a lump sum on China Central Television’s ad auction, for example. Home appliance giant Haier Group recently announced that it will stop spending on traditional magazine ads and maintain paid editorials only.

As Chinese consumers increase the time they spend on new channels such as social and mobile, it's more important than ever for marketers in China to optimize all touchpoints to reach and make an impact on their target audiences, especially when it comes to the new challenge of multichannel and multiscreen orchestration.

My recent report Sharpen Your Mix In China With The Marketing RaDaR illustrates how the RaDaR framework (first introduced by my colleague Nate Elliott) can help marketers successfully prioritize resources across their entire marketing mix in China.

RaDaR refers to “reach and depth and relationship” — three types of channels. Smart marketers are beginning to embrace a four-stage customer life cycle, from discover, to explore, to buy, to engage, then back to discover, and different types of channels support different stages of the life cycle:

  • Reach channels support discovery. Chinese consumers use channels such as in-store promotions and online search to discover brands.
  • Depth channels support exploration and purchase. Chinese consumers use channels such as consumer review sites and friends’ recommendations to research products and services they want to buy.
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What’s Next For WeChat?

As mobile messaging apps become increasingly popular across the globe, China’s WeChat (the top mobile social app in China, which has reportedly surpassed 600 million users) is often compared with other mobile messaging apps, such as WhatsApp and Japan’s Line. Of all such apps, WeChat has the most complicated features; it goes beyond messaging and keeps adding new features and further evolving existing ones. Among the many possibilities, three stand out:

  • Exploring location-based business. Chinese consumers have been using WeChat’s QR code functionality for a while to get discounts and rewards from offline stores. WeChat also has an advanced scanning feature, the street view scanner (available for the Chinese version of WeChat 5.0 or higher only). The scanner not only shows street names but also nearby stores, restaurants, movie theaters, and other locations. WeChat has recently cooperated with Dianping (China’s Yelp) to upgrade its location check-in feature on Moments (WeChat’s timeline, on which users share photos and texts) from cities to specific stores. WeChat’s successful cooperation with taxi-hailing app Didi Dache has also enhanced its location-based capabilities. All of these features pave the way for WeChat to be able to provide location-based marketing.
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How To Reach Your Unique Mobile Audience In China

Does mobile mean on-the-go? That's not always the case, especially for Chinese consumers. My recent report, Chinese Mobile Consumers Are An Attractive But Unique Audience, tells how mobile marketing differs in the largest smartphone market in the world.

Marketers see great potential in Chinese mobile consumers for three reasons:

  • It's the largest smartphone market in the world, and it's growing fast. According to Forrester’s global smartphone forecast, China’s smartphone installed base will pass the 500-million mark in 2014, more than the US and Western Europe combined.
  • The number of mobile Internet users has skyrocketed in China. It surpassed the number of PC Internet users in June 2012 and is growing twice as fast as the number of overall Internet users. In 2013, the mobile Internet population accounted for more than two thirds of the total online population in the country.
  • Chinese consumers appear to be among the most sophisticated mobile users in the world. According to our Consumer Technographics® data, more than half of online metro Chinese mobile users access the Internet via their devices several times a day, and a quarter daily. These numbers are higher than those of even major metropolitan cities in the US and UK. Metro China also takes the lead in advanced mobile activities, including social networking, downloading and using apps, purchasing products, and checking finances.
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Why WeChat Is Not A Good Marketing Tool — Yet

WeChat (Weixin in Chinese), the hottest mobile social app in China, now has more than 600 million users. Because WeChat dominates mobile Internet usage, marketers are putting high expectations on its marketing potential. However, WeChat is not a good marketing tool yet for most brands, as it has several limitations:

  • WeChat has core features of privacy and one-to-one communications. User behavior on WeChat is very different from on Weibo. The information that users share on WeChat is private and can be seen only by personally approved friends; as a result, WeChat is used more as a communication tool for friends to keep in contact. Users are less likely to repost brands’ information massively, as marketers expect them to do on Weibo.
  • Branded accounts have restrictions in sending messages. There are two types of public accounts — service accounts and subscription accounts — that marketers can use to send one-to-many messages to their WeChat followers, but each type has restrictions. A service account has custom-menu functionality that works almost as a mini-site embedded in the WeChat platform, but it allows only one message per month. A subscription account allows, at most, two messages per day, but with less advanced functionalities. In addition, all subscription accounts are folded together, so it's hard for users to notice new messages.
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Are Your Social Marketing Efforts Competitive In China?

Too often, marketers wonder whether their social marketing efforts are keeping pace with those of their peers. Marketers in China are no exception. My most recent report, Benchmarking Social Marketing Efforts In China, will help them find the answer and optimize their social marketing strategies.

Overall, marketers in China show lots of faith in social media. Thirteen of 22 marketers we surveyed say they will increase their social media budget more than 25% in 2013 compared with 2012, and seven of them will increase it more than 50%.

However, they report only moderate satisfaction — on a scale of 1 (very dissatisfied) to 5 (very satisfied), we found an average satisfaction rating of 3.4 with the social tactics they are using and an average rating of 3.27 with social platforms. Based on these adoption and satisfaction ratings, we have categorized the social tactics and platforms that marketers use in China into four groups:

  • Essential: high adoption and satisfaction. These social tactics and platforms, such as branded social profiles and Sina Weibo, are marketers’ ideal choices.
  • Promising: low adoption but high satisfaction. These social tactics and platforms, such as Douban and reviews on companies’ own websites, are emerging, and their marketing value is not yet proven, but satisfaction among marketers now using them bodes well.
  • Overvalued: high adoption but low satisfaction. These social tactics and platforms, such as Renren, while widely used, fall short of marketers’ expectations.
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How To Measure Your Social Media Efforts In China: Which Stage Are You At?

Are marketers in China measuring social media properly? Our data says NO. Marketers, if you are wondering at which stage you are for social media measurement and how you should improve it, the report “Social Media Measurement In China” is right for you.

In the report, we surveyed interactive marketers in China and found that most marketers are still at the early stage of social media measurement.

  • Social measurement is not new but very challenging. Nearly every social marketer we surveyed is measuring their social efforts. However, most consider effective measurement to be their top challenge in social marketing.
  • Marketers are measuring the wrong things. Most marketers we surveyed in China say increasing brand favorability is their primary social marketing objective, but most don’t conduct brand-impact surveys to measure it. Instead, the top three metrics that marketers use are number of fans/followers, number of comments, and number of shares.

We state in the report that marketers in China mature through three stages of social measurement:

  • Stage 1: Measure volume metrics, such as number of fans and number of shares.
  • Stage 2: Measure engagement, such as participation rate and fan activity.
  • Stage 3: Measure business success, such as brand awareness and sales contribution.
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