How to Begin Marketing in China

Marketing in China offers several opportunities. The overall market huge and wealth is on the rise – two factors that are especially attractive to international companies. That said, marketing in China can differ significantly from marketing in the U.S. as well as many other Western countries. Email marketing, in particular, offers specific challenges not common in the rest of the world.

General challenges:

• Several Chinese cities have populations larger than entire countries in the rest of the world. Shanghai alone, for example, has over 24MM people. So when marketers choose to enter China and spend money, they need to consider entering a specific city and concentrate on building a business in a specific area first. Cities are defined roughly by “tier” designations. The largest cities by both population and gross product are tier 1, the next largest, tier 2, and so on. Tier 1 cities tend to have the best infrastructure, both for Internet and, just as importantly, transportation. For this reason, companies that need logistics (warehousing, fulfillment, and so on), choose to start in tier 1 cities, then later expand to tier 2. Even experienced Chinese companies in industries like property and casualty insurance, wealth management, and even automotive have traditionally followed this pattern.
• For most U.S. or Western marketers, the Chinese online media world is completely different. There is no Twitter, Facebook, or Google. You will instead see Sina Weibo, QQ, Weixin (WeChat), and many more. Talking about Google, Facebook, or Twitter gets you a nice giggle about your ignorance of the marketplace.
• In larger cities, same-day delivery from web order to delivery is quite common. Commercial sites (including Alibaba’s Taobao) allow you to select a warehouse location to see if the item you want is in stock in the local warehouse for same-day delivery. Company offices have racks for deliveries of goods ordered online by employees.  You order what you need from a website in the morning, and it is delivered by the time you leave for the day. This is starting up in the U.S., but it is real on a large scale in China. You need to consider how you as a marketer can deliver on that expectation for many things.
• There is a lot of growth in China just because of the basic market trends – lots of people with rising wealth. To show growth, marketers don’t need to do a lot of segmentation and analytics around their best customers. Reach and frequency is still the rule. Marketing (and labor) costs are still at a point where optimization of marketing is interesting, but only if the price doesn’t outstrip the low cost of less sophisticated styles of marketing.
• Mobile payment is heavily promoted, and adoption is on the rise with companies like Alibaba, Tencent, etc. Several restaurant, convenience store, and cinema companies are helping increase that adoption by offering discounts when people use mobile pay. Marketers need to understand this landscape and determine how they will provide mobile payment and whether or not they will offer incentives for doing so.

In email specifically, there are some fundamental challenges to marketing in China, especially from outside of the country. While email is used, it is not as common a messaging platform for marketers. Part of this is because “CRM marketing” is fairly new in China. Second is the reality that social (WeChat) dominates these days for interpersonal communication, so a lot of the energy is spent there and on display. If you are going to email into China, you need to be aware of the following:

• Email is mobile in China. Look around anywhere and people are on their phones. There are equivalent upload and download speeds. People commonly watch TV on their phones. If the conversion funnel for your site is not optimized for mobile, you will have to address that quickly. That is true all over the world, but the problem is acute in China.
• Your social links will be useless. Given that many common U.S.-based social sites are not easily accessible from China, your Facebook, Google+, and Twitter links in email don’t work, so that is wasted space if your customer is in China. Either replace them with China-specific social links or use the space in a different manner.
• Images can take a long time to download. While upload/download speeds are fast, deep packet inspection for traffic originating outside of China is real and it slows things down significantly. Be judicious with heavy images, or better yet, host them inside China.
• Use a China-based ESP if you have a significant list in China. There is the very real situation of getting mail delivered. The major ISPs in China (Tencent, sina.com, QQ) have very low daily delivery thresholds. You may not notice this if you have a small audience in China, but if you have a substantial list in China, you will see a lot of bouncing. Return Path Sender Score Certification can help (Return Path  is very knowledgeable about the email market in China in general as well), but you may want to utilize an ESP inside of China. They will tend to have stronger, more direct and personal relationships with the ISPs which will help.

China offers a lot of opportunities for marketers given its market size. That said, marketers must learn the “Chinese way” and realize that China is a very different market that does not operate like the U.S. Marketers can look to China to see new ways that social is dominating and truly knocking out channels, the adoption of mobile payments, and how e-commerce is evolving to incorporate same-day delivery. There are a lot of great things happening in China today from a marketer’s perspective. Part of the challenge is knowing what is going on so that you can tailor your approach if you aren’t in the country.