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Searching for China’s digital consumer

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Allen Qu is a search pioneer and the CEO of Netconcepts, one of the largest online marketing agencies in China. The nine-year-old business has more than 300 staff in offices across five Chinese cities and services three types of clients: domestic Chinese companies, international businesses without major operations in China and Chinese manufacturers that sell their wares globally. Ahead of his presentation at the Access China Summit, Allen outlines the top mistakes non-Chinese brands make when looking to reach China’s digital consumer.

Failing to understand the Chinese internet landscape

While China has the largest internet population and also the largest e-commerce market in the world, we also have a very different internet environment to other markets.

Around the world, you have Google, Facebook and Amazon, but in China, Google does not work. Facebook, Twitter, YouTube, all of these websites either cannot be opened in China or they are banned in the country. Therefore it’s a completely different environment. Instead of Google for search, we have Baidu and Sogou. For social media, we have WeChat. Instead of Twitter, there is Weibo. When it comes to messaging apps, WeChat is the most heavily used app in the country followed by Tencent’s QQ.

The internet environment is different, but, by principle, it is similar to Australia in terms of functionality. The algorithms of the various search engines are similar, also, but there are some differences to be aware of. In order to get started, the first step for Australian businesses looking to reach the Chinese digital consumer is to develop an understanding of the players in the space.

Hosting 101

There is one policy in China that Australian companies cannot ignore when looking to have an online presence in the country and that applies to website hosting. Chinese law stipulates companies have an ICP License. An ICP License is a permit issued by the Chinese Ministry of Industry and Information Technology. It gives a business permission for its website to be hosted in China. Without one, legitimate Chinese hosting companies won’t allow a website on its servers.

Once you’ve got an ICP license, you must host your website in China. Numerous Western companies have their websites hosted overseas but that’s not legal in China.

It’s a common mistake that somewhere between 70 to 80% of Western companies make and it’s something you have to solve if you really want to tap into the Chinese market.

Getting to know the Chinese consumer

Much like the internet landscape, Chinese consumers are different to their Western counterparts and Chinese internet users are quite different as well. Their consumption of media is unique from other markets and often this presents a challenge for Western companies.

According to the China Internet Network Information Center (CNNIC), the mobile internet population in the country has surpassed 695 million people and 95.1% of internet users in the country used a mobile device to access the internet in 2016. My comparison, 84% of Australia’s 24 million people own a smartphone according to Deloitte.

This has a flow on effect in your marketing efforts to things such as content. Advertisers need to think scale and mobile first in ways that aren’t necessary for other markets.

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Only focusing on Baidu

In the past, search in China was all about Baidu, much as it is all about Google elsewhere. Baidu is still the dominant search player in China with around 60 to 70% of market share but there are other players to be aware of. In recent times, many companies optimised their efforts on Baidu and while they still need to take this into account, there are other search engines that cannot be ignored. Although their market share is not as much as Baidu, they have unique uses.

For example, Sogou is the second largest search engine in China. It has about 20% market share. It’s obviously much less market share than Baidu but it has the most popular Chinese input system. Many companies are now trying to integrate search functionality into the Chinese input system. Because of this, there are a number of scenarios for which people use Sogou instead of Baidu. So you cannot ignore Sogou or just focus on Baidu.

Thinking search is limited to search engines

Nowadays people don’t just search on search engines. People also search on platforms such as WeChat or on video sites. People search everywhere. That’s why when it comes to search engine optimisation, you cannot simply focus on traditional search engines.

It used to be that if you wanted to find an answer, you open up Baidu or Google, you search a keyword, you click on the website. But now, people may find the information on WeChat or go direct to T-Mall to search for a product.

Research by McKinsey found that on average, Chinese consumers make 10 to 12 visits to online and offline touch points — search engines, product sites, bricks and mortar stores—before purchasing expensive items so you need to take into account the entire digital landscape.

Mobile is also a factor. A lot of people wrongly think that when it comes to the mobile age, people don’t use search that much, but actually mobile search is more common than desktop and laptop computer search. In today’s mobile age, people search the app store, for instance, for applications.

These kinds of new search scenarios are important for companies to consider as is reputation management. For example, if I want to buy a computer, I may purchase from T-Mall or a similar e-commerce website but I will always go to Baidu to search for user reviews. This means that online reputation management is becoming even more important for companies. Using a search engine to protect your reputation in the Chinese market cannot be overlooked.

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Allen Qu will be speaking more on this topic at the Access China Summit, a conference designed to facilitate sharing of knowledge and networks that help businesses succeed in the Chinese market.

Visit accesschinasummit.com.au to view the full agenda which includes speakers from Alibaba Group, Publicis Media China, Weibo, Tourism Australia and more.

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