Australian brands looking to tap the Chinese digital consumer have their work cut out for them developing an understanding of the Chinese consumer, laws and regulations around exporting goods and, most pertinently, getting a grasp of the Chinese media landscape.
“China is a very developed market so the marketing and communication principles are much the same,” said Paul Waller, Head of Investment Strategy at MediaCom China. A UK expat, Waller spent 10 years working in media in the Australian market before moving across to China. He says the greatest factor having an impact on the media landscape is the sheer size of the market.
“The population of China is 1.3 billion and that is a huge number,” said Waller. “There are so many cities you wouldn’t have heard of that have more than 10 million people living in them. There are more than 100 cities have more than 1 million people living in them. That, for me, was a major eye-opening moment.”
As is to be expected, the scale extends to the media properties within the market. Waller said: “There are more than 3,300 TV channels in China so there’s not one AFL or NRL Grand Final where you’re guaranteed a large audience. Here you can book spots in different areas of China and they will each have different transmission signals. This creates a huge layer of complexity when you overlay the spillover of viewing nationally and even more so when you combine multiple media. But what it does offer is the ability for distinct and dynamic messaging whether that be by region, behaviour or simply if it’s a drama or a variety show. There are lots of different ways to tailor marketing and communication. There is no one set way.”
In addition to TV networks, there are also the famously well-established e-commerce offerings such as Alibaba’s Tmall. James Hudson, Director of Corporate Affairs and Marketing ANZ, Alibaba Group said: “We have more than 450 million consumers on our platforms in China so it’s a huge and growing market.” Already there are around 1,300 Australian brands using Tmall and Tmall Global’s B2C platforms in addition to another 55,000 exporters on Alibaba.com.
Hudson said: “The biggest question for many businesses is, ‘I understand the opportunity, where do I start?’ It’s about how to access resources that are going to help upscale and enable the business to make decisions about what to do next.”
MediaCom’s Waller believes one of the key resources is trusted partners to help navigate the media landscape. He said: “Realistically, it’s having someone in China that can help to navigate the landscape as well as any of the government procedures and regulations there might be because that will vary quite significantly depending on what goods you are selling.”
The mobile opportunity
Brands looking to target the Chinese netizen, according to Waller, need to think personalisation. And the uptake and usage of smartphones is light years ahead of other markets. “The growth of the internet jumped over the PC and went straight to smart phone. The majority of people use their phones to watch TV as much as anything else,” said Waller.
With a huge population with an unstoppable smartphone addiction, mobile advertising is also growing at a rapid rate. Sidney Song, General Manager, Data and Technology Solutions for Publicis Media Group China, said: “Two years ago the budget for mobile advertising was actually pretty small – around 5 to 10%. But by the end of 2017, the share could be 30 to 40%.”
However, mobile advertising is not without its challenges in China. The gatekeepers in the market are the telecommunications companies. Song said: “Chinese telecom carriers, they do have some data. The data they have is pretty valuable because they have several kinds. One kind is telephone numbers, IMEI numbers, or device ID’s. Another kind of data they have is digital netizen behaviour.”
This veritable goldmine of data is the stuff of marketers dreams yet Song says the information is highly regulated with the providers and advertisers having to adhere to strict privacy policies. There are also some misconceptions around what can be done with the data.
Song said: “In China, advertisers are very curious about what data can do but the problem is that there are a lot of rumours that make them confused. For example, if they have a lot of customer telephone numbers, they want to know what they can do to advertise to this audience. But it is very difficult to merge or combine the data between the telephone numbers. So we need to educate our advertisers.”
Education around is data is key with Song adding: “There are a lot of gaps in this market because people have different understandings on data. So what I need to do is tell them what exactly data can do and what kind of methodologies can be leveraged to use this data to help them best optimise their digital marketing performance.”
Another issue in the Chinese media landscape is traffic fraud. Song said: “It’s hard to get an exact number for the share of fraud in our traffic because we do have some bot traffic but the mainstream fraud is not by bot. It’s by human beings.” Song says Chinese businesses have sprung up that see teams of people operating multiple smartphones downloading apps and clicking on ads. As smartphone penetration grows in China, fake Android IDs and proxy servers are also driving the installation of unverified apps making mobile fraud a major challenge in the market.
Still, despite these issues, Alibaba’s Hudson sees a major opportunity for Australian businesses able to get their heads around the unique media landscape. He said: “We’re connecting with a lot of new brands. We see that growth as a really important part of the new economy in Australia and we can help connect those brands to new markets.”
Hudson sees the best way forward to get more Australian businesses up and running in China. He said: “The way to overcome this is to get more SMEs into the market, get them to meet people, to think about bringing on a Chinese background team and listen to their teams to help understand how things work.”