Social Media in China

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The importance of social networks in China as a marketing channel is steadily growing – especially for European companies. Differences in culture and structure, though, make the market difficult to access.

More than 457 million people in China use the Internet – representing the world's largest number of Internet users within a single country. Many go on the Internet at one of the country's more than 130,000 registered cyber cafes.More than half of the Internet users in China – 303 million people – access the web via their mobile phones. Even though facebook represents the largest social network in the world with nearly 645 million users globally, the Chinese networks also impress with huge numbers of users: QZone is the largest Chinese social network with 492 million users, followed by RenRen with 160 million and Kaixin with 90 million users. The most popular instant messenger QQ has a user base of 648 million people. While China’s social networking sites of choice may be Sina Weibo, RenRen, and Kaixin instead of twitter, facebook & Co., social media here has a far greater penetration rate among an obviously larger population than countries in the Western world. Also, one only needs to consider the fact that two-thirds of the population are not yet online.

These numbers are a great opportunity for brand companies to turn these Chinese “netizens” – the majority of whom are living in top-tier cities – into customers. However, the Chinese social web behaves very differently than that of the Western world. For instance, two clearly distinctive netizen groups can be found in China: blue and white collar workers. Due to their different financial and economic means, the ways in which these groups should be catered to is also different. For example, most of Kaixin’s users are white-collar workers who can upload photos and write blogs and microblogs. QZone, on the other hand, attracts students and general users who are able to post to blogs, share photos and music and interact with other users.

Differences in web use:
The term "Bulletin Board Systems” (BBS) comprises forums, vertical communities and blogs. They have become a phenomenon distinguishing China’s internet from the web in other markets. Almost every second user runs his or her own blog, and over 90 percent of Internet users read these types of websites regularly – they thus represent a favorite destination in the web for most Chinese netizens. In addition, Chinese users show a higher level of commitment by uploading content such as images and videos more often than users in Western countries. This effect is often triggered by downloads, which are, in most cases, only allowed if the user has previously uploaded his or her own content.

Differences in the business model:
In China, social media takes on a completely different role compared to Western countries: They are first and foremost businesses and most networks in China are highly profitable. Setting up fan pages, connecting them with APIs and developing target-group specific "apps" are all part of the media budget that needs to be negotiated with each platform. The users, in turn, are rewarded for every form of activity on the network – with a number of highly effective types of virtual currencies, which generate up to five billion U.S. dollars per year in revenues for their developers.

Another indicator of the importance of social media for brands is the ever-increasing online ad spending in China. Between 2009 and 2011, this spending nearly doubled to 4.6 billion U.S. dollars. This opens up huge potential for European brands, e.g. with Volkswagen operating the largest brand channel with about 2.5 million fans on Kaixin.
Campaigns create enormous buzz through viral dynamics. For example, Volkswagen integrated "virtual VW car models" into an online game on Kaixin – and within 24 hours, was able to increase their fan base by one million fans, and at the end of the campaign, by two million.

For such a success, a sufficiently large media budget is required, coupled with profound connections to the social networks, as well as expert knowledge concerning the range of success factors for a Chinese campaign and Chinese consumer behavior. Here it is important to gather expertise in China itself. To facilitate access to the promising social media segment for European companies, for example, Berlin consulting firm trommsdorff + drüner opened its Chinese office TD Marketing Consultants in Beijing in early March. One of the two agency founders, Prof. Dr. Trommsdorff, teaches at the Shanghai Tongji University. The new branch of trommsdorff + drüner is growing rapidly, with a new office in Shanghai already being planned. Managing Director Prof. Dr. Drüner is convinced that "European brands in China have great opportunities, because they already enjoy excellent reputations here. Social media allow the brand to create awareness and increase their brand value efficiently. Reward mechanisms and collaboration with popular key opinion leaders, such as bloggers or celebrities, are highly effective tools in helping to catch Chinese netizens. The activation potential is enormous!"

In other words, expertise regarding the Chinese market is key, for structural and cultural differences in China often prove to be major obstacles for European companies when entering the social media landscape. One big difference between Western and Chinese social media is self-censorship, which providers exercise to prevent governmental actions. Online platforms check and monitor all contributions generated by users immediately. Larger platforms such as the automotive vertical XCar employ dozens of community managers who review user content within minutes and – if approved – release it to the web. The so called "real time web" is not really existent in China yet. For its part, RenRen is one of the most heavily censored social networking sites in China. Blog posts containing sensitive words like Tiananmen Square and Falun Gong are blocked or taken down.

Another specialty of the Chinese market is the already massive and steadily growing number of web users who primarily access the web via their mobile devices. Smartphones are becoming a must-have device, especially among affluent consumers in first- and second-tier cities. So to be able to convert these consumers into brand customers, mobile activities need to become an integral part of any digital strategy.

A new OgilvyOne Internet usage survey shows that social networking in China has become a cultural force, particularly among young professionals: 83% of survey respondents said that they had used a social network the prior day and that 87% have “friended” a brand. These are the kind of figures that one wouldn’t even find in the most advanced Western social networking markets. Moreover, peer-to-peer referral is king in China. By researching and engaging with key online bloggers, a large following can be reached within a specific product category. These findings reveal that a very avid part of Chinese society is avidly using social networking channels to converse with friends, share ideas and discuss brands. And the numbers of users are increasing every day – which are good news for European companies.

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