The Chinese market is renowned for its dynamism and innovation. In recent years, the evolution of the Chinese digital landscape has been both unique and complex. It sometimes appears as a silo or a black box for European brands, yet the local market trends warrant attention.
Major Shift in Digital Landscape
Discussing digital marketing in China, WeChat and Weibo were once the dominant platforms, akin to Instagram and Facebook. However, as of 2023, just having conventional channel on WeChat and Weibo is no highlight. Local marketers are more interested in their sales performance on Douyin, recent influencer collaborations on Bilibili, or their social campaigns on Red.
The digital landscape in China is rapidly evolving. We have pinpointed three significant transformations:
1. The prevalence of video content is intensifying.
2. The more targeted platform algorithms are triggering considerable fragmentation.
3. Social commerce continues to unlock new trade opportunities.
These shifts have catalyzed unique business potentials. In recent years, the ubiquitous adoption of mobile devices and streaming content by the Chinese population has fostered a distinctive consumer behavior: making purchases while consuming video content. This trend has effectively transformed social media platforms into virtual shopping malls. Consider the immense commercial potential this presents: With a product to sell, all that’s required is a mobile device and a platform to live-stream. The platform’s algorithm will help you find your customers, and its technology will facilitate trades within seconds.
In the first ten months of 2023, TikTok’s Chinese counterpart, Douyin, reportedly sold almost RMB 2 trillion ($274.2 billion) of goods via e-commerce, marking a 60% growth year-on-year. Remarkably, the volume surpasses the GDP of Germany’s largest city.
Rapid changes present sizeable challenges, and major opportunities often bring intense competition. In China, be agile is imperative. Thanks to our clients who always require responding rapidly to the shifts, we have always managed to adapt their China strategies to stay competitive and have accumulated extensive industry insights on the way.
Challenges in Sport: Pure emotion to team up with creativity in video
Take football, for example. Thanks to its effort in ongoing emotional local content and fan dialogues, back to 2016, FC Bayern has already built a huge loyal community and become one of the most engaging European football clubs on China’s social media platforms like Weibo and WeChat. However, as platforms evolve and become more segmented, Weibo and WeChat are no longer the sole mediums to reach all football fans in China. To cater to the local prevalent trend in video and to the brand’s global strategy targeting a younger audience, in late 2021, we pioneered in launching its official channel on Bilibili – the video platform where Generation Z dwells on over 100 minutes every day. With this swift, crafting daily content became more demanding, as the audience always requires a local creative narrative alongside football’s emotional appeal. But the investment in local creativity proved beneficial: Average engagement on Bilibili now outperforms Weibo by tenfold.
Consumer Brands: Building community amidst the fragmented markets
For consumer brands, the complexity of China’s digital platform ecosystem presents considerable challenges. Their primary question is how to reach prospective consumers efficiently while adhering to a reasonable budget plan. The business opportunity within China’s market is so large that numerous Chinese local brands are accustomed to annual budgets exceeding seven-figure Euro amounts. For new entrants, especially European brands, penetrating this competitive noise is not a straightforward task. Brands must strategize smartly, articulate their story from a unique perspective that respects the local culture, and really be focused on their target audience. Fortunately, social media facilitates them in managing this task. It allows for precise audience targeting, enabling brands to build and engage a loyal community without becoming lost in the sea of 1.4 billion potential customers. But at the same time, the challenge of identifying target audiences is a dynamic process which requires established strategy being adjusted continuously.
For instance, we initially assisted the German beer Paulaner, in gaining recognition in the Chinese market by focusing on the large German football fan base and affluent German brand enthusiasts in China. Now, nearly a decade later, the challenge has evolved – Paulaner beer has already become a household name among FC Bayern fans in China, but it needs to capture the affection of China’s younger generation. This necessitates a new communication strategy leveraging distinct new digital platforms. But once this shift is successfully navigated, the rewards in sales potential, led by social commerce, are abundant.
Stay agile, stay adaptable
There’s no one-size-fits-all approach to mastering digital communication in China. For us, the key lies in continuously acquiring insights into the audience, platforms, as well as technological and societal trends. A deep comprehension of how platform algorithm functions, how consumer behavior shifts, and how key trends influence decision-making, empowers us to craft bespoke strategies for distinct client needs. This extends beyond sports and consumer brands to other sectors we serve, like SMEs, industries, and financial services.
In summary, the recent digital developments in China remain a source of excitement, presenting vast potential for both homegrown and international businesses. By staying adaptable to these shifting trends, this market continues to be a broad arena for innovation and sustainable growth.