Mark Tanner
17 July 2013 0 Comments

Chinese consumers go online more than any other information channel to find out about products and services.  Ipsos research in 2012 found that 38% regularly increase their brand awareness and 48% increase their purchase intent through a company website; less than 32% do the same through state-run TV, newspapers and radio. There has been numerous research backing this up including Accenture’s April 2013 survey confirming the Internet as the channel most consumers turn to when looking for information about a brand or company. With that in mind, it is remarkable how many businesses targeting Chinese consumers still have poor websites.

Creating and maintaining a China-optimised website is essential, but it won’t guarantee you’ll be inundated with Chinese consumers visiting your site. Search engines, integrated social media, eCommerce if you’re selling online, and supporting offline marketing initiatives are all important pieces of the puzzle. The ever-moving target of search engines has shifted a little this month with market leader Baidu’s share continuing its slide, as well as Google’s share in China. As Baidu still accounts for two thirds of unique visitors to search engines, it should be a key part of search engine strategies. And just because Google has dropped to around 2% of search engine traffic, it can still be an important search engine to focus on for certain categories. Qihoo is unquestionably the rising search star. Its share continues to grow to 16.6% of unique visits, and its strengths in mobile will see it do well in this much-used channel. Sogou is also one to watch. There are other online search channels often overlooked that account for more traffic than all the search engines combined for some product segments, but we’ll keep to search engines today.

For those selling from your websites or social media, you may be interested that Baidu and Sina now have licenses to offer online payments within China – in the hope of challenging Alipay’s 46.3% market share and 800 million users. Tencent’s Tenpay is likely to build on its 20.3% market share through the online and offline payments it is trialling with WeChat.

Successful marketing campaigns in China are unlikely to be built on any one channel alone, and below you’ll find the usual news and views across those channels. But before that, we’d like to say a big thanks to our readers who’ve taken the time to give feedback about The Weekly China Skinny. Your suggestions have been taken on board and now if we link to pages that won’t work inside the Great Firewall, we’ll label them with [outside China].  Articles requiring a paid subscription will be noted with [subscription].  If you have any other feedback, please drop us a line.  We hope you enjoy this week’s Skinny.

Chinese consumers Chinese Consumers

Infographic: Are China’s ‘Losers’ Really Winning?: Is it becoming cool to be poor, ugly and antisocial in China?

Asia-Pacific Most Label-Conscious In The World: 61% of Chinese consumers say they’d pay more for designer products (44% globally). 74% expect to spend more on designer goods this year; more than any country. 72% agree adverts will increase their preference for a brand and 68%, the decision to buy it.

Brands and Chinese Worldview: Chinese youth have a much more emotional relationship with Internet, because offline media is so regimented. Digital is providing engagement and participation platforms for brands to build sustained relationships with consumers over time.

Chinese Internet Internet, Mobile & Social Media

Painful Drops for Google and Baidu in China Search Engine Market: Baidu’s share of online search dropped a couple of percentage points in June to 69.4% of page views and 65.7% of unique visits. It was over 80% a year ago. Qihoo, number two, was up with 15.3% and 16.6% respectively, Sogou was also on the rise. Google’s slide continues as it hovers just over the 2% mark.

Qihoo a Winner in China Mobile Wars: Citibank picks Qihoo to become a mobile leader in China, with 275 million users of its mobile security products and its market-leading mobile apps store. Going forward it will do well with mobile search, display ads and as an eCommerce aggregator.

Baidu, Sina Enter Online Pay Market: Baidu and Sina are throwing their hats in the ring to take on the giants Alipay & Tenpay in the third party online payments arena. Alipay accounts for 46.3% of the market with 800m registered users. Tenpay is 20.3% with 200 million.

Tencent Puts Payment App on WeChat: Tencent is bringing online and offline payments to WeChat to compete with Alibaba and win a share of China’s third-party payments which were ¥10 trillion ($1.6t) in 2012. It hopes eCommerce will help counter flattening advertising revenues. No launch date has been announced, but some developers already have the beta.

China’s Next Chapter: The Rise of the Generation-2 Consumer: 5-min vid from McKinsey: The Internet is the shining example of the new China, where local companies have achieved global status with no Govt intervention. It is allowing businesses to reach scale in a controlled manner, with low fixed costs and a low physical footprint. The efficiencies of the eCommerce channel are likely to create interesting world-first ecosystems in China going forward.

Lionel Messi: WeChat Hires World’s Best Footballer as TV Ad Star: WeChat signs legendary footballer Messi to front its ads. Messi is the most popular footballer on Weibo with more than 16m followers, and outside of China he’s even bigger. Tencent hopes he’ll help drive their global expansion ambitions as overseas users hit 70 million.

China’s 400 Little-Known Phone Makers Take on Samsung, Apple: Chinese consumers switch smartphones every six months on average, compared to every two years in developed markets. 296m smartphones priced above $450 are forecast to sell in China this year, up from 235m in 2012. Smartphones less than $200 will surge from 234m in 2012 to 400m units this year, and 685m in 2015.

Baidu Pays $1.9 Billion in Biggest Takeover to Gain Mobile Share: Baidu buys a bigger share of the mobile pie with the $1.9 billion takeover of China’s most popular third party smartphone app store, 91 Wireless.

Chinese food and beverage Food and Beverage

Raft of Food Safety Scandals has Shaken Chinese Consumers: A round up of China’s main food scandals since 2005, including the recent polluted water and fish saga from mines in Southern China, similar to Time magazine’s 10 reasons not to go local in China.

Straws Removed From Sale After Fears of Health Risks: It’s not just some of China’s food and drink that’s bad for your health, but the tools to consume them – straws that could harm the digestive system and liver and lead to early puberty, infertility and even cancer are being investigated [subscription].

Chinese Sport Sport

NBA’s Wade in China to Promote Sneakers, but Supply is Short: Li Ning’s $100 million 10-year sponsorship deal of Dwyane Wade will provide even more value since Miami Heat became NBA champs in June, but the Li Ning Wade shoes are elusive for many consumers in China and abroad. 

Chinese food and beverage Entertainment

China Sites Embrace British Invasion: Chinese are increasingly taking to British TV shows. In the space of a few years, from virtually no following, they now account for 9% of foreign TV discussions online, versus 28% for the Koreans. On sites with a wealthy & well educated youth demographic, it’s as high as 13%. Coronation Street tours, you might want to start offering instant noodles en route.

Mining Titans, Movie Moguls: Macau’s Junket Operators Branch Out: Much of Macau’s $38 billion gaming revenue last year (six bigger than Vegas) came from its VIP junket system, where licensed middlemen acting for casinos attract “big whale” spenders, arranging everything from travel to accommodation to gambling credit. Revenues are already up 15% for the first half of 2013.

Chinese health and beauty Health & Beauty

China Probes 60 Drugmakers in Effort to Curb Drug Prices: First it was dairy, now it’s drugs. 27 companies, local and foreign, are being investigated by the National Development and Reform Commission for costs and 33 for pricing in China [outside China].

Chinese Pollution & Environment Pollution & Environment

Army Chemical Specialist’s Formula for Fast Business In China: It’s big business in China if you can address real consumer needs – 3 million air cleaners sold in the Mainland last year, up 50% on 2011.

Chinese luxury Luxury Goods

Online Chinese Luxury Consumers: 37 million middle class Chinese now buy luxury goods, although the industry is taking a hit. 70% of luxury consumers search for them online at least once a month. 62% travelling abroad purchased luxury goods.

Chinese Consumers Boost Burberry: Male accessories, including fragrance and beauty are proving a boon for Burberry in China and helping compensate lower clothing sales.

Tier 1, 2 & 3 Cities in China, Which Comes First for Brands?: In western China’s Tier 3 cities, 8.4% more consumers have been searching for luxury brands in recent months. 4.8% more did in the eastern Tier 1 cities. Don’t go closing stores in the east just yet though.

That’s The Skinny for the week!  China Skinny would love to help with your marketing, websites and other online initiatives or research to take advantage of China’s opportunities.  Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weekly’s right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.