Mark Tanner
29 June 2022 0 Comments

When you look at China’s advanced digital ecosystem today, it is hard to believe that China was late to the Internet game. As recently as 2011, just 38.3% were online, a rate achieved at least a decade earlier in most Western countries. Despite the relatively low penetration rates, 2011 was the year that changed China’s Internet. It was when WeChat launched, Internet-connected smartphones started selling for less than $100/pop in China and, arguably most importantly, Chinese consumers really found their voice online.

Prior to 2011, the vast majority of Chinese consumers sourced their news from state-run media outlets such as radio, television and newspapers. But on 23 July that year, two high-speed trains collided on a viaduct in Zhejiang province killing 40 people and injuring at least 192 others. It was the first significant incident on China’s new high speed network.

The impressive bullet trains were the symbolic showpiece of China’s modernisation drive, so some officials were keen to keep news of the crash to a minimum. Journalists were ordered not to investigate the the causes, and footage emerged of bulldozers burying the carriages and evidence. Whilst the train wreck received little airtime in state-media, there was a fledging social network called Weibo, where people didn’t hold back. Overnight, Chinese consumers who were starved of information and transparency on traditional media, joined Weibo hungry for information about the wreckage. Not only did they find information, but they also shared their views, in what was arguably the first time Chinese consumers had a voice en masse.

The tragedy had a profound impact on the development of China’s high speed rail network. It also increased the transparency of state media, and tipped more balance to the people and their views, setting off a series of online protests from demographics and communities who felt hard done by.

Things were clearly getting out of hand, because in September 2013 Beijing passed a law where anyone  making posts or messages that were “severe” breaches of the law could face up to three years in prison if they were viewed more than 5,000 times or forwarded more than 500 times. Any posts that were considered to be “damaging the national image” or “causing adverse international effects,” were punishable under the new law.

Countless users left Weibo overnight, retreating to the more private and less-viral WeChat as their main source of information online.

2013 was effectively a turning point for China’s Internet. Every social network was equipped with sophisticated algorithms and the government set up armies reportedly in the millions to monitor the online populace and ensure they were aligned to the law.

The laws did little to dampen the growth and innovation of China’s online ecosystem, with ecommerce, social media and entertainment flourishing over the years that followed, with innovations leading the world in many respects. But with a recent spate of uproars online from things such as the lockdown in Shanghai and Austin Li’s ice cream tank incident, clearly the authorities still aren’t 100% happy with the state of online affairs.

Last Friday, China’s internet watchdog proposed new laws mandating social platforms to review all user comments before publishing. The draft also proposes that the person who uploads a post is also responsible for the comments made by others. When the law is likely passed, it will again change the face of online behaviour in China, much like we saw in 2013.

Given the personal responsibility to monitor comments on your posts, it is likely that many online influencers will disable comments. This will obviously impact the virality of posts and influencers, which will in turn, have an impact on brand endorsements and advocacy. Weibo will obviously be hardest hit, but popular videos on Douyin can have over 10K comments. Similarly, posts on Red and Bilibili can have thousands of comments and Zhihu can be in the hundreds.

Like in 2013, Chinese consumers will be more likely to spend time on private networks and groups where there is a perception of being able to talk more freely. Chinese consumers already spend 1.5 hours a day on average in the private domain sector. More than 58% of Chinese firms have touched users through private domains, but foreign brands have been slower in their uptake. We’d recommend considering this as part of your strategy in China.

On the bright side, execs from China’s tech giants are reporting more rational tech regulations than what we’ve seen since late 2020. This positivity has been echoed by funds such as JPMorgan who are more bullish about the China’s tech firms‘ ability to keep growing, innovate, and ultimately present more opportunities for brands.

Marketing in China will never be straightforward, but for brands who adapt to the ever-changing tech and regulatory landscape stand to benefit from its enormous opportunities. Contact China Skinny to learn how we can assist in doing that. We hope you enjoy this week’s Skinny.

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