Marketers, sales managers, product developers and strategists the world over are increasingly using data to help form decisions. Fortunately in China, we have a greater depth and breadth of data than anywhere else. Not only do Chinese use their smartphones (and faces) more frequently, across a broader array of online and offline occasions, they are also among the least concerned about data privacy globally. China Skinny uses our own in-house tools to tap into China’s vast banks of data to provide macro and granular views of consumers’ preferences and trends. These can impact everything from communications, branding and product development, to the channels and influencers you use.
However, just blindly using data to drive decisions can be reckless and is often misleading. For a start, data can miss the emotional drivers that influence decisions – these are becoming increasingly relevant as branding and premiumisation gains importance. More importantly, data can be misleading due to the likelihood of your data being skewed by fakes.
Nearly a third of China’s internet traffic last year was rated “abnormal” according to a report by third-party advertising data monitor Miaozhen Systems. The resulting loss to advertisers alone reached more than ¥26 billion ($3.75 billion). Virtually every corner of China’s internet that boasts massive user numbers has developed a shadow ecosystem of fake engagement. They are trading money for clicks, followers, commenters and buyers. Late last year Alibaba estimated there were at least 2,800 organizations in China specialising in faking ecommerce activity alone.
Zombie Weibo followers usually go for ¥10 ($1.44) per 10,000 followers, although for a higher fee, brands can engage “advanced zombies” with avatars and content expressing fake opinions. Of real concern is that it isn’t just your fly-by-night operations buying fake engagement in China; many of the best-known brands have engaged with fake social media likes, forwards and comments to bolster their impression of popularity. This taps into the tribalistic follower tendencies of consumers.
Arguably China’s most in-demand KOL, pop star Cai Xukun, clearly creates millions of fake engagements to fuel his popularity. He isn’t alone. Around 70% online celebrity peers are estimated to forge their fanbase. Last year, Chinese state media CCTV reported that 90% of views generated by many popular shows on video sites are fake. On ecommerce, the long-used method of “brushing” remains common where brands ship empty parcels to bolster their sales numbers and positive reviews on ecommerce platforms.
In addition to the ill-gotten gains for brands and KOLs, China’s big tech platforms themselves often see opportunities in the fake economy. It is well known that ecommerce platforms engage fake sales – or do little to stop them – to artificially inflate sales numbers, drive buzz and attract investment. In the build-up to its IPO, popular ‘user-generated’ travel site Mafengwo has been tacitly allowing registered merchants to place fake orders in order to beef up their onsite rankings and attract more views. 30% of all orders on Mafengwo are estimated to be fake.
Data is a powerful tool to provide clues and clarity into China’s complex marketplace, yet brands should caution from using that data as gospel. In most projects we do, China Skinny cross references data with other sources of insights to ensure its robust and reliable. We’d suggest you do the same.
On a more wholesome note, if you’re in the food and beverage space, book yourself a flight to Melbourne on September 3-6 for the prestigious Global Table event, focusing on solving our biggest food challenges and creating tomorrow’s breakthroughs. China Skinny’s Mark Tanner will be giving the opening presentation for the China section, discussing China beyond 2020. More information here. Please let us know if you’ll be there, it would be great to have a chat. Go to Page 2 to see this week’s China news and highlights.