Guest comment: Targeting the emerging online market in China

The vast Chinese market with its new-found prosperity combined with a pent up demand for consumer goods, can potentially offer huge rewards.  However, in order to achieve online success in this unique market, it is essential to understand its complexities.

China is the world’s third largest economy and despite a predicted slowdown, growth in internet marketing is expected to continue.  Internet usage in China has increased massively, partly due to the fact that computers are now more widespread and affordable.  This trend, combined with a similar proliferation of mobile phones and readily available broadband, means usage is likely to continue to increase - only 20% of Chinese people currently have internet access, so the potential for growth is still huge.

To take advantage of this, European marketers must adapt their campaigns in line with the country’s unique culture and plethora of languages. Although Mandarin is the official language with over 885 million speakers, there are many other variations such as Cantonese, Wu and Min, each with over 60 million speakers.  There are also two variations of written mandarin – traditional and simplified.  The simplified format is the one predominantly used in mainland China, however traditional is used in Taiwan, Hong Kong and other overseas communities.

When targeting such a vast territory (China is the fourth largest country in the world), marketers should break it down into key areas.  For example, 44% of the population lives in urban areas with over 20 million in Beijing which currently accounts for a third of the Chinese internet market.  Thus, it makes sense to focus an online campaign on major cities such as Beijing and Shanghai.  Usage is also high in other Chinese speaking regions – for example 60% of Taiwan’s 23 million population is online. Therefore, it is worth considering trialling Chinese language campaigns in Taiwan, before entering the more complex Chinese market.

Baidu is Most Popular

Baidu is by far the most popular search engine in China, with 70% market share compared with Google’s 20%.  Created in China in 2000, it is a Chinese language search engine, returning purely Chinese results, which is why explains its popularity.  Chinese speakers living elsewhere are more likely to prefer Google, as it does offer some results in English and other languages as well as Chinese.  Other Chinese-speaking regions such as Taiwan and Hong Kong, prefer Yahoo and Google, partly for political reasons as Baidu is based in Beijing, but also because it uses the simplified characters rather than traditional ones.

As in the West, a large number (about 30%) of internet users are in the 18-24 age group, however if Western trends are repeated in China, the country is likely to see an increase in older users in the coming years.  This current situation links with the most popular use of Baidu - for music searches and music downloads.  In fact, Baidu has had to deal with a couple of court cases brought by record companies, unhappy with how music has been made available to users.  Online shopping is also hugely popular and the number of online payments is increasing – although currently only 20% of the population has a credit card, which will obviously reduce the amount of transactions which can be carried out online.

Another issue which must be considered is the problem of internet censorship. Perhaps the most widely known example is Tiananmen Square – no references to the massacres there will be found anywhere on Chinese Internet.  Also, many global news sites are banned – the BBC has been on many occasions – and there were repeated problems with censorship during the 2008 Olympic Games. 

Marketers need to be aware that paid search is often cheaper than SEO – the cost per click is lower than other markets, especially on Baidu, and, therefore, it is more cost-effective than focusing on SEO.  Also, local engines like Baidu offer much better value than Google – the average cpc is 0.03p on Baidu compared with 0.19p on Google.

As with all search marketing campaigns, the key to success is understanding the particular market and localising appropriately.  The Asian market has more users than any other continent with 44% of the global market share, and the Chinese internet market accounts for 39% of this.  China now has the largest cluster of online users in the world as well as positive prospects for further growth.  So despite the complexities presented by China’s size, diversity of languages and cultural differences, the huge potential it offers make it a worthwhile investment for Western marketers.

By Andy Atkins-Krüger

Managing Director

WebCertain

www.webcertain.com