The latest research about how to unlock the slowing China economy suggests internet marketing in China will be the key.
China’s economy is undergoing a massive slowdown, but digital channels and government strategy could be the key to getting the world’s economic power-house back on track.
According to a McKinsey Global Institute (MGI) report, the Internet could fuel some 7 to 22% of the incremental GDP growth through 2025, depending on the speed and extent of Internet adoption by Chinese enterprises. By that point, it could generate 4 to 14 trillion yuan in annual GDP.
Some 10 trillion yuan will be at stake in annual GDP by 2025, so capturing this potential will be critical for China’s future competitiveness, particularly as the country’s labour costs increase and its demographic dividend diminishes, the report found.
“In the restaurants and designer stores of Shanghai, the slowdown is palpable”, explains Digital Training Academy’s CEO Danny Meadows-Klue, speaking in Shanghai this week, “the economy has lost momentum at a staggering pace, but digital marketing strategies may hold the solution to the next turnaround”.
Meadows-Klue is clear that the way Chinese brands market themselves through Baidu, Weibo, WeChat and other platforms is years behind how firms outside China use similar search and social media sites in their own markets. “Part of the challenge is businesses simply lacking the right strategy, and part is the lack of skill within their teams to execute the plan. The good news is that these can be fixed, but until they are marketing teams will continue to miss the potential ROI from their search, social, and media budgets.”
The report focuses on a set of Internet applications that could penetrate more deeply across key sectors of the country’s economy, including big data; improved demand forecasting, online sourcing, and marketing; Internet banking and payment systems; the Internet of Things; and e-commerce.
In consumer electronics, for example, the critical factors will be growth in connected devices (such as smart home appliances and Internet TVs) and online media content.
Read the full report here