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Accessing the THREE HUNDRED MILLION USER Chinese online market.

Discussion in 'New Markets' started by Diamond Damien, May 16, 2014.

  1. Diamond Damien

    Diamond Damien Owner BlackHatWorld Staff Member Jr. VIP

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    The 300,000,000 user opportunity!

    Been thinking about the next gig for some of my consulting clients. Where can you find the growth that we used to enjoy back in the early days of the internet? The answer (as ever these days) could be China. Cracking this market and it?s ?Golden Shield? will be essential for growth over the next 2 decades.


    When it comes to selling online to China the basic theory goes:
    ?Never assume anything about how the Chinese online markets work. And don?t try to replicate what you?ve already done in the West.?
    The growth of Anglo-Chinese digital marketing agencies with offices in both the East and West can claim substantial and up-to-date insider knowledge spanning both cultures. Of course, the sheer scale of china's digital market is widely known: an estimated level of US$300bn in online sales were achieved in 2013 (up from US$210bn in 2012) 2014 is set to blow that away despite a slowing economy online is still growing, with 300m registered online consumers it?s a market you?d want to get into.

    How do you tap into the Chinese market?

    The good news is that Western and specifically heritage (British) goods have a strong advantage over other countries. The Chinese really appreciate their association with cultural heritage and quality and UK companies can play to that. But Chinese consumers still insist on validating any company and its products through social media. The idea is that in China Peer-to-peer recommendation is much more valued than among western consumers.
    It relates closely to the ancient cultural preference for collectivism and the resulting oft-cited guanxi system of working through close networks of relationships to ensure quality, a trait that is being leveraged in the west by a growing number of companies and their know your customer / social media recommendation policy. It also explains why, for instance, research shows Chinese urban consumers, albeit fast adopters of new media technology, get annoyed with mobile phone ads after three views.
    For Twitter and Facebook, which didn?t catch on in China, they have their own versions Weibo and WeChat. Not simply monetizing thorough Ads they have developed a position where consumers also buy, often large amounts, of product through them. Conversely for the B2B community, it?s Linkedin that has taken the lead in this growth area! To get into the mind and wallet of the Chinese growing consumer class western exporters must appreciate social media in China goes far beyond brand awareness.

    Tmall - where you need to be to sell in China.
    Linking all this together are the market sites. Tmall is the leader, a virtual B2C department store (including different ?floors?) along the lines of Amazon Market BUT MUCH BIGGER: on ?Singles Day?, the chinese equivalent of thanksgiving sales (the biggest shopping day of the year). On the 11 November last year, Tmall received 250m UNIQUE visitors!!!.


    Earlier this year Apple set up its stall in Tmall alongside many other international mega-brands and local sellers. Indeed its considered an effective entry point for new customers goods exporters and Tmall?s recent first-ever English language guide http://about.tmall.com/?spm=3.6635901.0.0.d9BImx#place shows its very keen to encourage them.
    Where credit cards and paypal are unpopular in China, transactions go through the highly efficient and dependable payments system run by Tmall?s owner, Chinese e-commerce giant Alibaba.


    Is there an alternative to Tmall?
    B2B exporters, and indeed many B2C players wanting to show more than Tmaills format allows, will want to set up their own website. Alongside the general benefits of localisation, hosting inside China is recommended. Among other things, the government's ?Golden Shield? often filters against undesired foreign content slows sites down to a crawl, even if you are squeaky clean.

    SEO in China? Google who? It?s all about Baidu

    Google search is a virtual non-starter: Baidu is the default search engine for 80% of users but be aware it?s much sophisticated. It?s essential to understand its deficiencies and work your SEO efforts around them. What works in the US won?t work in China, and vice versa. The basic design of the websites themselves shouldn't be too fancy. The most common browser used in China is one most users elsewhere have upgraded years ago, the worst of all IE?s Internet Explorer 6!. IE6 doesn?t cope well with flashy imagery and much more than a basic site which is why web design is pretty undeveloped in China, but that?s not to say it?s simple, creating a site to run well on IE 6 is an art in itself.


    Finally the lack of western style marketing and infomercials sits well with Chinese customers who have a much greater demand for trust-and-relationship-building information. For instance, pay-per-click advertising works well for B2B but potential customers will want pages and pages of content - it may not be pretty but it engages - and even then to convert they will still really want to know who you are.
     
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  2. Rockers

    Rockers BANNED BANNED

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    That's true china most powerfull economice, great knowledgeable article thanks you DD
     
  3. Techxan

    Techxan Elite Member

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    Can someone enlighten me as to something? I hope I am not stereotyping here, because I am genuinely interested in this.

    I have dealt with china importers off and on for years now. Most of the products I have been sent are pure crap. I once bought 5 KVM switches and when I opened them up, they were simply a box with ports on it and no internal components. Basically I bought a bunch of KVM cables.

    I see in media stories where toxic chemicals are used, even animal by products in Chinese products.

    Is this the common consumer product in China? I mean are all Chinese products this bad, or only the ones they export?

    Now I realize that there are good manufacturers in china, but I never found one.

    What I am really interested to know is what is the quality of the average product sold to Chinese people everyday?
     
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  4. Trepanated

    Trepanated Supreme Member

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    Not just China - I think the same thing is happening in India too.

    Between both countries there are over half a billion people about to transition into the middle classes.

    That's 500,000,000 new people with money to spend

    I see this creating 2 huge new opportunities:

    1. These new middle classes will want to demonstrate their new status, they have massive spending power and are going to be online.

    2. The existing middle classes in both countries will try to find ways to differentiate themselves from the 'new middle class' And they will do that by buying more expensive/prestigious/luxury goods.
     
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  5. Alpha.

    Alpha. Power Member

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    It really depends... they have a TON of fakes! A friend of mine lived there for two years and I went over a few times, the first impression is that they only have knockoffs and cheap crap... But once you know where to look, you'll find High Quality products for a cheap price too.. Labor is extremely cheap over there, so going to a tailor and getting a Hand crafted suit (for example) will cost you next to nothing!
     
  6. moonswamp

    moonswamp Regular Member

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    :) just for fun~~~~

    Want sell in China??? Then let Chinese do it for you, and never , never , never think China with your Western thinking.... I said :"NEVER"...

    If you want sell in China, hire Chinese people or company do it for you. And don't , no, NEVER lend a hand what they are doing for you in China... just control it, don't disturb it...

    Google, Ebay, Newegg, Yahoo, and more monster companies failed in China,
    Amzaon is a smart company, but it's almost failed, there is no more chance for AMZ since there are Tmall, JD, stand there...how about you???

    And Baidu...If you know the SEO war on "WOW Gold" or LV, Gucci, then you should have the idea of the power of Chinese SEO teams... but nobody can play with Baidu...
    Google's slogan is "Don't be Evil", but Baidu can do anything to make money...30% of income of Baidu is from fake drugs.... 70% of the list on the first page are from their own sub-sites network, such as Baidu Answer, Baidu Group, Baidu Wiki, and more and more... Baidu will list all the pages from their own network on the first page for almost all keywords....

    And social media... there is no social in China... Wechat by Tencent? - please pay for it first and you don't know how to play with it.. Weibo by Sina? - bought by Taobao (Tmall) :) anything else???

    So don't think about it if you haven't lived in China for 10+ years.... Yes, I'm a Chinese Shitizen:) and sorry for my English...
     
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    Last edited: May 16, 2014
  7. hotdew

    hotdew Jr. VIP Jr. VIP

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    Good estimates, but the government is in the way. The writeup by Damien is inciteful and quite interesting, and clearly illustrates the reluctance of Westerners to digging up China. It's harder in IM, although it's relatively better in India.

    For now the Chinese markets are best for raw materials or luxurious goods with outstanding reputation. Asking for more is not feasible in the short-term, and if I'm to put a number on it, it'd be in the next decade before we'd begin to see things change.

    It's a pity those figures are not of much use to IMers.
     
  8. forethan

    forethan Regular Member

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    Thanks! Now i know why all the personal website of the company presents in alibaba aliexpress sucks a lot.
    But i think there's a lot of money to make in this domain!!!
     
  9. antichrist

    antichrist Jr. VIP Jr. VIP

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    I have a site with about 500 pages of content. I have been thinking of translating all this into multiple languages for a while now.. hmmm
     
  10. arganrecords

    arganrecords Elite Member

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    Really interestig. Seems obvious but if a marketer can do keyword research and built a niche site I think can be awesome. I think we've to study Seo from there and try to sell to chinese! But true, there is a problem, they ask for a lot of products and simple "affiliate store" can't do a lot.
     
  11. jimmylegs

    jimmylegs Senior Member

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    Great post Dimond Damien! I too have always been curious on what the Chinese use as a replacement of Facebook and thanks for clearing that up.
     
  12. josif

    josif Newbie

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    great info! big thanks!
     
  13. umerjutt00

    umerjutt00 Jr. VIP Jr. VIP

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  14. Reyone

    Reyone Elite Member

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    Man, all of you who are like "writing content in chinese" and all that shit, read the fucking replies above you. I've lived there as well as its got NOTHING to do with the US/EU/AU market... Not even with the Indian market... The market in China is something else, but yea, by all means if you wanna create a page and give it a go, do so.

    This reply is what you should honestly go with if you pretend to even lure around the Chinese market. Culture is a fucking HUGE factor, and if you don't understand it, you won't stand a fucking chance.

     
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  15. rocketTanMan

    rocketTanMan Newbie

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    Agreed, I've been to China and actually am going back soon. I made out with selling 600 dollar Chinese 3D printers for $2,000 in Western Countries until all the prices started to come down.

    I think the Indian culture is a little more predictable in terms of marketing and repeat ability of business models.

    If anybody has any questions about China, I'd be happy to input my 2 cents.
     
  16. terrycody

    terrycody Supreme Member

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    damien

    A damn good post here! But something should be corrected just like Chinese use IE8 and IE6 more than other browsers, next are the 360 broswer and sougou. Btw, im a Chinese, i love this forum, anyone wanna do some online business here? I myself once built a phone case online store but have no time to manage it :(
    Just like post said, the next big opportunity should be in China and India market, especially in E-things, a new kickstarter-like site will be very popular, any one want to build such one?!

    anyone want to start a local business in China, we can chat on skype then.
     
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  17. reallife

    reallife Jr. VIP Jr. VIP

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    I haven't been to China since 1982, and it's impossible for me to visualize what things are like there now. TVs were a luxury only for the rich or highly-placed, and now there are hundreds of millions of people online? :confused: Wow.
    Everwhere we went, crowds gathered to stare at us because they'd never seen anyone from the West before; we gave our Chinese guide (yes, at that time the government required Westerners to have guides, who reported back about everywhere we went and everything we did) a walkman as a gift and he had to keep it hidden in public.

    Having said that, I've thought often about ways to try to get a tiny piece of the Chinese market - but even from what I learned back then, I know that there's no way I could develop an effective marketing approach to much of anything involving China without a Chinese partner.
     
  18. blackhatbeavis

    blackhatbeavis Regular Member

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    Im looking for a JV with Chinese citizen.
    Please PM me.
    I have investments to market to Chinese citizens.
     
  19. freeical

    freeical Newbie

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    hi, im a newbie here and therefore not qualified for PM. im interested in ur JV. PM me pls. tks
     
  20. Ensili

    Ensili Registered Member

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    I mostly agree with what both of you said, especially the part about how much of a factor their national culture is in pretty much any regard.
    However, you don't necessarily have to live in China for a few years to understand it first. In my case I did my postgraduate in the UK with 30% Chinese and we grew quite close during this time. Now they are helping me where they can being back in their home country to open up doors and give me a proper understanding of what to do and what not to do.

    The most essential part is: Be open to any suggestions they throw your way. See value in every tiny detail you notice/ observe or being told - Chinese are all about details in their traditions, behaviour, culture in general. There is a relatively popular study on cultural behavioural discrepancies between western and chinese. While we communicate mostly via our language, "they" do mostly through their gestures and facial expression. Do not even begin to underestimate how largely different we are. If you just start to do so, you will fail in doing business in/ with China. So never assume anything coming from a western culture and embrace what they have to offer - because what they have to offer is absolutely amazing!

    Cheers