China’s Great Fire Wall has blocked out the Western social networks to a greater or lesser degree. But even without the West’s direct influence in the social networking scene, social networking in China has expanded, becoming an intrinsic part of many people’s lives. As Yin Mei said on Mashable, “Connections mean ‘power’ in China. This is why social networks have become part of the relationship-building fabric of Chinese society.”
Here are five specific reasons why brands should be participating in China’s social networking scene.
1. 300 million consumers using social media
China’s size makes it impossible to ignore. China has over 300 million social network users and that’s around only 58% of total internet users in the country. Given that the country’s total population is 1.34 billion, there is huge growth potential here. But of course, what people are doing on social networks is what makes this important.
You can accomplish a lot when you get a bunch of people together. One of China’s largest social networks, YY.com, has a virtual currency system that allows users to earn real money, perhaps even make a living off their skills. This could through be performing a virtual karaoke concert or giving college class tutorials.
2. Chinese social consumers are highly active
Chinese social networking users return to their social networks of choice much more frequently than those from any other country. According to a McKinsey survey, 91% of Chinese social network users claimed they had visited a social networking site in the last six months. Compare that to other Asian countries such as the ever-connected Japan at 30% or South Korea at 70%. Even in the US, the birthplace of Facebook and Twitter, only 67% of users said they had visited a social networking site in the past six months.
These consumers are online discussing and engaging with brands. Indeed on Sina Weibo, 27.5% of users reported searching for brand content. Not all of this content is good, though. Just like with Twitter, a single post can light up a firestorm of controversy. In late September a Starbucks opened by the Lingyin Temple in Hangzhou to the roar of controversy. The news was shared at least 4,000 times on Sina Weibo as people weighed in on how they felt about the juxtaposition of traditional Chinese culture and a symbol of foreign cultures.
3. They are spending online
Ecommerce is booming in China. China has 193 million online shoppers. That’s more than the US’s 170 million, and five times that of the UK, according to the Boston Consulting Group. But it’s still only 14% of the population. By 2015, China is expected to be the largest ecommerce economy with a projected size of $2.83 trillion spent by 300 million online consumers.
But we’re not looking at e-commerce business as usual. Homegrown players are innovating the space. Taobao is a leading consumer-to-consumer auction site like Ebay, but that’s where the similarity seems to end. Unlike Ebay, Taobao doesn’t make its money by charging sellers for listings and sales. Rather, it sells search rankings and personalized storefronts to sellers. Taobao also has a more community feel than Ebay in the US, with fashion and entertainment news as well as practical shopping tips. It’s a new kind of e-commerce.
4. They listen to social recommendations
Chinese consumers observe what others are doing very closely. They are more likely to consider a purchase if the product has been mentioned on a social media site. Around 60% claim that friends and family are a major source of product information. The basic logic is that if more people are using a product, the more likely it will work, not break, and not embarrass the user. Link this use of social media with the growing ecommerce market, and it’s not hard to see the opportunity.
To capitalize on this, Taobao lists products by popularity as a default. This provides users with the assurance that other people have tried out the product and that it works, encouraging sales. Due no doubt in part to this and other innovations, Taobao has a 90.3% stake in the consumer-to-consumer market.
5. Social consumers are not just urbanites
China’s native social networks are targeting more than just the affluent members of the urban elite (though they have their own network, too: P1.cn is invite only and just for the top 10% of earners). Tencent, a large social networking company, has three platforms that focus on people living in rural and second tier cities (those with more than 1 million residents but are not Shanghai, Beijing, Guangzhou and Shenzhen – 1st tier cities).
These sites are huge, too. Qzone, which targets teens and rural users, has 597 million users. QQ, the instant messaging social network, has 784 million users and targets the same demographic. Social networking in China offers a wide range of audiences. Brands can pick which audiences they need to reach and move from there.
What these five points illustrate is that out of sight shouldn’t mean out of mind – Chinese people may be using different social networks to people in the West, but online media and retail are just as important in China as they are anywhere else – if not more so. Separated from the competition from Facebook and Twitter, Chinese social networks have developed innovative new ways of approaching their consumers – ways that other companies could learn from.
In a follow-up post, we’ll explore a few Western brands and individuals who’ve done exactly that and made headway in the Chinese social sphere. Stay tuned!