There has been significant investment in mobile Internet access in China in recent years. What does this mean for marketers and how can they capitalize on the growing mobile population?
China has seen massive growth over the past years: China's overall economy has grown around 8 to 9 percent in the last few years annually, but the digital economy has grown about 50 percent annually in the last few years. Alongside this, China's technology and digital sector has grown significantly, too. According to the Boston Consulting Group, by 2016, the digital economy will be 6.9 percent of the national GDP in China.
The overall market growth has led international companies to increase their investment in developing their business opportunities in China. This includes expanding their marketing to Chinese consumers. At the same time, Chinese technology brands are establishing themselves internationally as well.
For companies to be successful in their activities, they have to understand how the rapid growth of China's economy has taken place alongside vast investment in mobile Internet access. There are more than 618 million Internet users in China, and around 80 percent of these use mobile devices to access Internet services and sites. This represents around 500 million people.
For that group of mobile Internet users, access to online video is one of the largest growth activities. Around 250 million people regularly watch video via mobile, and this is growing incredibly rapidly - it was a jump of around 83.8 percent compared to last year.
What does this mean for marketers? Firstly, the competition for attention is fierce. Mobile users can spend their time on news, apps, websites, or on social interaction via their phones. Some form of marketing or advertising will normally support each of these online channels, so there are opportunities to touch potential customers with creative ideas throughout the day. However, the context of the user will have an impact on how those creative ideas should be designed.
Secondly, Chinese customers are using their mobile devices more as part of their shopping habits. Around 34 percent of Chinese mobile users compare prices online in showrooms or supermarkets. Consumers can get easy access to product information and social media, which leads to better-informed buyers.
The digital market in China continues to evolve, based on three key themes: fast growth, the dynamic market, and integration with offline.
Firstly, fast growth: China has surpassed the Western approach, as Internet and mobile development has gone from being behind other countries to being ahead. Mobile Internet now accounts for nearly 90 percent of the total Internet audience, while it's only 60 percent in the U.S. Of all mobile Internet users, around 70 percent of those in China have used mobile commerce, while this is only 31 percent in the U.S.
Secondly, there is a very dynamic market in China right now. Smaller enterprises and new entrants have a huge amount of room to grow into, which encourages people to be more entrepreneurial in their approach. In turn, this makes the market move faster due to competition. Overall this is better for customers.
Lastly, there is the offline-to-online integration (OTO). OTO is particularly strong in China, with traditional businesses embracing this concept very quickly. Why is this taking place? I think it is because the Internet levels the market, allowing companies to perform better in all the regions of the country. Everyone can get access to the same trends and information that are taking place in the leading cities (Beijing, Shanghai, and Guangzhou).
The idea of being customer-centric and responding to their needs goes to the heart of this approach. As long as customers feel that this is real, they will react positively. By designing the customer journey in the right way, marketers across different industries can make use of social and online marketing channels to develop opportunities.
Looking into the future, Chinese social networks will continue to grow and be used internationally. Similarly, Chinese companies are beginning to increase their marketing and branding activities outside their home market of China. This will be an exciting time for us all, as we bring the best of China out to the world.
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SY Lau is president at Tencent Online Media Group. He is also senior executive vice president for Tencent. He is responsible for the company's growth in the online media and video sectors, as well as leading Tencent's work with national and international brands.
Hong Kong, May 5-6, 2015
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