In the second part of a two-part series, Tencent's SY Lau looks at how the rise of disruption has led to "Internet Thinking" as a marketing approach in China – and what this means for the market in general.
Over the past year, “Internet Thinking” has become a buzzword heard among Chinese entrepreneurs. Where did it come from?
The first traditional businesses that started working with Tencent were in the services sector. Companies in areas like housekeeping, real estate, and public health began to move over to using Internet services as part of how they operated.
The reason for this is simple: the sheer number of people in China can make it difficult for companies to find customers, while it is also difficult for consumers to find companies that they can trust.
Before the Internet, it was challenging for both sides to find each other efficiently.
However, new mobile and Internet services offer a direct person-to-person, real-time, on-demand method of communication.
When these early adopters saw significant success and began to talk about their experiences, the other companies in those industries were ready to jump on the bandwagon to try and get the same results. This different approach was described as “Internet Thinking.” The result is that companies in many conservative industries and sectors have been willing to make huge changes in how they operate.
With Internet Thinking approaches, they can see how to address the huge challenges around increased user expectations and improve their own profitability.
For marketers, the challenge is how to use the mix of new mobile and social channels that are available to them.
Viral marketing has been one of the main elements used here, as it encourages more interaction between brands and customers. However, this is not the only way that companies have been making use of Internet Thinking. It involves thinking ahead around what customers are asking, and putting together the right products and services to meet these questions.
Companies in Fujian Province provide a good example here. Fujian is one of the biggest tea-growing regions in China, producing high-quality teas. However, the region is very hilly and the companies operating there have problems in marketing themselves outside their local area.
Digital marketing helps companies to reach audiences that are interested in what they are selling in a more efficient way. This improves the ability for companies to find potential demand more easily.
Today, these companies are applying the ideas that have come up around Internet Thinking to sell their tea.
Marketing products like tea can be done without huge expense. One village managed to sell RMB30 million during the first half of 2014. The per capita income of this village went up to RMB13,800, raising the average income above that of many of those living in the wealthier provinces.
Mobile marketing tactics can help to resolve basic inequalities among different regions of China. Regional and small businesses like the tea growers in Fujian, or the producers of yak milk in Sichuan, can now market their products not just within China, but worldwide.
This take-up of Internet Thinking differs from approaches around the rest of the world in two regards. The first is how much this is being led by mobile-first thinking. For many of the companies that are now involved in Internet Thinking, mobile is their primary route to getting on the Web, and it is the same for many of their prospective customers. This affects how many of these companies approach their marketing, as they are thinking in terms of how people use their phones first and foremost when putting together their services and pricing them. The second is how it has spread out from the digital market and out into more of the markets across China.
While some of the language of Silicon Valley has spread worldwide, it has not had the same effect in China as Internet Thinking.
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