Marketing To The Chinese Market

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Chris Cheng is the Managing Director of Jetek Asia Digital, a digital marketing company, expert in developing and implementing digital strategies in the Chinese market. Having worked with many major brands across Australia, the US, the UK, and China, Chris shares his thoughts and insights into the opportunities and the best approach for western businesses looking to make in-roads into the Chinese market. He talks about the use of Chinese social media and social selling and a mistake made by a past Australian Prime Minister in selling to the Australian Chinese community.

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Transcription:

Darren:

Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.

Today, I’m sitting down to have a conversation with Chris Cheng, Managing Director of Jetek Asia Digital, a digital marketing company expert in developing and implementing digital strategies in the Chinese market. Welcome, Chris.

Chris:

Oh, thank you, Darren. Thank you, thank you.

Darren:

Look, Chris, when people say the Chinese market, they immediately think of mainland China, but that’s not the only Chinese market, is it?

Chris:

No, no, no, it’s not. There are so many Chinese people, for example, living in Australia. We have more than a million. Yes, that’s right.

Darren:

More than a million people in Australia. And of course, across Asia, there’s large Chinese communities in almost every Asian country.

Chris:

That’s right.

Darren:

Malaysia, Singapore, Thailand.

Chris:

Japan, South Korea and Southeast Asia, there are so many Chinese, yes.

Darren:

And then we’ve got large populations in Western countries, there are Chinese communities. I know Canada is a particularly popular place for the Chinese to reside.

Chris:

That’s right. Yes, and now, their property market is booming because of Chinese buyers in Canada. In Canada, there are about like over a million as well. In the U.S., it’s almost 5 to 6 million.

Darren:

Yeah. So, when people are talking about the Chinese market, it’s actually a global market, isn’t it?

Chris:

Yes, I prefer, as my clients say, “Are you willing to do the Chinese … like I’m sure Chinese in Australia, or I’m sure Chinese in U.S. or Chinese in mainland China?” It’s quite different. And the methods we are using to pitch them are totally different.

Darren:

Yeah. And the other thing is and yet, even though they’re dispersed and spread across the globe, the Chinese community, there is something that there is also in common obviously, because it’s the language and the culture is the thing that the Chinese community takes with it.

Chris:

That’s right. We all celebrate the spring festival. It doesn’t matter whether we are in Australia or China, and we prefer to speak Chinese and we use WeChat. All of us use WeChat. It doesn’t matter if we live in Australia, China, or the U.S., because we have friends and family in China. They can’t use Facebook; Facebook, Instagram, and WhatsApp — all of those are banned in China.

So, if we want to communicate with our families in China, we have to use WeChat.

Darren:

Yeah. So, for those people that don’t know, how would you describe WeChat? Because as a platform, it’s quite an amalgam of many different things, isn’t it? It’s got various components more common to the west social media platform. So, how would you describe it to someone that’s never used WeChat?

Chris:

Okay. WeChat is something like a road, like a bus, like an aeroplane, like the daily life you are living with for Chinese. And you can pay the electric bill, you can charge your phone, pay your phone bill. You can do everything roughly in WeChat.

Over 99%, of all Chinese people, use WeChat. And we communicate … even we work in WeChat. If you do jobs, if you do business with Chinese business people, definitely, they prefer to communicate with you on WeChat rather than by email. Chinese people don’t like using email.

If you send them an email, they probably just miss, but if you send them or ask them in WeChat, they never miss.

Darren:

So, it’s got a messaging service like WhatsApp, for instance. It also has a bit of a Facebook thing in that you can update your moments, I think it’s called.

Chris:

That’s right.

Darren:

But you’ve alluded to one of, what I think is the great innovations, and that is building a payment platform into a social media platform. What a brilliant idea.

Chris:

Yes, in China, you can see everywhere QR codes, and you can just use your WeChat to scan the QR code and make any payment. Even like a breakfast shop, no cash is clean on your hand. Like our Apple Pay. Apple Pay, we can use AppleWord to pay. But in China, it’s like just a scan — scan QR code, make payment. Very good.

Darren:

And also, is it called WeChat Pay? Because I know there’s Alipay and there are quite a few different payment platforms in China. But I’ve noticed, for instance, a few years ago, they were launching WeChat into South Africa, and I’ve heard recently that there are plans to launch it into Europe. So, it’s obviously, something that’s extending outside of just mainland China.

Chris:

Yes, yes. Well, a couple of years ago, WeChat started its international business strategy. And we are an agency, and we are the service provider. We are one of the service providers overseas for WeChat, and we help them have our clients connect with ads, marketing, and open official accounts, so many things.

However, I have something I want to update you. About two years ago, Donald Trump said something, saying, “Oh, okay, TikTok, the Chinese company, it’s affecting U.S. data safety, which needs to ban TikTok.” You know that story, right?

Darren:

Yeah, absolutely. It got wide coverage. It got wide coverage across the globe.

Chris:

That’s right. So, after that, WeChat stopped, and actually stopped international strategy from the end of last year. Yes, you don’t know this, right?

Darren:

No.

Chris:

It’s not like it stopped, but it shrunk. It slowed down and shrunk down its international strategy. However, for business, if you still want to get benefits from WeChat or do advertising through agencies like us, we can still help you.

Darren:

Now, you touched on TikTok. It’s known as TikTok in the West. It’s Douyin in China.

Chris:

In China, that’s right.

Darren:

And it’s owned by ByteDance. In fact, I saw only a few days ago, that the FCC in America, the Federal regulator on communications, has written an open letter to both Google and Apple saying that they want them to take TikTok as an app down from their stores because it collects way too much personal data.

Chris:

That’s right.

Darren:

And this is probably one of the things that business people in the West may be vaguely aware of but not understand the impact that this could have on the way they communicate with Chinese people.

Chris:

Yes. Well, first of all, I want to say is that the U.S. government worry too much because TikTok trying — ByteDance, their mother company of TikTok, trying to be a company just like the outside of China. So, the data they collected, which matched the rules outside of China, they wouldn’t, they definitely wouldn’t get the data, get back to China.

And also, you mentioned Douyin, which is a Chinese version of TikTok. In China, it collects a lot of your behaviour, your interest and your real behaviour and your real interest, which is according to how many seconds you watch this video. If you don’t like it, you will scroll it, you know, skip.

Darren:

Yeah, of course.

Chris:

So, it’s all the real … your interest. And according to your decision-making of each video, they will know you more and more and more. And this will help the business to identify the audience and push the real product in front of them. This has changed the eCommerce environment in China a lot.

Darren:

Of course, because the more you understand your audience, the more you’re able to then customize the offering that you make to them at the right time, right place, right offer, to maximize conversion.

Chris:

That’s right, yes. So, now, if someone says, “I want to do eCommerce in China, Chris, do you have some suggestions?” My suggestion is either probably don’t start from Taobao or Tmall. You know Taobao.

Darren:

Yeah, Taobao and Tmall are really the branded-

Chris:

That’s right.

Darren:

The sort of big brand.

Chris:

Like Amazon, that’s right. So, if you want to get into Taobao, Tmall, you need to spend a lot of money. You need to prepare your brand, your registered trademark. It takes a lot of time. But I strongly recommend them to start from TikTok in China or Xiaohongshu, Little Red Book. There is something called Little Book.

These two platforms, we call them in Chinese èr děng diàn zǐ shāng, which is a second-class eCommerce platform. So, the first-class eCommerce platform is Taobao, Tmall. And now, we have another new class eCommerce platform: Douyin is inside of them. So, which means-

Darren:

Sorry, it’s interesting, that you say that, Chris, because we’ve seen the same trend in the West in that the original eCommerce was set up as eCommerce, like Amazon-

Chris:

Yeah, that’s right, eBay.

Darren:

Yeah, eBay, where it’s all about products and sellers being on there, and it is almost like a catalogue. Then we’ve seen this transition to social media selling, I guess, you’d call it. Because Instagram has been pushing this as well. But you are saying that in China, the use of Douyin and well, and also, WeChat, quite a few salespeople use WeChat as well with millions of followers that they’re pitching to, aren’t they?

Chris:

Yes, I didn’t mention WeChat until about a couple of minutes ago. The reason for that is WeChat roughly touches everything. WeChat roughly touches everything. You couldn’t just put WeChat into a specific category/catalogue because, roughly, WeChat doing everything. So, do eCommerce, you’re selling your products or to recruitment and finding leads, everything you can use WeChat, yes.

Darren:

Now, Chris, you’ve worked with multiple Western brands across a lot of Western markets as well: Australia, the U.S., the UK, as well as China. And brands like Flinders University, South Australian Tourism, Superdry, Jacobs Creek, Michael Hill Jewelers, the retailers, Mercedes-Benz — these are some significant Western brands, aren’t they?

Chris:

Yes, yes. We’re lucky.

Darren:

Well, in that the Chinese market, the Chinese community, wherever you are targeting them is often, and particularly outside of mainland China, as well as in, but outside of mainland China – is it fair to say that the ones that are living outside of China, particularly in Australia are particularly affluent? They have high disposable incomes. They are a valuable audience to engage in.

Chris:

Definitely. They are more valuable, way more valuable than the 1.3 billion Chinese in China. There are a couple of things I want to say.

So, first, each Chinese living outside of China definitely has more income. Their average income level is higher, and their education background is higher. This is not a very important thing, but I want to mention it.

The second thing is they have many Chinese friends and families living in China, and they treat this guy in Australia like an influencer. If this guy says something good about Australia, they trust them. Remember what I said? We all use WeChat. All of us in Australia or China, use WeChat.

So, if I share something like moments, they will see it. Like I share some very good weather, good lifestyle, happy life in Australia — well, the people on the other side in China, they will see it. And if I show I use some good Australian products, and they want to buy it.

About five years ago, there was a name, Daigou.

Darren:

Daigou, yeah.

Chris:

You’ve heard about that?

Darren:

The personal shopper is the person that buys for you and then bundles it all up and sends it to you by post or delivery.

Chris:

That’s right. People can’t understand why-

Darren:

That’s fallen away through a lot, hasn’t it? Particularly in Australia because a lot of those products — and I remember at the time, milk powder and infant formula was a big thing. A lot of the multivitamins and things like that were a big volume business for the Daigou.

Chris:

Yes. We call it the Australian miracle. It happened to some brands like Blackmores, Swisse, A2 Milk Powder, and so many milk powders. And they sell so much to Daigou.

Daigou is just like anyone. Roughly over half of Chinese in Australia, definitely have been one or two times Daigou, even myself. I’m not saying I’m not Daigou, but it is more like my friend wants me to buy something for them and send it back to China.

Darren:

And part of that was the supply chain security because there were question marks over just because, say, A2 Milk Powder in China may not be A2 Milk Powder. There were some questions people had about the supply chain, but more importantly, it was to your point earlier that it’s like getting a recommendation from a friend living in Australia as to what’s the good thing. What should I be buying?

Chris:

Yeah. Well, that’s right. Like what should I buy? Or even we just buy it, send it to our parents in China, and we think, oh, their joint health. They’re getting older, they need to look after their joint health. They need to make their bone stronger, or they will have some issues — take some fish oil. Oh, so many things you can send it back to China-

Darren:

Yeah, of course.

Chris:

Or back to your family. If they like it, they will introduce it to their friends.

Darren:

Well, it was interesting, wasn’t it? That Daigou movement saw quite a few Western companies, and Australian companies get bought by Chinese investors. I mean, Blackmores was publicly listed, so it was very difficult. But I remember, I think it was Swisse and Nature’s Way-

Chris:

Swisse is sold to a Chinese company, I think, Chinese investors.

Darren:

Yeah, but there were a couple of them that Chinese investors came in because they saw the volumes of products being sold to China, first through the Daigous, then through eCommerce in China. It made sense to invest in those for benefit.

Chris:

Yes, yes. Now, that still a lot of Chinese investors are looking into invest Australian products, Australian factories, because they think Australian’s product means high quality, which is good. They just think Australian product is high … but I think this kind of impressions is same to Europe or to U.S. market. They think Australian’s product is nature, healthy, good quality, which is great.

Darren:

And I think that applies to products that are food or health-related.

Chris:

Yes, yes. Health-related, food.

Darren:

And I think engineering-wise, probably, the Chinese consumer probably looks to Germany just as we the Western consumer does for engineering and to America for computers and technology and things.

Chris:

Yes, yes, yes. That’s right. For each country, different inspections.

Darren:

What are the things though, that for instance, if you’re an Australian business or a Western business, and you wanted to target the Chinese community, whether that’s in Australia or in other Western markets; what are the types of things that you would need to consider in developing a digital strategy?

You’ve sort of touched on them, but I’m just wondering if you could pull those together as the type of advice you give your clients.

Chris:

Well, I want to say a couple things. The first is if you want to do Chinese digital marketing, let’s start from some test campaign. Don’t just to say, okay, I want to invest a lot of money and start a very long plan. What I want to say is we can start from a test campaign. This test campaign can just test it from the Chinese living in Australia, like 1 million Chinese people.

And for example, if you are a … how do you say that? Roller shutter product, good. You want sell to Chinese people, good. And you want even like export to Chinese in China. Okay, test, test the Chinese in Australia first, do they like it? Like what kind of campaign can touch them, can convince them, can get them interested to buy your product.

And this wouldn’t cost a lot. This roughly cost stuff from like couple of thousand dollars, just like a Google campaign, just like a Facebook campaign you do. If the result is good, you can consider something longer terms plan. That’s my suggestion. So, start from something easy.

Darren:

So, Chris, you’d target that audience through, for instance, WeChat in Australia, would you?

Chris:

Yes.

Darren:

So, the platform would become an important part of the targeting process?

Chris:

Of course. Well, outside of China, the WeChat platform, roughly … okay, let me say this; so, if you live in China, around you probably daily, you use over 20 apps. If you want to order some food, you will use specific apps. If you want to do some specific thing or Taxi, like a Taxi or call someone … but like Chinese living in Australia, if we want do anything related to Chinese things, there is only one app we check.

Darren:

What about Red Book? Because I’ve heard about Red Book-

Chris:

Little Red Book.

Darren:

Little Red Book. Yeah, and it’s very popular.

Chris:

It is.

Darren:

Particularly with young people and it seems to be very popular with young women, why is that?

Chris:

That’s right. Little Red Book is similar like Pinterest plus Instagram. Do you know Pinterest?

Darren:

Yeah, yeah. I know Pinterest and Instagram.

Chris:

You’re definitely are familiar a lot with Pinterest. It’s similar like Pinterest plus Instagram. So, a lot of ladies share their experience of purchasing, of reviews on specific products which is very strong information for specific products. And that’s why more and more business trying to use KOL, KLC advertising campaigns in Little Red Book, and it performs really well.

Darren:

Yeah.

Chris:

We recently used this campaign for Princess Polly. You know Princess Polly is a lady’s fashion brand, quick fashion brand. It performs so good. And also, we use for Superdry for the Tiger New Year Collections. It always sells so much and the ROI is over 10.

Darren:

One of the things you’re just mentioning that that I’m reminded of is that in mainland China, they’ve created all these retail events that never existed in the West, like Singles Day, the 11th of November.

Chris:

Double 11, that’s right.

Darren:

Double 11. Yeah, and there’s others as well that have risen up in recent times. There’s like the Chinese Valentine’s Day, and it’s almost like they’re creating these opportunities for big retail sales and it’s starting to drift across outside of China into other markets.

I noticed Single’s Day was getting media coverage here on the 11th of November amongst Chinese in Australia, but it’s interesting how they’ve been able to create reasons for shopping.

Chris:

Well, if I review back about 15 years ago or 10 years ago, and when the Double 11 started to become a shopping day like a Black Friday in the Western cultures, like Black Friday; to me, it was a very interesting process. It’s hard to say, but what I’m feeling is in the recent 20 years, Chinese people earned more money.

Darren:

Yeah.

Chris:

They have the demand of increase their life quality — their lifestyle, increase their lifestyle and make themselves to feel more happy and happiness and something like that. They want to buy some good product, they want to travel outside. They will want to see, experience different things. And so, that boost the eCommerce, have a very huge improvement. Yeah, that’s what I’m feeling.

Darren:

Yeah. And the other thing-

Chris:

And the timing-

Darren:

Yeah. The other thing is the use of influences. I mean, the Chinese marketing was traditionally full of celebrities and much like Western marketing, we see Instagram influencers; but it was almost taken to a whole new level for the Chinese marketing, isn’t it?

There was personalities, actors, musicians that would be literally selling millions and millions of dollars’ worth of merchandise.

Chris:

Oh, my God, that’s right. They did the number they sell in each night, it sounds crazy. It’s really crazy, but we’re talking about a huge market. The market in China is 1.3 billion, over roughly 1.4 billion Chinese living in China. And the purchasing power is huge.

If there is some like influencers, they are a very big one and they are selling some popular products and with good rates and good price, good bargaining/good bargain, which increase very big, huge … well, sometimes it happens.

But what my suggestion is to the overseas brands, my clients start from low KOL, KLC, don’t go to the big one. The big one … I’m not just saying is because they are pretty expensive, it’s not just because they are pretty expensive. It’s also because if they represent your product and sell your product, probably the order amounts will make you trouble.

Darren:

Yeah. There’s also another group though, that are not necessarily celebrities but they’ve become celebrities for their ability to sell. They literally sit online, promoting and selling products by trying it and demonstrating it and recommending it. And yet, they’re not celebrities.

Like people aren’t watching them because they’re known for being an actor or a musician, they’ve just become celebrities for their ability to sell and recommend products.

Chris:

That’s right. They are not celebrities, they are not a singer. They’re not a dancer. They are not the traditional celebrity. No, they are just using the short video platform, like Douyin or they’re using … especially Douyin, this platform creates so many KOL, KLC and very good at selling.

Darren:

Yeah. But there’s also been a bit of a crackdown, hasn’t there? In China, because we’ve seen a lot of celebrities and that type of thing being called to account often because of tax evasion and things like that.

Chris:

You know so much things. You know so much, roughly everything about China, alright.

Darren:

No, well, it’s interesting because I mean, even in the West, this is a problem when a marketer is considering using a celebrity influencer, you need to be very careful because if something happens that they’re suddenly put in a poor light because they’ve done something wrong, that has an impact on the brand as well.

So, choosing the right KOL or KLC is really important. You have to be careful you’re not getting someone who could put a foot wrong with the authorities and end up disappearing, let’s say.

Chris:

That’s right. Well, I’m not doing advertising for myself, I’m saying using agencies to do these kind of things is very important. Otherwise, you might face something unexpected.

Darren:

Yeah.

Chris:

Yes, yes.

Darren:

It’s also, I think you mentioned when we were talking last week that a lot of brands go off and set up their own presence on Chinese social media, particularly WeChat, and that if you are using someone else to manage it for you, it actually could be quite dangerous because you don’t necessarily own your persona online. There was a very high-profile example you had of that.

Chris:

Yes. Well, that is something very, very high-profile example, which is our previous prime minister of Australia … what his name?

Darren:

Scott Morrison, how quickly we forget.

Chris:

Scott Morrison, that’s right. Scott Morrison.

Darren:

ScoMo to his friends.

Chris:

Okay. Cool. Scott Morrison in the beginning of 2020, Scott Morrison actually is very welcomed in the Chinese community in Australia, very popular. He’s very popular. And he used the WeChat to increase his influential power in the Chinese community.

And he used someone living China to set a personal WeChat official account. And legally, this account is belong to this guy living in China. And in the end of 2021, actually, this guy sold this account to someone legally and it caused a lot of trouble to Scott Morrison.

Darren:

Oh, absolutely. Imagine if he sold it to I don’t know, gambler or con artist or someone like that. So, in other words, Scott Morrison’s WeChat account was not actually owned by him because the person that set it up owned it and they could legally sell that?

Chris:

Of course. Yes, that’s right. Everything they did is not offense to the law and you couldn’t pick anything wrong from that. So, that’s why when you set a WeChat official account, which is the basement of a WeChat marketing, which is a start point of your WeChat marketing — use your Australian company entity to hold this. This is very important. This is the first thing I told my client.

I give you another example. Okay, after Scott Morrison, these things happen; a lot of my clients, for example, South Australia Tourism Commission (SATC), they have an account belong to under a personal info, old one, about six-years-old. And they run about six years. And now, they decided to terminate that one and just switch into a company account. It’s very important. Otherwise, you might say something unexpected.

Darren:

It’s really interesting because I think the mistake people make outside of the Chinese community and the Chinese market is getting caught up in the size and the opportunity. But in actual fact, it’s quite a different approach to business and you need that help navigating it. Don’t you? It would be very dangerous assuming that the things that work in the West would work with the Chinese community.

Chris:

I’m a bit lost at this time.

Darren:

Okay, in that there is quite distinct differences between the two.

Chris:

Yes. Yes, of course, yes.

Darren:

From your experience, what has been the sort of biggest mistakes that people have made when they’re considering marketing to the Chinese market?

Chris:

Well, Scott Morrison is one of the biggest ones. And so, which is from the beginning of their Chinese marketing is already wrong. It’s already totally wrong. They’ll put themself into an uncomfortable position.

And another thing I want to say probably is about the Chinese digital marketing, let’s start from something small. Let’s test from the market you’re familiar with, especially for example, Chinese around you.

Darren:

Yeah.

Chris:

If you live in Sydney, you know there’s so many Chinese people around you. Try to sell your product to them first and collect the feedback from them first, because as I said, they are very influential to their friends in China. If they like your product, they will recommend your product to their friends in China. It is a very big free campaign, free advertising for your product to get into the Chinese mainland.

Darren:

Yeah. I think that’s great advice because the danger … running into a big market, you could waste a lot of money very quickly and not really make a big impression. Start small, test, learn, understand the things that work and those things that don’t.

But I also love the idea of if you get it right, especially with the Chinese community outside of mainland China, there’s great opportunities for them to actually promote and be advocates for your brand and business.

Chris:

That’s right.

Darren:

I think that’s so important.

Chris:

That’s right, they will prompy for you. Yes, they will promote for you, which is great.

Darren:

Look Chris, this has been a fabulous conversation, I really have enjoyed it. Thank you for taking the time, and sharing some of the insights that you’ve gathered managing Jetek Asia Digital. How long have you been actually in business?

Chris:

About six or seven years, yeah.

Darren:

Wow. Well, you’ve certainly got a wealth of experience and knowledge. So, thank you for sharing it with us.

Chris:

Oh, it’s my pleasure. Thank you very much, Darren. Thank you.

Darren:

Oh, look, I have got a final question for you before I go, if you don’t mind.

Chris:

No, it’s okay.

Darren:

So, who’s your favorite KOL from China?