Chinese consumers are increasingly spending time online, especially younger generations. They use blogs, forums and social media to share opinions and influence each other. Companies need to listen to what consumers say online to understand preferences and develop offerings. While monitoring discussions, companies should engage authentically to build relationships rather than just promote products. The opportunities for connecting with consumers are vast but companies must find the right approach for their specific business and audience.

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2. C OV E R S TO RY
BY JUSTIN CHAN
Connecting
with Consumers
Millions of people are talking and it’s time to tune in and
start paying attention. The social nature of today’s Internet
means that millions of Chinese netizens are redefining the
way companies reach consumers across the country. By
listening to what consumers are saying about brands,
products and services, companies can begin understanding
their customers’ opinions and preferences and develop
offerings that will cater to their customers’ emerging needs.
I t was no surprise when China’s online population surpassed that of the United States
in June last year to become the largest in the world. By January of this year, the
Internet penetration rate in China surpassed the global average of 21.9 percent and
over 298 million Chinese citizens had access to the World Wide Web, a 42 percent
year-on-year increase. But the story in China is not simply about the number of Internet
users, but rather what they are doing when they go online.
The Internet has presented the Chinese consumer with a welcome alternative to the
traditional mainstream media of television, radio and print that was extremely influential
in shaping opinions and decisions. At the same time, consumers are no longer simply on
the receiving end of media – they can now create, publish and share their own content via
the Internet.
“Previous consumer-brand relationships were one-way,” says Claudia Sun, account
director of the Marketing Communications practice at public relations firm Hill &
Knowlton Shanghai. “Now, consumers play a more active role so brands need to reflect this
change by treating their consumers as equal partners in a sophisticated relationship.” The
ILLUSTRATION BY JASON PYM
J U LY / A U G U S T 2 0 0 9 INSIGHT 33

3. myriad online tools available for companies – such For several years now, blogs and discussion
as blogs, discussion forums and social networking forums (also known as BBS or bulletin board
sites – make it possible for companies to interact systems) have been extremely popular in China.
with consumers, learn about their tastes and The total number of Chinese netizens with blogs
concerns, and share new products and ideas. today, 162 million, exceeds the total number
While the Internet is now a major channel to of Internet users in China just three years ago,
connect with netizens, companies must examine according to a January report by the China Internet
their communications strategy and rethink how Network Information Center (CNNIC).
they go about engaging Chinese consumers. Although the number of users who actively
“Digital and traditional media are both likely to play update their blog on a regular basis drops to 105
a role,” says William Moss, a director in the Beijing million, the proliferation of blogging and forums
office of public relations consultancy Burson- has simply been phenomenal. Today, 91 million
Marsteller. “An organization that communicates netizens participate actively in online discussion
effectively will use the right mix of online and forums, up from 53 million in 2006, according to
traditional media in ways that complement and the CNNIC report.
reinforce each other.” Even with new platforms today such as social
Brands that are able to stand out from the networking sites Facebook and leading Chinese
crowd and create a positive and memorable online site kaixin001.com, microblogging services
experience will be the most successful in building Twitter and Chinese counterpart fanfou.com, or
lasting relationships with the consumer. video sharing sites such as YouTube or youku.com,
“basic BBS discussion forums still dominate the
Development trends social media landscape in China,” says Adam
Schokora, head of Edelman Digital in China. “I’m
“While the Chinese Internet is becoming ever not sure that will ever change.”
more complex, Chinese netizens are still going on Although Chinese netizens are still primarily
the Internet for the same reasons they did three using blogs and forums for entertainment purposes,
years ago: to find information and especially companies are realizing there is more and more
to make friends and be entertained,” says Sam business value in monitoring blogs and forums to
Flemming, founder and CEO of Internet word of gauge consumer opinions and preferences. Forums
mouth research firm CIC. exist for virtually any category or segment, from
ONLINE ACTIVITY:
Chinese consumers,
especially the younger
generation, are spending
more and more time
online.
IMAGINECHINA
34 INSIGHT J U LY / A U G U S T 2 0 0 9

4. car owners and cat owners to new mothers and
food critics.
On one mobile phone discussion forum,
detailed reviews and comments can be found on
1 298
new products within days of release, outlining new
ISTOCKPHOTO
features, design elements, production quality, bugs,
troubleshooting solutions and the users’ overall
experience. In the automotive sector, CIC analyzes
over 10 million consumer forum comments
written by hundreds of thousands of unique users China’s ranking
each month. in terms of total
The way people are blogging has also changed, Internet users million
adds Schokora. Personal blogs are growing China’s total
beyond simply vanity and diary-type blogs,
41.9
number of
and knowledgeable netizens who previously netizens
%
contributed to the Internet community through
BBS forums may now use a blog as their own China’s Internet
personal platform. “There is now a more robust penetration rate
blogosphere of experts and opinion leaders on Year-on-year increase in
(percentage of population
different topics,” he says. Internet users
with access to the Internet)
Digital surge
Companies today have a truly unique opportunity China’s ranking in
72.5%
The U.S.’s Internet
penetration rate
22.6%
105
to observe online discussions about their brand, terms of Internet
87
products and services. “Never before have penetration
companies had access to so much naturally
occurring feedback,” says Schokora. Each blog
91
entry or forum post represents an excellent market
research data point for companies to gain insight
into what consumers are really thinking and what
they are really after.
Another key benefit of monitoring online
million Netizens who
actively update
blogs
million
59.1%
media is the ability to see crisis situations coming
ahead of time and being prepared to respond Netizens who think “life
Netizens who use
appropriately in a timely manner. would be very
discussion forums
“The Internet has established itself as a key monotonous without
medium for citizens to air their grievances,” the Internet”
says Jeremy Goldkorn, Beijing-based publisher
of Danwei.org, a website covering media and
advertising in China. There are plenty of horror 82.5% Netizens who think “the
Internet strengthens
stories in China about how blogs, forums and contact with friends”
Netizens who access
more recently, video sharing sites have caused
Internet video content
or magnified major public relations crises. The
24.8% 67.7%
Netizens who
reach and velocity with which the Internet can
engage in
deliver information around the world mean
e-commerce
that companies must be positioned to respond
genuinely in a prompt manner.
Internet users by age
Therefore, it is also very important to ensure
any online outreach is in line with the company’s Under 19 Age 20-29 Age 30-39 40 and above
business goals. “The online world changes so
rapidly that it is easy to make one of two mistakes,”
cautions Moss. “Jumping in too quickly because
35.6% 31.5% 17.6% 15.3%
SOURCE: Statistical Survey Report on the Internet Development in China,
J U LY / A U G U S T 2 0 0 9 I N S I G H T 3 5
January 2009, China Internet Network Information Center

5. to be online: critics when posting product reviews,
IMAGINECHINA
or artists when submitting designs for a contest,
or rock stars when posting a music video. This is
the case especially for the younger demographic
in China, which considers digital technology an
essential part of life and feels that the Internet is an
outlet for a “second life,” according to research on
Chinese youth conducted by advertising agency
JWT and internet firm IAC.
“It has become crucial for brands to change
their media approach to become more engaging by
exploring social media to create real relationships
with consumers,” says Sun. While the first step
to engaging online consumers is simply to learn
how to listen to what consumers are saying about
a company, there are many different approaches to
building actual connections.
For some companies, a corporate blog could
be the right approach to start, although Chinese
SOCIAL SITE: Tencent’s there is pressure to “be digital” without thinking internet users have proven to be scrupulous
QQ.com is one of China’s about what it really means to the business; or in spotting heavily polished and edited entries
largest Internet portals hanging back so long that competitors move in or posing as the CEO’s viewpoint. Instead, experts
complete with blogs, customers move on.” recommend writing in a human voice so readers
forums, video sharing To structure an approach that properly supports feel like they are having a conversation. For larger
and social networking. a business, Moss advises spending time to research corporations, it is often effective to have rank-
and understand the online environment in the and-file employees blog so that the company has
context of the business or particular stakeholder a human face.
and then devising a meaningful strategy. “Netizens are very receptive to any type of
Every brand will have a different posture for its content that adds value to their online experience,”
online activities depending on its target consumer says Schokora. “If companies want to participate,
and price range, says Ed Tam, director of invention they need to do so in a meaningful way that brings
in the Shanghai office of Mindshare, a global media value to their key audiences. Otherwise their key
agency. “Luxury brands for instance, are all about audiences just won’t listen or perhaps will just be
what they represent, so a one-way website is ideal,” put off.”
he says. “But as you work down the demographic Another method companies have used in the
and price continuum, brands tend to be a lot more past to engage online audiences is to establish
conversational and that is when you need to have a relationships with “efluencers,” which is what CIC
more interactive socially driven presence.” calls the people most passionate about brands and
products that are driving conversations online.
Roadmap to engage Keeping these knowledgeable bloggers and
forum administrators informed and developing
Companies who are not committed to the digital a meaningful relationship with them can pay
and social media space and are not focused on dividends when other consumers seek their opinion
what consumers are saying online about them and knowledge about a company. They typically go
are in big trouble, says Schokora. “There is just so to great lengths to share their opinions and in the
much online content in terms of conversations and process often influence other consumers.
discussions about companies and their brands, However, there is a fundamental issue that
products and services, it is essential for companies makes it very difficult for corporations to really get
to pay attention and participate.” involved with the social Internet, says Goldkorn.
The Internet allows for unprecedented self- “The marketing staff will go home at the end of
expression and consumers today have more the day, while bloggers and forum writers stay up
and more avenues to express their thoughts and till the wee hours putting love, hate or just a lot of
opinions. They can be virtually anything they want effort into their online activities.”
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6. Broad-reaching tool
“Most major consumer products companies
in China understand the importance of online
their brand to create a fully interactive and
mutually rewarding relationship,” says Sun.
In today’s interconnected world, there are
very few communications objectives that cannot
“
As social media
continues to gain
marketing and communication, and in many cases be achieved digitally. But no matter the medium,
are using it aggressively,” says Moss. But that does whether traditional mainstream media or online, popularity, the
not mean companies whose primary business isn’t companies must find out what audiences want and reach of Internet
selling to consumers cannot use the Internet to need and then find the best way to provide it. “It
their advantage as well. is also important to remember that consumers word of mouth
These companies can still harness the benefits of are not receptive to media but the content that it will only continue.
digital media to engage other stakeholders such as carries. Media and content are symbiotic in nature
investors or partners and develop their corporate and marketers need to remember that,” says Tam.
It will fall on
reputation. “These areas will drive fewer headlines Companies certainly have the tools to begin companies to
and perhaps fewer outrageous viral videos, but learning about what consumers want and need.
have a pulse on
they can be just as essential,” adds Moss. As social media continues to gain popularity,
Although China’s younger generation is leading the reach of Internet word of mouth will only current trends in
the Internet push, from spending the most time continue. It will fall on companies to have a pulse order to engage
online to feeling the most engaged online, the on current trends in order to engage consumers.
array of digital tools available means a very wide “The key is listening to consumers’ Internet word consumers.”
audience can be reached. “Even when looking at of mouth, figuring out what they want and then
broader and older demographics, the Internet can creating campaigns that really connect to them,”
be a highly effective way to communicate,” says says Flemming. “The buzz will naturally follow
Goldkorn. “If you know what you’re doing, it is a after that.”
lot cheaper than any other media.” While experts agree that the online environment
Another straightforward way for companies is one that should be engaged within the proper
to manage perceptions of their brand and to context as a part of broader communications
maximize exposure is through organic search strategy, there is no denying that the Internet
engine optimization, which involves improving a has empowered consumers in China. Although
website so that it ranks high in search results and there is certainly some criticism of companies
helps potential customers find the site. and products online, there remains a massive
“Most consumers’ digital experiences with opportunity to harness the passion that Chinese
a company’s brand or product starts at a search netizens have for particular companies, brands or
engine,” says Schokora. When a consumer is trying products.
to find out about a certain company or product, “The source of a hot trend is just as likely to
the starting point is often the results page of search come from a 16-year-old netizen sitting in his
engines such as Baidu, Google or Yahoo. dorm room in Gansu Province as it is from the
“Companies should have in place the creative mind of an advertising executive being
appropriate search engine optimization to make paid thousands of dollars a year,” says Sun.
sure that their online visibility is maximized and However, the dynamic and complex nature of
the first page of search results gives the desired the Internet means that each company will have
image,” adds Sun. to spend the time and resources to understand the
online environment for its particular business and
The big picture what digital tools would be most effective.
There is no single best solution to connecting
The Internet is changing the way the whole with consumers online. “Remember that all of
world communicates. For companies looking the digital ad agencies and social media gurus
to engage consumers in China, where the – every single one of them – are making it up as
Internet plays such an important societal role, they go along,” concludes Goldkorn. “There is
it is important to recognize the paradigm shift no proven formula to advertising or corporate
taking place today. communications on the Chinese Internet.”
“We are seeing a shift in the communications
approach of brands from pushing things out, Justin Chan is Editor-in-Chief of Insight. He can be
towards enticing consumers to put things into contacted at justin.chan@amcham-shanghai.org.
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