The 101 on China’s Digital World
There is the Internet, and than there is China’s Internet.
Working closely with my colleagues at Havas Media in Shanghai, I’ve been trying to grasp the differences (and similarities) between China and the U.S.’s digital landscape. Being that it’s my first time using WeChat, needing a VPN, and participating in the E-commerce holiday, known as Double 11 — I know there is more to discover before fully understanding how global brands can play within China’s digital world.
Let’s start with a few similarities.
Both the U.S. and China know how to innovate big and be the first to market. Innovation is homegrown, and both countries are incubators for mature technology. But, there are some fundamental differences making China’s digital world rather unique.
The three main differences are closed ecosystems, mobile usage and the growth of e-commerce.
THE 1,2,3s of CHINA’S INTERNET
1. Closed ecosystems
2. Mobile usage and innovation
3. E-commerce
1. BAT: THE BIG THREE
We all know about the great firewall of China. There is no Facebook, no Twitter, no Google, etc. China’s internet is fundamentally different than the rest of the worlds because it’s comprised of three closed ecosystems: Baidu, Alibaba and Tencent. Known collectively as BAT, Baidu is China’s version of Google, Alibaba leads E-commerce (think Amazon on steroids), and Tencent rules social media. These three dominating networks are where people spend most of their time. BAT has grown into one of the biggest internet ventures in the world.
Baidu, Alibaba and Tencent are their own ecosystems, each relying heavily on domestic use. It has proven difficult for China’s big three to expand abroad. And vice versa, U.S.’s internet companies have not been able to break into China’s market. That’s because internet in China is a closed environment, creating a divide in the digital world between China and everyone else.
2. MOBILE IS KING
Mobile usage and innovation in China has surpassed the United States. Many Chinese have never bought a personal computer, as a result smartphones have become the primary device. It’s no surprise that most mobile tech developments were popularized in China, such as the ability to make payments, hail a cab, order food, and live-stream all within one single mobile app.
Tencent’s WeChat not only plays the role of Facebook and text messaging, but it’s used to pay bills, order on demand services, find dates, and make purchases. WeChat is known as a Super App because it’s more than an just an application, it’s a robust operating system. Just about every daily activity, from social interactions to commerce, is done within WeChat.
3. CELEBRATING E-COMMERCE: DOUBLE 11 (Singles Day)
China has the world’s largest E-commerce market. Almost anything can be bought online. From imported products to locally made goods, online purchases are double the percentage of retail in China compared to the U.S. China has rapidly embraced e-commerce, to the point where a holiday has been created to celebrate it. In 2009, Alibaba registered trademarked Double 11, making it an official holiday — over the last few years it has grown into the world’s biggest shopping spree.
Every year on November 11, for 24 hours, users can shop thousands of discounted goods from international and local brands on Alibaba’s online stores. The event is bigger than the Super Bowl. Brands that have a presence in China doing 11.11 is not an option. In 2014 Alibaba set a Guinness World Record for highest online sales revenue generated by a single company in 24 hours. Transactions spanned across the border into more than 200 countries.
*This year Alibiba reported $17.8 billion of sales. A much smaller increase from last year’s growth in sales, leaving many disappointed with the online shopping bonanza.
3 Key Takeaways
What this means for brands who want to play in China’s digital world:
- International brands need to create strategies and campaigns which cater to China’s internet and population.
- E-commerce continues to reinvent itself, transcending borders and enabling brands beyond China to have a presence in the marketplace.
- Super Apps, such as WeChat, enable social and buying habits to be linked within one ecosystem. This leads to more robust insights and fuller profiles around a person’s online behaviors.
Reference Shelf
More articles to read up on China’s Internet
Half of China’s Ad Spending Will Go Toward the Internet
http://adage.com/article/digital/half-c/303175/
Alibaba’s Huge E-Commerce Fest Has Changed the Game For Agencies
http://adage.com/article/digital/alibaba-s-huge-e-commerce-fest-changed-game-agencies-china/306658/
Alibaba Wants Its $18 Billion Singles’ Day to Be More, Mean Less
https://www.bloomberg.com/news/articles/2016-11-13/alibaba-wants-its-18-billion-singles-day-to-be-more-mean-less
How China Is Changing Your Internet
http://nyti.ms/2ays4c9
