China’s private consumption is expected to increase from $4.4 trillion to $9.7 trillion by 2030. With older people becoming increasingly familiar with technology and the rise in popularity of the short-video content, having an effective digital marketing strategy for the Chinese market has never been more important.
China is already the single largest market for many multinational corporations being one of the world’s largest unified economic spaces. However, with fierce domestic competition, many foreign entrants are left scratching their heads on how to keep up with China’s ever-changing digital sphere.
Arnold Ma is a leading specialist in digital marketing, a technology enthusiast and entrepreneur. He has unique insight and experience from creating China marketing strategies for some of the biggest brands in the United Kingdom.
In this interview, he walks us through the most common challenges that Western firms face when creating digital marketing strategies in China and shares his unique East-West perspective on how businesses can succeed in the world’s second-largest economy.
Q. What inspired you to launch Qumin and what made you feel that there was a growing need for a company such as yours?
A. I’ve always loved technology; my earliest memory was coming over to the United Kingdom in 1996 and discovering the personal computer. Later, at university, I developed a love for advertising and marketing. Throughout all of my time in the UK, however, I always missed China. I missed the culture, the people, and mostly the food. I said to myself that when I graduated, I would find a job that allowed me to work on something China-related. And as China was finally gaining a greater presence on the global stage, I was proud. I was proud because China was closed for a long time to the rest of the world, and it was finally opening up.
Unfortunately, as hard as I tried, I couldn’t find a job that related to China and that I could confidently use my skill set in tech and creativity. So after initially working in various marketing roles but still feeling unfulfilled, I decided to form Qumin, with a mission to “Open the world to China.” I then met my co-founders Tom Nixon and Yan Peng, and together, we built a business and created jobs that we wanted, but did not exist.
Qumin was started to help global brands understand Chinese culture and engage with Chinese people. Over the years we’ve helped the UK’s largest tech company, SkyScanner, successfully enter China and then helping them—as the largest British tech exit to this day—sell to Ctrip. We’ve worked with brands such as Sony, Manchester United, Häagen-Dazs, Wrigley, the British Library and Kering.
However, more recently, as Chinese brands start to globalize, and as China continues to open up to the world, we are also helping Chinese brands such as ByteDance—now the world’s largest tech startup having surpassed Uber—to understand and engage with Western culture and people. We also continue to work with amazing, innovative Chinese companies such as Geely Automotive and China Mobile.
We found that our understanding of both Chinese and British culture works both ways, and so we work on connecting brands with audiences in a meaningful way.
Q. Why does the Chinese market require a different marketing strategy than, for example, the European or American market?
A. In answering question, most would immediately start talking about platforms and technology, and indeed, that is something that we need to be aware of. However, with all the focus on platforms and technologies in China, we completely overlook the people, why technology leapfrogs in China, as well as why and how service design integrates into people’s daily lives so rapidly.
Fundamentally, Chinese people are very different and the country’s socioeconomic changes against the backdrop of traditional values plays a huge part in all of the fantastic innovations we are seeing today.
Q. What are the most important instruments for digital marketing in China?
A. People, always the people. A close second is the product knowledge of the platforms people use. And finally, having the right knowledge and experience to overlay technology on top of the campaign to achieve hyper-personalization at scale. But it must start with the people. Hyper-personalization or Customer Relationship Management (CRM)-driven digital marketing will only work with real cultural insight. Go back to the age-old advertising principles and focus on creating stories that make people feel like they come from within their own communities and subcultures, rather than superficial content created with an outsider’s view.
A strong CRM strategy will work better in China than anywhere else in the world because of the oligopolistic nature of the large digital web of services you rarely need multi-channel attribution.
Q. How much more of an influence do you expect digital marketing to have on consumers’ habits over the next few years?
A. The line between “digital marketing” and just “marketing” is more blurred in China than anywhere else. For example, WeChat’s product ecosystem is the only one in the world where marketers can attribute offline purchases (WeChat Pay) to online engagement (WeChat). This opens up a whole array of CRM and personalization opportunities. For the audience that is inside this ecosystem—or web of services provided by WeChat and its brands—it means even more relevant and service design-driven digital products and platforms. We are already seeing this with the likes of Little Red Book, initially a niche user generated content-review platform, which is now branching into e-commerce but in the traditional sense ‡ it’s a new type of customer to customer e-commerce that WeChat stores has popularized.
Q. What are some of the most common challenges that Western companies have faced when it comes to marketing themselves and their products in China?
A. We see a lot of amazing, strong Western companies launching in China, then hiring a Chinese managing director with a background in sales and distribution, someone that has connections that get them into stores. Western companies feel like they must do this in order to succeed in China, as that is how Chinese companies have succeeded domestically.
In the process of “localizing,” these Western companies and brands overlook what made them so successful in the first place: their brand strategy or product design, as well as their insight-driven, long term approach to marketing and customer-centric business. The biggest mistake is opting for a Chinese approach in sales and distribution. The reason Chinese companies succeeded in the past with a distribution-led, product-led, presence-led approach is because China was closed to the world for so long. Competition and consumer choice were limited, but consumers’ behavior and expectations are changing quickly, as with all things in Asia. That type of functional marketing worked in the past, but will not work in the future.
Brands entering China need to realize that what they think is their weakness, insight-driven creativity and brand focus, is in fact their strength. China is no longer closed, it’s now open, filled with the world’ most fickle and mature consumers.
On the flip side however, brands must not get sucked into thinking creativity has to be irreverent or be led by provocative ideas—this is a western concept that only works well in certain cultures. Do not go down the irreverent route until you confidently understand Chinese people and their subcultures from a native perspective. Leverage “why you do what you do,” but do not “copy and paste” your western strategy into China.
Q. Do you see Chinese brands struggling with the same difficulties when marketing themselves in Western countries, or are the typical challenges that they face different?
A. Chinese brands also need to learn how to build a deeper level of connection with their audiences. We see the exact opposite with innovative and successful Chinese brands that are globalizing. Chinese companies have the tendency to rely on what made them successful in China with a sales and distribution led strategy, and thus marketing efforts that focus on short-term exposure rather than long-term brand building work. There isn’t a one size fits all strategy, but the best Chinese brands we’ve worked with have always been the ones that are humble and flexible, working to understand Western people and their culture, the marketing industry, ways of working and how to articulate their proposition in a completely different way to how they have done so in China.
Q. What are some of the most prominent digital marketing trends in China that Western companies should be aware of right now?
A. Social Selling is going to be big over the next three years. If you want your organization to be ahead of the curve, think about how to create a strategy that fosters brand loyalty among micro-sellers that have curated products among their private networks. In the next few years, true social selling or micro e-commerce will be the biggest change in the digital landscape of China.
Q. We’ve seen several blunders in the marketing strategies of Western big-name brands in China lately, how can companies effectively repair their reputation in the Chinese market once damage has been done?
A. One word, respect. While it is important to retain a creative approach to marketing, brands should not try and force a particular message in their China strategy. If you’ve already made a mistake, don’t fret, Chinese consumers are quick to pick up on mistakes, but are also very quick to move on. Go back to the basics and ensure that your next campaign resonates on a local level.
Dolce & Gabbana’s recent faux pas gained a lot of traction in their media lately. Previously they had conquered the hearts of many fashion fans and customers by focusing on their Italian roots and authentic story-telling, combined with an unfiltered satirical, irreverent voice from their founders, which has proven to be a great recipe for Europe, the United States and beyond, but it really backfired in China. Whilst there is nothing wrong with their brand strategy per se, unfortunately D&G missed the mark when assuming that their usual satirical and rebellious approach would have the same positive effect when parodying the Chinese culture.
Apple’s recent Chinese New Year advertisement however is a perfect example of how to build a meaningful connection with Chinese customers. Filial piety as a central value in Chinese culture is a concept that many westerners often find difficult to comprehend, but when used in their advertising campaign, found that it pulled on the heartstrings of Chinese people. The polar opposite of D&G’s execution, Apple’s creativity was local, humble and very different to their global or Western approach of experimental creative thinking.
Q. What tips do you have for those who are looking to stay updated on digital marketing trends in China?
A. It’s actually very difficult to do this from a Western perspective. My personal method is to simply go to China often and talk to people, which sounds simple, but really works. If you are serious about your China strategy, then make a quarterly trip to China. Every trip will provide you with new knowledge, new insights and expand your thinking. If you cannot afford that luxury, then follow China conversations on LinkedIn. We at Qumin (myself and Tom Nixon) also regularly share our thoughts and start discussions on LinkedIn to stimulate the creation of new ideas and strategies.
Q. What kind of an impact do you think Qumin has had?
A. It’s always difficult to talk about your own impact firsthand, we don’t work with many brands, but those that we do work with we build long-term relationships with. We want to ensure our focus is not too diluted. And we are most proud when we make a real difference to the brands we work with.
Take Skyscanner again for example, we launched them in China and were there for every step of their China growth, including changing their proposition, brand and even acquisition and integration with a local Chinese product—we couldn’t have been happier when they exited to a Chinese tech giant!
We were the first Chinese digital creative agency outside of China, with a mission to “Open the world to China.” We wanted to create a new kind of working result that the world has never seen before ‡ work that’s not Chinese and not Western, but something completely different. We will leave it to our clients and consumers to judge whether we’ve achieved that so far.