China is one of the most significant markets for advertising and marketing in the world. Not only that, Chinese mobile handset manufacturers are driving ad spends in India by infusing millions of dollars into advertising.
According to a GroupM report, China and India are expected to drive ad spends in 2017. The report said, “China and other “new world” countries continue to over-contribute to global growth, but a new normal more modest level of growth has settled in.” The report had said that India is the fastest growing market in the world's $10B plus (Rs. 1,000 crore plus) ad markets while China and the US account for half of all net growth in 2016 and 2017. Given this context, there is much that India and China have to learn from each other.
We sat down with Darren Burns, President, China and Chair, Creativity and Innovation, Weber Shandwick to talk about China’s marketing/advertising/PR industries and the major trends driving the Chinese industry.
Before we spoke about China, Burns told us about one overarching global concern that everyone needs to pay attention to: people across the world expect companies to behave like a person, not a machine. “Corporate communicators need to be the voice of reason and be the conscience of a company in a world like this. In the case of United Airlines, for instance, the company reacted in a way that was very mechanical and not in a very humane way. People know that companies will screw up, so it is all about how you respond to situations. If you apologise, learn something and improve your company as a result of that, people respond to that. To be real is more important than it ever was; we will see a swing back towards that now. It can’t go on the way it is,” he said.
Edited excerpts from the interview:
You have said that influencers in China are bigger marketing tools than brands themselves. How did that happen?
In China, the state-owned media is very prominent. So, when people engage with influencers they find that to be a very real, believable and relatable experience. Also, in a large country like China, it will be impossible for people to actually interact with celebrities. However, with influencers, they feel like they are part of a community. Influencers are also entertainers, who use their wit and humour to talk about brands and products.
Could Indian social media influencers become as prominent as their Chinese counterparts?
In the lifestyle and consumer fashion sector, I surely expect this trend to rise. And you already see that with some YouTube stars who are rising and becoming important. But I don’t think they will supplant media necessarily. Indian media is a lot more dynamic and independent. The power of social media influencers will grow as internet penetration increases.
Also, the Indian media landscape is very wide unlike in China where it is completely digital. It is easier to leverage the power to influencers in China than it is in India. In India, we still consume print, television and other traditional media. The power of influencers is equally strong in India, just that it gets dwarfed by the landscape of the media in India.
You shared how Chinese social media influencers are also increasingly going live on social media platforms and sharing their daily activities with their online communities. How do the Chinese treat privacy?
It is a very interesting phenomenon. On one hand, people are very private but on the other hand they give a lot of information away. It is a very bipolar thing. People happily give away information like sign up for email with a brand on WeChat as long as the brand gives them some value. In fact, according a research we conducted, the Chinese are way more positive about AI than many other countries. The benefits of AI—like automatic vehicles—are always discussed in China. The agenda is to invite government and internet players to China and the focus is on how AI would be great for Chinese business. In other countries, there is a huge debate about privacy but in the future there could be more of a debate about privacy in China too.
Egypt has recently hired Weber Shandwick for image building purposes. How does the Chinese government leverage PR and employ PR?
We did the global PR for the Beijing Olympics in 2008. We also supported the World Expo that was held in 2010 in Shanghai, and have won the bid for the Beijing 2022 Winter Olympics. It is during such international events that the Chinese government employs PR firms; not so much for crisis management but more for proactive engagement. The Beijing government tends not to hire PR firms for image building. The Chinese government has very strong embassies around the world, and they have a lot of platforms like the Confucius Institutes where they try to teach Chinese and have a kind of soft power. So, China is really trying to work hard on how they build soft power that attracts people like how the US attracts people with its soft power.
In what way is the Chinese marketing/advertising industry similar to the Indian industry?
To be successful in countries like India or China, you need to have a big market mentality and really need to think about scale. So, when clients give us a minimal budget, we have to tell them that we can’t. We will need to roll out campaigns in multiple cities in multiple languages to achieve the kind of scale that is needed.
The growth of internet in India and China is also similar. There are still a lot of people in China who are not connected via the internet compared to the West. That’s a huge upside in terms of ecommerce, etc. There is still a huge opportunity for growth in those sectors.
How does the ban on Google and Facebook impact the Chinese marketing industry?
China has a very strong indigenous internet ecosystem led by Baidu-Alibaba-Tencent (BAT). In fact, what is interesting with Alibaba’sTimo and Taobao, which are major ecommerce platforms having more than 50% market share is that they become an advertising company themselves. So, the content actually sits on the ecommerce platform versus sitting on the social sites. Nearly 80–90% of the digital ad spends go into BAT in China.
Chinese internet brands find it difficult to adapt locally because one has to be hyper-local and adapt to the consumer behaviour otherwise people don’t engage. However,Chinese brands that are going abroad are increasingly embracing Facebook and of courseusing Google. The Oppos and Vivos of the world are definitely using these platforms to reach a global audience.