The advertising market in China is full of opportunities for those who can enter
At the mobile and the massive increase in the number of Chinese Internet users reached 618 million it is actually high time to raise the question of its real potential for an advertising agency. So what are the opportunities?
1. China is a booming market
With consumption and offers increasing in all sectors resulting in more intense competition it has become critical to create good strategies to differentiate yourself from your competitors. For doing so you need adequate resources, this is why many business increase their communication and marketing budget sometimes up to 60%.
2. Communication campaigns go digital
While the impact of traditional media, such as for example TV or newspapers, stagnates or even decreases communication campaigns are increasingly numerous on the Internet. Furthermore, television and Chinese newspapers lost respectively 2.75% and 9.17% .
However Internet advertising grows with an increase of 45.85% over the previous year, leading to a total of 63.8 billion CNY (Source: People’s Daily, the 43rd World Conference of advertising) . These figures show that the future of advertising is on the Internet
3. Weak competition in the campaign creation sector
Communication is a recent discipline because it goes against some important ideas and principles of the Chinese culture. In the China, people tend to favour practical actions that will create real and quick results….Something Marketing and communication are not. Hence the original reluctance of Chinese to invest in these areas. Although Chinese companies are slowly catching up , there is still a lot of opportunities for foreign companies wishing to set up in China.
Why is it like that?
China’s education system pushes students to boost their capacity to learn by heart. What for? Just because they need a good memory to be able to memorize thousands of characters that make up Chinese language
Therefore the Chinese students have had not much chance to develop a sense of creativity which results in a lack of adequate profile at national level in the world of communication and marketing and so little competition in terms concerning campaigns involving creativity. Since the latter is the core ability in that area, it explains why there are so little competitors ability is fundamental in this kind of activity which explains the lack of serious competition in this area
Besides creativity being an essential skill in design, Chinese culture does not encourage the risk taking inherent to creativity that is why copying is more advantageous, less risky.
As for foreign companies, they have to learn about China and its culture to succeed, such as Carrefour did, otherwise only failure is awaiting as learned E-bay the hard way.
4. Lack of maturity and experience of local agencies
Here two factors explain the lack of maturity and experience of local agencies first:
The “recent” opening of China to the capitalist world after years of hard-line communism led by Mao during the Cultural Revolution. While the Chinese media had only a single voice, that of the state, there were no real communication. Once things started to change communication agencies had to develop and expand in order to deal with the opening of China to the world. The rise of the internet led to the true development of local communication agencies
The youth of the Internet:
Internet is still young in China, and started to truly develop a decade ago, the infrastructures are fairly new which allowed the Chinese to quickly benefit from a high level of technology regarding the web as there was no need to return the others. However the youth has not allowed local companies to acquire the necessary experience to compete with other foreign companies that benefit from over 20 years of experience in this area
5. Over trust of Chinese to foreign companies at the expense of local actors
After numerous scandals of corruption, embezzlement trust the Chinese is almost entirely located in foreign enterprises. Overconfidence in the foreign companies is definitely an advantage because it means that Chinese, when having to choose between companies for two services comparable they will almost always choose the foreign company (if the course made the effort to adapt itself to the Chinese cultural codes. Indeed a company will enjoy a better level of trust at the initial contact with a potential customer than a local company would.
6. Lack of knowledge of the advertiser and subjective judgment
Chinese tradition is based on affect rather than on actual evidence of results. Chinese business partners like to forge a strong relationship with the people of the company with whom they will work. That’s why choosing a company is primarily subjective, based on affect, not mainly on the results obtained.
Chinese will often first take into account the affect it will have the impression of a person with whom he could potentially work by going to the restaurant for example or drinking the famed rice based alcohol, the Baijiu
This is completely different from countries like the USA or most of the countries of northern Europe that will primarily focus on performance before their attention turn to the relationship with the partner that will be a fleeting one unlike with the Chinese company.
So here we have a choice of the advertiser very subjective, which can be turned into an advantage by knowing Chinese culture to make good impression.
Chinese want to create strong, lasting work relationship which means that once you have this relationship you will have business opportunities with that person for a long time because she knows you.
7.Rise of Chinese national brands and colossal budget
Chinese domestic brands like Shanghai Tang want to break the stereotype of “Made in China”. To make it, they position themselves in luxury with big budgets and huge marketing communications programs to show that their knowledge and skill has nothing to envy to foreign companies. Ie: Herborist, high end brand with websites for the European American foreign customers.
8. The lack of service among Chinese and their tendency to one-shot
In marketing campaigns and communication are very important to establish a good customer service and finding good partners. To have a valid strategy, one must also invest over the long term because the return on investment is far from being immediate.
Even though they take their time to signing contracts they like to have returns on investment very quickly thus have mostly short term goals in mind. They do a lot of one-shot, short-term missions but may stop them before they can really enjoy their full potential
9. The Chinese people are very hard workers and first class doers
The Chinese are very industrious, and are willing to stay and work for a long time to finish a project. A striking example of this is the jiaban (加班).
Word for word, it is adding work. Chinese boss can reach a few minutes before the employee finishes his day to give him extra work to forcing it to stay much later, without being paid more. We are so far from the French 35 hours and famous paid overtime!
The Chinese also very good performers who will do what is asked of them without calling into question every time the guidelines given by their superiors as Westerners tend to do.
10. The positive spiral of Chinese market
With the growth of Chinese internet, companies must communicate to exist. When a campaign is launched, it may be slow to develop but it quickly creates a positive circle that will spread more and more quickly the information you will publish. The more people talk about the brand the more it will create more interaction the more people will want to talk to you through a process of emulation:
You always want to talk about what most people want. To really start a communication campaign must know how to do it. Also you must know how to maintain it so that actions initiated do not fizzle.
To go further
• As you can see China offers many opportunities for those who can seize them. What do you expect? To learn more, perhaps? It’s here
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