Archive for the ‘China’ Category

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China: Where Bargaining Is A Way of Life

In China on July 31, 2011 by dariguti Tagged: , , , ,

I go gaga over sales (and I’m not talking about the singer).

This appreciation for sales probably goes back to a very young age. My grandmother would pick me up everyday after school and often she would take me shopping. She introduced me to the wonderful world of consumerism. But, she was not only an avid shopper she also had a sixth sense for sales and bargains. She was skilled. Thanks to her, successful bargain shopping was a fundamental part of my formative years. Today, sales are my addiction. My appreciation for items has a direct correlation to the percentage off regular price that I paid for it. Nuts? Not really, everybody likes stretching his or her dollar or in the case of China, their yuan.

CNN’s Eunice Yoon couldn’t have said it better. In a country were labor rights are forbidden, the term collective bargaining takes a whole new meaning.  The new trend is group buying or, as known in Chinese: tuan gou.

CNN REPORT: Group Buying in China

You might be thinking, where is the innovation in that? The United States has Groupon, Living Social, Buy With Me and tons of others group buying websites that offer great deals. Well, this is a somewhat different approach.  I bet you’ve never seen a Groupon with a $1,500 discount on a new Audi. If you see the report by CNN linked above, you will meet office worker Jin Fen, 26, who says he spends an hour and half every day looking for bargains on the web. Last October he grouped with four other strangers and managed to save over $1,500 when buying a new Audi.

This is basically a flash-mob-meets-shopping strategy that stems from the Chinese tradition of bargaining for the purchase of goods. It’s simple one buyer connects with other buyers who want to purchase the same product and agree approach the vendor as a group. These groups are sometimes acquaintances or can also be groups of strangers that connected through online forums. By “bulk buying” consumers are able bargain a lower price and businesses simultaneously can sell multiples of one product. Everybody wins.

Chinese online innovators are leveraging this trend as a business opportunity and developing group buying sites much like the ones we know. This new business model is now a huge trend in China and it’s getting massive consumer support.

In fact, according to SinoTech Group, group-buying sites grew dramatically in just two years (early 2009 to December 2010) going from four to nearly 1,700 and quickly increasing in numbers. Most of these businesses will quickly tank because of lack of consumers, lack of vendors or lack of credibility but quite a few have managed to become emerging leaders in the industry.

The real innovation on this new business model is that Chinese consumers are known to prefer cash-on-delivery or checks to online payment systems. Online shopper Fang Hua said: “I usually opt for cash-on-delivery. But I have succumbed to impulsive buying on group purchase websites, because the prices are so low!” Today, one in 10 Chinese consumers are shopping online, changing consumer behavior in China.

Will this trend live on in China? I think e-commerce has taken its time but is now steadily developing in this country. Plus, a good deal is a priceless commodity that never gets old, no matter where are you from. Will it substitute the in-person bulk buying approach that the Chinese consumer has mastered? Highly unlikely. Bargaining in China is more than a strategy; it’s a way of life. Take it from a bargain aficionado, there is nothing like the thrill of a negotiation and the control you feel when you walk away from what you consider a bad deal.

It’s about increasing your purchasing power.  Many consumers around the world are no longer satisfied with the usual retail experience. This consumer behavior will continue to influence the market and new business models will be developed considering this. Consumers need to take the power and run with it. It’s about time the weight starts shifting in our favor.

Lessons learned? The Chinese have a point…don’t buy retail.

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For the Love of Yao

In China,USA on July 31, 2011 by jmpea Tagged: , ,

It saddens me to say that the NFL lockout (well former) is not a concern for everyone.  There are actually people out there who could care less about what happens to the NFL.  In fact, I can give you about a billion of them who feel that way.  If there is one thing I can say about China it is that they love their sports. As of recently, basketball has specifically become the popular sport.

Over the past few years the popularity of basketball in China has increased exponentially.  Some will say that it is because of the high penetration of internet usage or more players traveling internationally, but I suggest a one-syllable word, YAO.  Yao Ming has single handedly popularized the once dominated American sport.  With the pressure of carrying the weight of an entire nation on his shoulders, Yao has been the face of basketball in China for the past decade. 

As China continues to grow and release some of their barriers of internet usage, Chinese citizens have been allowed to take a more active role in the growth of the sport through online voting. Since the inception of online fan voting, specifically for the NBA All-Star, China has always played a vital role. They continue to rely on social media to connect with others by supporting various athletes and engaging in dialogue about basketball.  As his fame prevailed in the U.S. his legacy was extended at home.

In all fairness China does not just show favoritism to their locals, but they are deeply in love with basketball. This was shown as Dwight Howard took a trip to China after being crowned the champion of the dunk contest. China even likes soon to be champions, as they are one of the few groups that support the Miami Heat. None of this would be possible had it not been for the 7 foot mild mannered giant, Yao Ming. My only concern is that with his recent retirement, and billions of those who are hoping the NBA can resolve their lockout, how will this big void be filled. Will his retirement break Chinese interest in basketball or merely slow it a bit?

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Its Game Time and NBA China came to Play

In China,USA on July 31, 2011 by Nicholet123 Tagged: , , , ,

Chinese basketball icon and eight-time NBA All-Star, Yao Ming, recently announced his retirement from the NBA. The announcement of Ming’s departure from the league has left many questioning whether his decision will severely impact the basketball market inChina.

My intuition is no.

The sport will continue to have the mass appeal within the Chinese market as the fate of basketball does not simply lie in the hands of one national All-Star. In fact, the institution of basketball has traditional roots in Chinathat can be traced as far back to when the game was originally created in the US. In 1892, YMCA missionaries journeyed to China, carrying “The Thirteen Rules of Basketball” and within short time, basketball was declared a Chinese national pastime.

The same holds true with many other countries around the world and the sport has further gained increased popularity within the past several decades, in particular. While they maintain a presence in multiple other markets worldwide, NBA China, by far, leads the way in regards to audience reach and popularity. First established in 2008, the league serves as a catalyst for accelerating the nation’s already growing basketball popularity and culture. It has been estimated by the Chinese government that 300 million people in Chinaplay basketball—nearly equivalent to entire population of the United States. Not only does this giant market have strong interest for the sport, fans are also engaged across multiple different traditional and digital media outlets.

The allure of 300 million basketball players ultimately led to the NBA establishment the NBA China entity. However, the approaches used for reaching the Chinese audience is what made their strategy worth taking a closer look into. For example, there are several professional basketball leagues already in place in China, such as the Chinese Basketball Association (CBA), which is almost entirely regulated by the government. NBA China, on the other hand, is built more off an aggressive business model in which audiences are engaged through broad media play, along with sponsorships, promotions, events and an arena-management venture. This open approach will allow the NBA brand to grow, but also serves to increase popularity for the sport of basketball in partnership with a number of key players in the Chinese market.

Key Partnerships:

1-      Social Media: Last year, the SINA Corporation announced that were to become the official operator of the NBA’s Internet site inChina, NBA.com/china. SINA isChina’s leading online and mobile news and content provider and also has a growing social media presence as well.

However, arguably the most vital aspect of this partnership involves NBA China’s access to China’s most popular micro-blogging platform, Sina Weibo (akin to Twitter in the US). The functions of Sina Weibo far surpass that of Twitter by allowing users to create threaded comments, groups, audio messages, IM and direct video uploads. Its is because of these functions, the social media platform has become increasing popular in China currently with more than 100 million registered users and expects to keep growing rapidly. Currently, the NBA has 4.35 million fans on Sina Weibo and clearly has the potential for more as the brand continues to grow inChina.

The strategic alliance makes SINA an Official Internet Partner of the NBA inChinaand will provide a interactive user experience giving fans inChinaunprecedented access to their favorite teams and players.

2-      Government: Since the government of China has a strong hold over just about every industry (including broadcasting and professional sports), the NBA’s decision pursuing business within the Chinese market was undoubtedly difficult. Although several limitations existed, the NBA has so far been successful in China. This can be attributed to the fact that the NBA choose to work in mutual partnership with the heavy-handed government, rather than in competition.

Financially, the motivation for the NBA pursuing business within the Chinese market is clear: China has become the NBA’s largest international market, and the NBA’s revenue in Chinais growing at a rate of 30% to 40% per year.

However what’s in it for China? The CBA already 17 teams andChinacompetes internationally in the Olympics as well as in other regional events.

Well, some would argue that the Chinese government views their sports as a projection of power, strength and obviously, national pride. Anyone remember the elaborate spectacle that was 2008 Beijing Summer Olympics? Many Chinese athletes are “bred” from a young age using a soviet model for athletic development, in which selected children are sent to special state-sponsored “boot-camp-style” training centers.

 Therefore, both the NBA and the government want basketball to succeed in China, but for different reasons. So much so, that both parties have invested valuable resources on increasing the love of ‘game’ within the heart and minds of the Chinese in efforts meet their own intrinsic goals.

Future of NBA China:

Now, although Ming retired from the NBA, that does not mean the end of basketball fans in China. He still maintains deep ties to both the league that afforded him worldwide fame and to the nation gave him the foundations to build his international career.  It is the hope that other Chinese athletes will do the same. With an average 30 million viewers per week, the NBA brand continues to be strong and new focused efforts in the Chinese market are a great step in the direction of building brand loyalty.

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How Benefit Cosmetics is Conquering the Cosmetic Market in China

In China on July 30, 2011 by artemisaeb

Benefit Cosmetics, a divisional unit of LVMH Moët Hennessy, is a beauty brand based in San Francisco.  With a large majority of their sales coming internationally, Benefit has expanded to sell their products, including their one-of-a-kind cult favorite products in more than 35 counties.  This Spring, Benefit expanded their online presence into China with a new eCommerce website to accommodate millions of Chinese consumers.

Benefit Cosmetics is in a prestigious set of powerful U.S. retailers and e-commerce players investing in China’s emergent online retail market.  Retailers that have announced investments in China in the last 10 months include Wal-Mart, Apple Inc, and Gap Inc.

Why China? They’re online. They’re shopping. And they’re social and mobile fanatics.

According to the China Internet Network Information Center, as of December 2010 there were 161 million online shoppers in China. In 2010 alone, consumers in China spent over $48.8 billion online, with predictions from Forrester Research projecting that e-commerce sales will more than triple to $159.4 billion by 2015. Growing internet usage and sales aside, and most of them, over 303 million in fact, are using their mobile phones to surf the web.

You won’t find Facebook or Twitter in China, but you’ll find plenty of other social media and microblogging options (dare I say copycats) to pick from in the social media landscape. According to eMarketer, social network users in China will more than double in number to 488 million in 2015, from 207 million in 2010.  What does this mean to retailers? According to the same eMarketer study, individuals in China use social networks to communicate and follow brands and websites, even promoting favorite products across their online networks.

What Can Other Retailers Learn about Digital Expansion Into China from Benefit?

Benefit launched their own eCommerce website to appeal directly to Chinese consumers.  But how did they do this?  I recently spoke with a digital executive at Benefit Cosmetics that explained a few things they did to launch their eCommerce presence in China including:

1.     Embracing local partners. Benefit worked with a number of different local agencies to launch their eCommerce website. They also have a project manager on-site in China to manage these relationships.

2.     Don’t depend on traditional marketing. Benefit “took it to the street” to get the word out about their products and new website. They invested in advertising in taxi cabs and got active with blogging. With a strong, and growing, microblogging culture in China, Benefit uses this channel to listen to and communicate with their fans and customers.

3.     Exclusive offers in the land of deal-seekers. Chinese consumers are the most savvy bargain shoppers. To stand out, Benefit offers consumers what they can’t get anywhere else including samples and gifts with purchase.

What didn’t come up in our conversation? 

Benefit has done a beautiful job of engaging with their target markets in China.  To compliment their new, sleek website for China, Benefit Cosmetics is active on multiple social networking and microblogging sites: Kaixin and Weibo.

With Sina Weibo, a platform similar to Twitter, users post 140-character messages as well as videos, photos, comment on updates, and more. In China, nearly 50% of these updates are sent from mobile devices.

Benefit is actively posting on both platforms, incorporating lessons learned from expansion into other social platforms all over the world as well as paying specific attention to differences in how those in China use social networking.

What should be in the next phase of conquering the hearts and minds of Chinese beauty product enthusiasts?

Embrace online video. While Benefit Cosmetics has embraced video in the U.S. and Korea they are not using a specific platform in China to share product news with consumers. Benefit may even want to consider having their own brand ambassadors or stylists specific to the Chinese market as the “voice” of these videos.

Keep your eyes on mobile.  As the mobile market continues to grow in China, consumers will demand more content including games, contests, and more from their mobile devices. Since Benefit knows cosmetics are a top topic of conversation on on social media sites, creating fun, engaging, interactive content could be the next step for Benefit to conquer the cosmetic market in China.

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A BabyTree Grows In China

In China on July 30, 2011 by Abby Tagged: , , , ,

I was excited to research China this week for our global social media class – my good friend Lucila is currently in Yanqing teaching English with an organization called Cultural Embrace.  I love reading about her adventures on Tumblr, and I was glad to have an excuse to do a little more research on social media in China.

The BabyTree homepage

One of the sites I kept coming across was BabyTree.  BabyTree is a social networking community for parents with children up to age 6 in China, and as of last year saw 12 million monthly visitors.  Parents can visit the site to ask for advice, read product reviews, chat with other parents, blog, share photos, and purchase products.  The site has been called the “Facebook for parents.”  My friend has shared that every host family she has met during her travels has been so determined to make well-researched and thoughtful choices for their young children, so it’s understandable that BabyTree has seen so much interest.

With so many parents interacting on one site, BabyTree positioned itself as a highly desirable advertising space with a captive and well-defined audience.  International companies such as Pampers, Huggies, Gymboree and Disney are among the advertisers who have launched contests and advertising campaigns with the site.  

How BabyTree Became So Successful

Targeted Outreach.The first way BabyTree was able to become so popular in China was founder and CEO Allen Wang’s approach to marketing.  Instead of spending a lot of money on advertising, he focused on getting people to talk about BabyTree in places where they already congregate, including online and offline communities and events.  The site also tailors recommendations and advice based on each user’s location and the age of their child, so users feel connected and get personalized, useful information.

BabyTree has become of the largest photo-sharing sites in China

Integrated Content.   BabyTree provides a variety of tools and resources to parents all in one place.  Not only can they review the best products and talk to other parents like themselves, they can engage in conversations, share news, ask questions to medical professionals, and easily upload photos.  Because of the photo-loading tools, the site has become one of the largest photo sites in China.  Users never need to leave the site – BabyTree combines commerce, advice and social networking all in one site.

  Future Growth

BabyTree has recently partnered with Ogilvy & Mather China to launch the China Moms’ Happiness Index (CMHI).  The index provides in-depth analysis of factors that contribute to Chinese moms’ happiness, and market news. This tool will be extremely helpful for advertisers looking to reach (and understand the needs of) a very targeted audience, and will likely support increased ad revenue for BabyTree.  

BabyTree’s ongoing success, coupled with the new data from the CMHI, set the stage for even greater reach and engagement.  But to remain a trusted source and social network, BabyTree needs to stay true to their targeted approach and continue to offer tailored, localized content to its users.

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How To Be An “ECommerce Pioneer”

In China on July 30, 2011 by KHughes Tagged: , , ,

Currently, I am working as an Executive Assistant to the CEO of a Swiss skin care line in Washington, DC.  Don’t be fooled, however; the title Executive Assistant may not be what you think it is.  Rather, the position really has no boundaries.  From grocery pickups to creating baby shower invitations or optimizing the company’s ecommerce site, I can really say I’ve done it all.  It is through my time with the company that I have grown to realize the importance of one’s ecommerce presence, especially in a small business setting.  One of the largest tasks that I’ve been assigned to is increasing direct to consumer sales, by implementing SEO and brainstorming ways to have our website develop DTC sales.

Recently, Yuan Jiang, a young Chinese entrepreneur, has been deemed an “e-Commerce pioneer.”  It is through his site, YesMyWine.com, that Yuan is moving over 10,000 bottles of wine per day, producing annual sales of over 20 million dollars. After reading an article on Time.com about Yuan and his ecommerce accomplishments, many thoughts race through my mind…

How is Yuan doing this? 

YesMyWine.com has done a great job of knowing and relating to their passionate consumer base, that being the wine connoisseur.  They have provided a one-stop shop for purchasing wine, while also incorporating an interactive aspect, which adds to the online experience and appeal.

YesMyWine.com also offers free membership, so that customers can take advantage of discount prices on wine.  But more importantly, in my opinion, what makes YesMyWine.com so different than other discounted sites, are their interactive options. YesMyWine.com provides users the ability to create their own profile in a micro-blogging platform called The Wine Cellar that is embedded in the site.  The Wine Cellar allows members to share thoughts, reviews and stories, as well as interact with other members. 

Besides providing members with a platform for sharing, Yuan Jiang believes that member bloggers will spark interest with their posts, blogs and pictures to guests of the site.  This will then promote guests to comment; in turn, building membership. Through this, YesMyWine.com has, and will continue to develop, not only a large customer base, but more so, a wine connoisseur community.

Why is it working?

YesMyWine.com works; first, because of the quality and price of the products they provide.  Moreover, YesMyWine.com really is a one-stop shop for the wine connoisseur, offering high caliber products at a discount rate.

Secondly, and possibly the reason for its success, is because YesMyWine.com has done a great job creating a platform for conversation for members and non-members.  The interactive aspect of creating your own profile to upload pictures, blogs and comments is a great idea, given that wine lovers are normally so very passionate about their wine choices; this is a great way of knowing your customer base and giving them a platform to share on.  

Through the Wine Cellar, YesMyWine.com’s micro blogging platform, YesMyWine.com is doing an amazing job creating buzz, starting conversation, in turn bringing members and non-members to their site.  This can be measured by their close to 4 million members, and counting more, each and every day.

Overall, I feel their interactive aspect is a great model for ecommerce growth and sustainability.

What’s next?

My suggestion for YesMyWine.com would be to optimize the site by implementing search engine optimization.  After looking in their source code, they really haven’t optimized with any keywords or meta description.  Incorporating this would allow additional users in China, as well as worldwide shoppers, to find and explore the website quickly, easily and organically through search engines.  Furthermore, YesMyWine.com is one of the few Chinese websites that does not need to pay for advertising through other sites; this could be because of their blogging and interactive initiatives.  If they were to optimize the site, it would allow them to develop more and more members on their own, thus minimizing future need for purchased advertising.

What can I take away?

By exploring YesMyWine.com, I’ve come to the conclusion that the ecommerce site of our company would benefit from the development of an interactive platform.  First and foremost, we need to allow our customers to post reviews of the products. By giving users the ability to voice their opinions, we can learn what our customers want and need, like and dislike. Obviously this opens up the possibility for negative feedback, but negative feedback can be a great learning tool.

We also need to work to create conversation with our customers directly on our website.  We do have a blog, but this doesn’t really give customers a free forum for discussion and sharing. We could do this by first creating a blog, then asking for their opinions and inviting them to share comments or ideas.

Lastly, as a small business, we don’t have the profit margin or consumer base to offer all our products at a discount rate on a regular basis.  At this time, we offer sporadic specials, primarily given to meet sales goals.  By offering a monthly special, we would encourage users to check the site more frequently; in turn, driving sales of their favorite products and promoting the purchase of products they haven’t tried before.

Overall, as a team member of a small business, I am always looking for inspiration. Yuan Jiang’s successful ecommerce site, YesMyWine.com, did just that.  I truly believe that by implementing an interactive aspect to our website, providing consistent specials and creating buzz, much like Yuan Jiang did, we can increase our DTC sales.  

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Kraft’s Hope Kitchen brings Nutrition and Health to Rural China

In China on July 30, 2011 by jessicamurray22

I love to eat, especially some of the deliciously good items owned by Kraft Foods Company.  From Kraft Mac & Cheese, to Oreo’s, and Wheat Thins, Kraft makes some of my favorite food choices.  While struggling to find an idea this week to explore, I thought about looking into what Kraft Foods China was up to.   Through my exploration, I came across Kraft Foods China’s “Kraft Hope Kitchen,” a charity project that really peaked my interest and thus became the topic of this post.

What is it?

“Kraft Hope Kitchen,” is a joint effort charity initiative that began in 2009 between Kraft Foods China and the China Youth Development Foundation (CYDF).  The goal of the project is to help bring nutritional and quality food, in addition to increasing the overall supply, to school children living in China’s rural areas.   In it’s first year, Kraft Foods China and the CYDF, through its monetary donation of RMB 5.5 million, set up the first 100 “Kraft Hope Kitchens.” By 2010 it was estimated that the kitchens created had been able to feed 50,000 hot meals to rural Chinese school children.   This past May, the project set up an ten more “Hope Kitchens.”  In addition to building the kitchens the project also educates the children and the headmasters on food safety and nutrition.

How are they promoting it?

As a part of the “About Hope Kitchen” section on the Kraft Foods China site, they state, “Kraft Foods China, together with the China Youth Development Foundation, will work together to expand the Kraft Hope Kitchen project by involving more societal participation.”  Currently, Kraft Foods China has a website dedicated solely to the initiative.  They also have information on the China corporate site about the program and the awards it has won.   In addition, the program has been discussed on various news programs in China, and the video clips have been posted to the very popular website, Tudou.com.

What they could be doing?

An effort such as “Kraft Hope Kitchen” can use as much time in the spotlight as it can get.  In order to engage the people of China and get them to actively help in the mission, I believe Kraft Foods China and the CYDF could work towards expanding its message in a few ways.  First, the CYDF does not make any major mention of the program on its website, there is no separate link for the charity, unlike its other projects, all of which have their own pages.  I believe it is important for the CYDF to have a separate page discussing the “Hope Kitchen” project.    Second, given that video sharing sites are a major channel of communication in China, creating a video to be shared about the project could help drive the movement forward.  Third, they could leverage leaders to help in promoting the cause.   In April 2011 the Rotary Club of Shanghai awarded the effort the first “Rotary Leadership Award,” for its work in bringing nutrition and food to the children of rural China.  The award, which is supported by AmCham, European Chamber of Commerce, and the China-Italy Chamber of Commerce, helps give an even greater voice to the project, which should be capitalized on.  Asking for recognition on the homepages of these organizations could help give notice to “Hope Kitchen.”  Lastly, utilizing sites such as RenRen, the number one social networking site in China to help spread the message, whether by posting videos about the mission, or creating a game that can be played in relation to the projects goals, there are several avenues to explore using this ever expanding networking site. 

“Kraft Hope Kitchen,” has made amazing progress thus far.  With a greater step into digital promotion of the campaign, it could soon make an even bigger difference.