I originally published the following article April 14th, 2016, on Rude Baguette, France’s startup blog.
Last year, international polling and market research firm Ifop, conducted a survey among the Chinese middle-class in five main cities (Shanghai, Beijing, Guangzhou, Wuhan, and Shenyang) to understand people’s perception towards products and services from different countries around the world. The result is that the country of origin is indeed essential information for Chinese consumers: 70 percent consider it to be “very or somewhat” important when it comes to choosing a product or a service.
Inevitably, France is the country that is the most associated with Luxury, this contributes to associate France with dimensions of savoir-faire and creativity. However, the association with this sector conceals other good things France has to offer to Chinese consumers.
So how to deal with that if your company is, let’s say, a tech startup. Foreign firms obviously lack of visibility there and better educate their local consumers in order to raise their awareness.
In 2007, professional social network company Viadeo entered the Chinese market by acquiring its competitor from Tianji. 9 years later, and just a few months after raising funds to expand in China, the company decided to exit the Chinese market despite their 25 million Chinese users, to refocus in France. The company admitted that they at some struggle to get funded after their IPO in 2014. The company admitted that they didn’t catch-up with Chinese people mobile habits and had not enough cash flow to scale in this ridiculous-sized market.
On the other hand, we have App Annie. The now San Fransisco-based mobile analytics company founded in 2011 in China by French entrepreneur Bertrand Schmitt. Their product can track basic metrics as the number of downloads and users, but also user behavior and how it impacts revenue growth. App Annie is a perfect example of how companies need to adapt and take advantage of China’s environment, even with the aim to target a global B2B market like they did. They started the company in Beijing where they were able to leverage the high-quality engineering talents available in China and benefit from the huge penetration of mobile in the country. Today, App Annie claims to have over 400,000 app developers from 60 countries using its service, including 94% of the Top 100 app-editors.
An important factor of success in China, more than anywhere else in the world, is how companies and brands deal with public relations. With a 20-year track record of supporting clients in China that include the aforementioned App Annie and French IoT innovator Withings, as well as a range of other global tech stalwarts, The Hoffman Agency has a unique perspective on the market. Preceding the upcoming Hoffman Agency’s event — Stand Out in China: PR & Marketing Strategies in the world’s biggest market — took place at Le Hub in Paris, April 26th, 2016, Rude Baguette had the chance to speak with Cassandra Cheong, Hoffman’s Managing Director in Asia and a 25-year PR veteran in the region, and learn some key points about the Chinese PR landscape and how to take advantage of it.
PR in China is different and complex, starting with the fact that there are a lot of media in China, compared to a market like France where the media landscape is relatively simple and dominated by the major national newspaper and magazines. There are 2,000 newspapers and 10,000 magazines in China, and the number of publications is almost 50 times greater than 50 years ago. It’s a difficult maze for an outsider to navigate and really takes local knowledge to understand the nuances and hierarchies. Another notable point is that compared to Western societies, the Chinese press is very controlled, there are strict censorship policies that media are regulated under. You have to know the ground rules in order to be effective.
That said, the communications channels are mostly the same. All the usual platforms are available and used in China, not unlike other markets, including traditional media, online, advertising, etc. And just like in Europe with gatherings like the Connected Conference, events are an effective way to build relationships and gain visibility with customers, partners, and influencers, particularly in B2B space. But getting the most out of any comms or PR tactic can be very different than in the West, so again — know the local rules of the road!
Foreign companies often make the same mistakes in positioning themselves in the Chinese market: trying to change Chinese culture instead of adapting their business model to that of China (e.g. of why eBay failed and Alibaba thrived). Keeping focused and segmenting the market is also vital, you can’t be everything to everyone in China — the market is way too big and diverse.
Details matter in China. For example, companies should be careful about subtle things in their press releases; political views on China’s policies should be avoided and the use of accurate terminologies of what constitutes China needs to be respected — don’t call Taiwan a country, also Hong Kong is part of China and not an independent country. Don’t use sensitive words that might fall under the scrutiny of China’s censorship board.
Social media has become even more important than traditional outlets. The internet population is huge and the online culture is getting more and more intense and sophisticated as the growing power of WeChat continues to expand its functionalities and capabilities. Also important to remember — the popular western social media platforms are not as popular(Twitter and Facebook don't even crack the Top 5) — companies must understand how to use the commonly used Chinese platforms.
China likes to follow foreign tech stories, especially if it’s breakthrough technology. Many European and French companies have been successful in the press — and in the market in general — mainly because of their innovation, which is very respected in China. Also, you will see success with any kind of message that shows ‘In China’, For China’ commitment or similar messages or local relevance. The Chinese want to know that you are serious about their market.
Everything in China is relationship-based, that’s probably the most important thing for companies to remember — ‘Guanxi’ is still very much alive and kicking in China. So make sure you have someone who understands how networking and business etiquette works.
Nearly everything you do is of no importance, but it is important that you do it.
- Mahatma Gandhi