The Chinese market is known for its dynamism and innovation. In recent years, the development of China’s digital landscape has been both unique and complex. For European brands, it sometimes seems like a black box, but local market trends are generating enormous attention.
Massive changes in the digital landscape
When it comes to digital marketing in China, WeChat and Weibo were once dominant platforms, similar to Instagram and Facebook in Europe. However, local marketers are now more interested in sales performance on Douyin, current influencer collaborations on Bilibili or their social media campaigns on Red.
The digital landscape in China is evolving rapidly. We have identified three major changes:
1. the presence of video material is increasing.
2. the more targeted platform algorithms lead to considerable fragmentation.
3. social commerce continues to open up new trading opportunities.
These changes have triggered unique business opportunities. In recent years, the ubiquitous use of mobile devices and streaming content by the Chinese population has encouraged a characteristic purchasing behavior: Shopping while consuming video content. This trend has effectively turned social media platforms into virtual shopping malls. This results in immense commercial potential: all that is needed to sell a product is a mobile device and a live streaming platform. The platform’s algorithm helps to find customers and the technology enables trading in a matter of seconds.
In the first ten months of 2023, TikTok’s Chinese counterpart, Douyin, sold almost 2 trillion RMB (274.2 billion US dollars) in goods via e-commerce, which corresponds to growth of 60% compared to the previous year. This volume exceeds the GDP of Germany’s largest city, Berlin.
Rapid change brings with it considerable challenges. With significant opportunities comes intense competition. In China, agility is essential. Thanks to our clients, who always demand a rapid response to change, we have always been able to adapt China strategies to remain competitive. In doing so, we have been able to gather extensive industry insights.
Challenges in sport: Combining emotions and creativity in video
Let’s take soccer as an example: thanks to emotional content, FC Bayern had already built up a large loyal community in 2016 and has become one of the most interactive European soccer clubs on China’s social media platforms such as Weibo and WeChat. However, as the platforms evolve and become increasingly fragmented, Weibo and WeChat are no longer the only mediums to reach soccer fans in China. To cater to the video trend and the brand’s global strategy to reach a younger audience, at the end of 2021 we launched an official channel on Bilibili – the video platform where Generation Z spends more than 100 minutes a day. With this step, the daily production of content became more demanding. The audience always expects creative, emotional content. However, the investment has paid off: the average engagement on Bilibili now exceeds Weibo tenfold.
Consumer brands: building communities in fragmented markets
For consumer brands, the complexity of the digital platform ecosystem in China poses significant challenges. Their primary question is how to reach potential consumers efficiently while sticking to their budget plan. The business opportunity in the Chinese market is so large that many Chinese brands exceed annual budgets of several million euros. It is no easy task for new players, especially European brands, to succeed in this highly competitive environment. Brands need to be smart and strategic, tell their story from a unique perspective that respects the local culture, and really focus on their target audience. The social media landscape enables them to accomplish this task. It allows for precise audience targeting and allows brands to build and engage a loyal community without getting lost in the mass of potentially 1.4 billion customers. At the same time, the challenge of identifying target groups is a dynamic process that requires continuous adaptation of the established strategy.
For example, we helped the German beer brand Paulaner gain recognition in the Chinese market by focusing on the large German soccer fan base and affluent German brand enthusiasts in China. Now, almost a decade later, we face very different challenges – Paulaner beer is already a household name among FC Bayern fans in China, but now we need to capture the heart of China’s younger generation. This requires a new communication strategy that utilizes the various new digital platforms. Once this change has been successfully mastered, a wide range of sales potential will emerge, led by social commerce.
Staying agile and adaptable
There is no one-size-fits-all approach to mastering digital communication in China. For us, the key is to continuously gain insights into the target audience, platforms and technological and social trends. A deep understanding of how platform algorithms work, how consumer behavior is changing and how key trends influence decisions enables us to develop tailored strategies for our clients’ diverse needs. Our spectrum ranges from sports and consumer goods brands to SMEs, industry and financial services.
The latest digital developments in China will always be exciting for us and offer enormous potential for both Chinese and international companies. As brands adapt to these changing trends, the Chinese market will remain a broad playground for innovation and sustainable growth.
