Comprehensive Introduction to the Chinese Online Market

A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET
Are you aware that most western online platforms like Google, Facebook, Instagram, WhatsApp, YouTube, Netflix and many of the ones you are using every day are actually BANNED in China?

Why? Because of the strict internet censorship provided by the Great Firewall of China. China is constantly controlling internet traffic and blocking access to most foreign websites. This means that western search engines, social media channels, messaging system, and e-commerce platforms are all outright banned.
Based on the above, from just having a presence to being actively involved in the Chinese online market presents quite the challenge, but no ambitious international company wants to give up on the largest consumer market in the world – nor should it. If you want to implement an effective marketing strategy to promote your brand in the Chinese online market, you must get acquainted with the network situation in China first, both its positives and its negatives.
The Internet and  Online Market Situation in China:
China has the most internet users in the world, around 800 million accounting for 21% of the world’s total internet users. Internet penetration in urban areas recently rose from 71% to 74.6%. From an age demographic, 10 to 39-year-olds represented 67.8% of all internet users in China. Also, 98.6% of internet users accessed the internet through mobile devices in China. Today, on average, the Chinese spend three hours every day on their smartphones, mainly on social media and e-commerce platforms. Hence, a strong mobile presence is fundamental to a brand’s growth, development, and continuing presence in the Chinese online market.

1. Online Search Engine

No: Google        Yes: Baidu

Baidubaidu

  • Google is banned in mainland China; the biggest and most popular Chinese search engine is Baidu.
  • It is ranked #5 in the world for traffic according to Alexa. Baidu states that over 90% of China’s Internet users use Baidu search and that there are hundreds of millions of searches performed each day.
  • Baidu also has an advanced pay per click marketing platform. In many ways, it is similar to Google’s, but there are also many differences in how ads are displayed and managed.
  • Baidu prefers sites that use localized servers. This means that those that are hosted locally in China will appear higher in the search engine results page (SERP). For domains, sites that use .cn domain takes preference over all other domains.
  • To host your website locally in China, you will need to apply for an Internet Content Publishing (ICP) license for which you need to obtain a local legal entity first.
  • Compared to Google, it takes a longer time to get a new website indexed on Baidu. This is due to the tighter regulations on website content in China.

2. Social Media & Messaging Platforms

No: Facebook, WhatsApp, Messenger, Instagram, Twitter 

Yes: QQ, WeChat, Sina Weibo

WeChat 

  • The most common all-in-one messaging features are text messages, instant voice message, a walkie-talkie, video, and audio calls.
  • The social feature called “Moments” allows users to upload a number of images or videos so their friends can comment or like the post.
  • WeChat is widely used for business promotion, as it allows you to create business accounts and add your followers, or future followers, to this account.
  • CRMs for many Chinese retailers, as many brands send information about sales and other promotions by public accounts on WeChat or send red packets for discounts to group chats to drive engagement.
  • WeChat also has a number of mini-apps allowing people to use for partner services, book a taxi, book appointments in hospitals, paying all kinds of bills.
  • On top of being a social media platform, WeChat is also leading payment operator. From major supermarkets to the smallest of street vendors and taxis, you can pay for almost everything via WeChat in most of the places China.
  • WeChat is mostly used on Chinese mobile devices, but you can download and try the English version to explore various functions. Once you have an account, you may use the web version by scanning the QR code from your mobile device to log in with no password needed.

QQ qq-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • QQ is an instant messaging (IM) platform for PC and mobile that has become one of the leading social platforms for young Chinese users, with its diversified functions and services. It is the world’s 7th most visited website, according to Alexa.
  • QQ allows its users to communicate with each other through text, video, pictures, and stickers, as well as decorate their personalized avatars, chat bubbles, and profile photo widgets.
  • It offers services that provide online social games, music, shopping, microblogging, movies, and group and voice chat software.
  • Synchronize the IM software with other online services and social media platforms, including email, blogs, microblog, online games, and even online payment platforms.
  • There are several ways to do free QQ marketing. Publishing ads and links to friends and discussion groups, allowing other users to open a brand’s Qzone and account.
  • Besides those free tactics, Tencent offers paid marketing programs too.
  • Additionally, users can access QQ wallet and experience innovative mobile payment options including mobile top-up, online shopping, and bank transfer.
  • There is an International version of QQ, you can download and try it here.

Sina Weibo weibo-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • The Chinese Twitter, Facebook – Weibo is the Chinese word for “microblog”, it acts as a large source of informational and trending content. Companies, organizations, and celebrities in China have Weibo accounts to interact with their customers, fans, and followers.
  • Users can follow individual accounts, like, and share their posts similar to Twitter’s tweets and retweets. The users can also upload images, videos, and GIFs.
  • This is one of the most popular platforms for KOLs in China to work on.
  • „Trending topics“ features a list of current popular topics based partly on tracking user participation and partly on the preference of Weibo staff. Once a topic is trending, it often becomes a heated issue and can have wide-ranging social influence.
  • One of the most recent features of Weibo is Stories. „Weibo’s Stories“ is a video function allowing users to record a video and save them in a separate „Story“ menu in their profile page – similar to a Snapchat, Facebook, or Instagram.
  • Weibo has also launched a new „Vlog“ function. Every video with a hashtag VLOG will be available in the main search page under „VLOG“ sub-menu.
  • Weibo Paid Ads offer an average organic post view of between 10–15% on Weibo. In order to attract more followers, there are 3 types of paid ads options available: sponsored post, Weibo tasks, and Fensitong.

3. E-commerce Platforms

No: Amazon, eBay       Yes: Taobao, Jingdong, Pingduoduo

China has the largest and most dynamic e-commerce market in the world and it is still growing. According to the China E-commerce Report, in 2017, the total value of Chinese online trading had reached 29,160 billion CNY, which occupied 40% of the global e-commerce market and up 11.7% compared with 2016.

“68% of consumers in China say their shopping choices are influenced by social media.” -according to Digitalcommerce360.

Taobao Taobao

  • The Chinese Amazon, EBay – Taobao is a Chinese online shopping website owned by Alibaba. It is the world’s biggest e-commerce website, the 4th most popular app in China, and the seventh most visited website according to Alexa.
  • Acting as an intermediary sales platform between individuals, with millions of Chinese sellers and shops, operating on a consumer-to-consumer (C2C) system.
  • For many, it provides the most convenient online shopping experience covering everything from clothes to fruits and vegetables with an almost instant delivery service.
  • Making tremendous sales volumes on self-created shopping festivals like Double 11: Singles Day, Double 12, 618 (June 18th), and more.
  • Taobao has various sub-divisions: group-buying platform, auction platform, service platform, overseas shopping platform, etc.
  • It is easily one of the best tools available for entering the Chinese market and establishing a foreign brand as a market leader, with easier access to a physical distribution channel and online store.
  • Spontaneous, interactive Live Streaming is the new popular function on Taobao. Hosts broadcast in real-time, videoing themselves modelling clothes or other goods, and viewers can then immediately purchase that item from an embedded link. Taobao Live reached a turnover of 100 billion yuan ($14.93 billion) in 2018, with an annual growth rate of 400% according to China Daily.

JingdongJIngdong-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • It is one of the two massive B2C online retailers in China by transaction volume and revenue, a member of the Fortune Global 500 and a major competitor to the Alibaba-run Tmall.
  • Jingdong started as an online magneto-optical store, but soon diversified, selling electronics, mobile phones, computers, and similar items.
  • It is the world’s leading company in high tech and AI delivery through drones, autonomous technology, and robots, possessing the largest drone delivery system, infrastructure, and capability in the world.
  • It has recently started testing robotic delivery services and building drone delivery airports, as well as operating driverless delivery by unveiling its first autonomous truck.

 PinduoduoPinduoduo-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • The new favoured group shopping platform – Pinduoduo is an e-commerce platform founded in 2015, with it combining group-buying strategy, cheap products, and social media. It is the fastest-growing App in the history of the Chinese Internet.
  • Pinduoduo allows the users to participate in group buying deals by driving enough friends on WeChat or other social media channels to order the items together in bulk, directly from the manufacturer.
  • Pinduoduo users are predominantly female, living in Tier 3+ cities.
  • According to RenMing Wang, the company, which was founded less than three years ago, has reached 300 million users. In 2017, GMV had exceeded 100 billion yuan, and the daily order volume ranked second in mainland China only after Taobao.
4. Information and Review Apps:

No: Yelp, TripAdvisor, Groupon      Yes: Meituan-Dianping, Mafengwo, Xiaohongshu

70% of the Chinese internet users are purchasing products recommended by other social network users.

Meituan meituan

  • Meituan is a group-discount website which sells vouchers from merchants for deals, subject to the minimum number of buyers who demand a discount, from which Meituan generates commissions.
  • It is one of the world’s largest online and on-demand delivery platforms with over 290 million monthly active users and 600 million registered users as of April 2018.
  • It features a Chinese group-buying app for locally found food delivery services, consumer products, and retail services. offering deals of the day by selling vouchers on local services and entertainment.
  • Meituan generates most of its revenue from mobile application services. The company has partnership agreements with over 400,000 Chinese local businesses.
  • The brand’s “super app” is growing increasingly huge, now it includes more than 30 services (for example, restaurant reviews, reservations, movie tickets, home rentals, hotel bookings, payments, travel booking, food delivery, and grocery ordering), although restaurant-related services and travel make up as much as 88% of its revenue.
  • The company’s annual transacting users has grown 26% year-on-year to 412 million.

MafengwoMafengwo-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • The Chinese Tripadvisor – Mafengwo is a social-tourism website, data-driven platform, and new model of tourism e-commerce. It offers all-dimensional tourism information and product reservation services including transportation, hotels, sports, catering, shopping, and leisure, covering over 60,000 destinations around the globe.
  • Hundreds of millions of Chinese travellers’ information helps it update, replenish, and perfect our travel data on the platform. Mafengwo helps 120 million travellers monthly and is considered by many to be the “Travel Bible” of the younger generation.
  • Mafengwo understands the preferences of the younger generation and therefore makes complicated travel decisions, reservations, and experiences more simple, efficient, and handy.
  • Here is the link to the Mafengwo, there must be a post of your city no matter where you are located in the world!

XiaohongshuXiaohongshu-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • Xiao Hong Shu (also called Littel Red Book) is a Chinese social media site that is more of an online community, providing an all-in-one platform with both social media and e-commerce functions for its Chinese users. According to its official website, XiaoHongShu has reached 200 million registered users as of Jan 2019 and 30 million monthly active users.
  • It serves as an effective platform for writing reviews, selling and advertising skincare, cosmetics and fashion products. Users can buy products on the app and enjoy the benefits of cross-border business in China.
  • Apart from creating your own content, users can also “Save” posts, interact with others through “Likes” or “Comments”, or even press “Follow” to subscribe to a particular user/brand that they like.
  • From statistics gathered by iResearch, over 50% of users were under 30 years old, while more than 80% of them are female.
  • It uses a recommendation algorithm to create a customized homepage based on users’ browsing and search history.
  • To maintain high-quality content, XiaoHongShu doesn’t allow self-advertisement or verbal abuse, with a strong emphasis being placed on “authenticity.”
  • Xiaohongshu is mostly used on the mobile app, you can download the IOS or Android version here.

5. Online Payments

No: Cash, Bankcard        Yes: Alipay, Wechat Pay

China is one of the most advanced countries in the world with regard to FinTech, they are actually close to becoming a totally cashless society. Paying via QR code is commonplace in China. Tom Slater, from Scottish Mortgage, predicted that “In 2020 it is forecast that Chinese consumers will transact $45 trillion through mobile payments, by which time the county will be pretty much cashless.”

There are two biggest third-party payment providers-Alipay and Wechat pay. They have actually revolutionized the way of the daily life payment in China by making the selling and buying more transparent and convenient. 

AlipayAlipay-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

  • Alipay is a third-party mobile payment platform founded by The Alibaba Group.
  • Its financial services include money transfers, bill payments, e-commerce etc. What’s more is that Alipay offers its payment method on two of the largest Chinese e-commerce platforms, Taobao and Tmall, which are also owned by Alibaba.
  • Alipay has more than one billion users, 70% of whom use at least three financial services in the app. Their members now come from more than 110 countries and regions around the world, such as the United States, Brazil, Russia etc.
  • The company has developed more than 200,000 mini-programs, including healthcare, investments, invoices, car payments, and insurance.
  • The list of tasks that citizens can complete on their phones includes paying utility bills, virtually queuing up at hospitals, renewing a driver’s license, applying for visas, and many more that can save people the hassle of hopping from one government office to another.
  • Alipay’s parent company, Ant Financial, is a full-scale financial services company, so Alipay has a wide variety of financial services integrated, such as money market investing (Yu’e Bao), insurance services (ZhongAn), credit rating services (Sesame Credit), personal credit lines (Ant Micro Loan), and online banking (MYbank).
  • To accept Alipay for your business or E-commerce, makes both yours and clients life much easier, click here.

WeChat Paywechat pay-A COMPREHENSIVE INTRODUCTION TO THE CHINESE ONLINE MARKET

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About the Author:
Na Cheng is Aryxe’s Strategic Planning Manager, on top of being a creative content writer she possesses high-level knowledge of project management within the Chinese/Asian market. Her expertise includes Chinese business development, social media management, copywriting, and multilingual translations.
Aryxe is a Swiss-German technology company which specializes in providing modular digital solutions for small and medium-sized enterprises. From social media and digital advertising to content production and websites –our highly flexible business modules provide fast and effective support for your company!

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