Integrated CRM systems are an essential component for companies looking to win loyalty from Chinese consumers
The Chinese market is characterised by tech-savvy consumers, brand-focused advertising and homegrown giants that dominate the media landscape. While it is convenient to find the Chinese ‘equivalents’ to familiar platforms, glossing over their differences is an obstacle to understanding how to maximise your ROI with their use. WeChat is not the same as WhatsApp: the smart strategy is to figure out their features in order to benefit from their full potential.
Chinese channels act differently to European counterparts, and they look different too. For instance, Chinese websites are typically more crowded with more links on the landing page. This is because the complexity of the language makes effective searching difficult, and domestic search engines generally favour quantity of links over quality. Understanding the characteristics that make the Chinese market unique is imperative to executing an effective digital strategy.
China’s Middle Class as Percent of Urban Households
Source: Mckinsey & Company
Uper Middle: $16,000 – $34,000
Mass Middle: $9,000 – $16,000
Demographic changes are also dictating trends. By 2022, over 75% of China’s urban population will be considered middle class, compared to 4% in 2000. This means that price is no longer the primary factor in the decision-making process. Strategies that have reaped previous success for businesses must be adapted to the growing size and diversity of China’s middle class, who have more distinguished shopping preferences, are more willing to purchase specialised items (from laundry softener to personal gadgetry) and have increasingly developed idiosyncratic behaviours.
Companies looking to market in China therefore need to:
- Develop a detailed understanding of the consumer lifecycle and the different factors affecting each of the stages (discovery, purchase, post-sales care, repeat purchase)
- Refine their strategies so that their products and services respond to consumers’ needs and preferences and so that their marketing strategies are specific to each customer segment
86% of consumers are willing to pay more for a better customer experience. Companies with integrated CRM systems that are connected with domestic platforms will be in a better position to optimise data analytics, improving engagement through personalised journeys.
Understanding the Chinese Consumer Journey
The characteristics of domestic players have given rise to a truly seamless consumer journey. The process of discovery, deliberation, and process is facilitated by integrated digital platforms which fuel content-led research. Chinese channels systematically include embedded purchase links, allowing consumers to immediately purchase what they see. The extent of this content-led purchasing process is far more developed than applications familiar to Europe, although add-ons which allow purchase links are on the rise, such as Liketoknowit for Instagram. Xiaohonghsu, which is comparable to Pinterest, is an e-commerce website that enables on-the-spot purchases without ever having to exit the application. Xiaohonghsu started as a platform for reviewing products available overseas, has 15 million downloads, with five million monthly users. The success of the application is fuelled by its suitability to sophisticated Chinese consumers, who rely largely on peer reviews when deliberating a purchase and who prefer a one-stop shop where discovery and purchasing are integrated.
The app also enshrines the role of Key Opinion Leaders (KOLs), another defining characteristic of the Chinese market. Similar to online influencers, KOLs can be dramatically more effective than mainstream advertising. For example, Xiaohonghsu has over 200,000 bloggers that regularly post products and reviews for the benefit of app users. Using KOLs is a powerful digital marketing technique in China, where bloggers sell 100 cars within four minutes of a campaign going live or interact with followers to design 200 custom-piece bags that sell for almost RMB 3.5 million (almost EUR 500,000).
An Integrated CRM System
A central theme to these success stories is a customer-centric digital strategy. Data-led understanding of Chinese consumers and their expectations is key to developing consumer personas and adapting journeys to their preferred lifecycle model.
The market is still playing catch-up in their efforts to cater to consumer preferences when developing journeys and following shifts in consumer behaviour: 75% of Chinese customers are not satisfied with their customer experience when interacting with a company across multiple channels.
Businesses often have unused data fragmented across a variety of tools. Even when companies do have CRM systems in place, these can fail to reach their full ROI potential due to absence of a holistic approach, inadequate training, or a belief that a CRM system starts and stops with the sales department.
A single system of engagement can enable companies to better manage customer relationships across different departments and capture data from every customer and prospect interaction across all touch points and mediums. Consolidated, usable data is even more important for SMEs operating on the China market, which is characterised by reluctant data sharing. Valuable consumer insights that drive ROI are the ones that are aggregated, consolidated, and used.
An integrated CRM can go far in providing objective criteria for you to fine-tune customer journeys and ensure consistent experiences across multiple channels, fostering loyalty in the rising sophisticated consumer segment.
About the Author
Manuela leads the Marketing division at IMS, advising clients on branding and market positioning in both Europe and Asia.
Prior to joining IMS, Manuela worked in financial regulation and compliance. Past experiences include representing France in roundtable discussions in Brussels for the European Venture Capital Fund (EuVECA) Regulation.
She obtained her LL.B (Hons) at UCL before graduating from Sciences-Po, Paris, with a Master’s in Financial Regulation.
Connect with Manuela Burki on LinkedIn