Major Trends of Internet Marketing in Mainland China:

Implications for Hong Kong Businesses

A Presentation Made at HKAIMeCMO Forum

June 2010

Dr. Wenyu Dou, Associate Professor of Marketing

Associate Head, Department of MarketingCity University of Hong Kong

About the Speaker• Dr. Wenyu Dou is considered a

pioneering researcher and leading expert on Internet Marketing. He has published extensively on this topic since 1998 and taught this course many times at Universities in the U.S. and China.

• He is also a frequent speaker on this topic at various industry conventions and top companies in the region (e.g., Ping An, ICBC, ctrip.com)

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Marketing today ISInternet Marketing!

Status of Internet Usage in Mainland China

• Report by CNNIC (Jan. 2010)– 384 million Chinese internet users. – Big jump in usage of social networking

sites. – Huge increase in the number of

internet users that access the internet via mobile devices (about 46% of all net users).

– Value of online shopping transactions doubles!

The Overall Picture is Bright

But there are considerable regional

differences

Profiles of China’s Internet Users

What’s new

• the categories with the highest number of users were online music, online news and search engines.

• Implication:– “due to the low-cost of search engine

marketing, highly targeted customers, and their advantage of bringing easily seen marketing results, they are becoming more-and-more trusted by advertisers.” (comScore)

What’s new• 108 million online shoppers in

China pushed the total value of online shopping transactions in China to 250 billion Yuan (about 36.5 billion USD) – double what it was in 2008!

• Implications:– Hong Kong businesses need to

embrace the e-commerce trends in China (e.g., Taobao Hong Kong street)

What’s new: 176 million users in China’s social networking sites, local players

rule

Ho to Grab China’s Social Shoppers

• Chinese consumers are using multiple sources of online information to learn about products.

• Netpop found that user-generated content, including consumer reviews, forum discussions and blog entries, influence 58% of purchase decisions in China, – compared to 19% in the United

States

Firm Strategies: Monitor or Contain the Negatives

• To keep tabs on consumers' conversations, companies can use software to sift through blogs, BBSs and other social network channels to find out what people are saying about their products.

• Monitor negative word-of-mouth and take measures to prevent public relations crises from breaking out on the Internet. (Starbucks in the Forbidden City)

Firm Strategies: Promote the Positives

• Apple launched a marketing campaign on the popular social networking site for university students called RenRen .

• “Apple College,” a page providing information about its products, tutorials for switching from PCs to Macs and monthly prizes for members.

• RenRen members were also encourage to become “iPod Spotters” and use their iPods to upload photos they take with their iPods to share with an online photo community.

Advices for Hong Kong Businesses

• Change in the mindset of corporate market departments---new forms of social media encourage a two-way dialogue where consumers 'talk back‘ and share their impressions about brands.

• Monitoring consumer conversations is only the beginning, join the conversations

• adapting online strategies to local tastes is critical