How New Trends of Data Analytics Transform Chinese Traditional Way of Marketing

Three years ago, when I interned in a brand consulting company in Shanghai, China, companies came to us asking for a “hit”. They want their marketing campaigns big, out of the box, and seen and discussed by as many people as possible. At that time, creative content and marketing was still the main-stream way of winning customers.

Two years ago, before I came to the US, Chinese first bubble tea shop, Sang Tea (yes bubble tea is a quite big business in China) featuring “misfortune” became a big hit – its unusual focus on the negative signals of the brand won the heart of young people; and its unprecedented style became the symbol of fashion. However, after a few months, when people stop talking about this marketing concept anymore, the bubble tea shop were closed accordingly.

In the past decade, as China’s economic growth has begun to slow, the market has become increasingly competitive, and customers are becoming increasingly picky for the products and less loyalty to the brands. All these trends indicate that the businesses can no longer rely on “big hits” to acquire and retain customers. On the other hand, Chinese internet adoption rate has sped up in the past few years. According to a report by McKinsey, Chinese internet’s contribution to the total GDP is expected to increase from 7% to 22%[1]. The digital revolution in China can be a huge opportunity for its businesses to tap into big data analytics to transform its customer acquisition and retention, along with other management functions such as process and inventory management.

As businesses have come to realize that marketing “hits” like Sang Tea can no longer satisfy the young generation nowadays, they start to turn to big data analytics to generate more accurate and targeted branding and marketing. For example, Rupam Borthakur, CEO of consumer insights at Kantar Hong Kong, pointed out that US$335 billion will be spent on digital ads by 2020 – this means consumers are seeing more brand-related content than ever[2].

At the same time, when breaking into the Chinese market, it is also important to understand the huge cultural and customer differences compared to other western countries where big data is relatively maturely adopted. For example, Chinese customers may be more fragmented, or even “dustified” than other societies, as the economic development level in each province, city or even neighborhood varies so wildly, the examination of data need to be in a more micro level to become meaningful. While Chinese businesses’ current attempt still focus on the macro level of customer data, there is still a long way to go till China fully embrace the transformation of data analysis.

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[1] Capturing the Chinese Consumer with Data-Driven Marketing. https://www.marketing-interactive.com/capturing-the-chinese-consumer-with-data-driven-marketing/.

[2] China's Digital Transformation: The Internet's Impact on Productivity and Growth. https://www.mckinsey.com/~/media/McKinsey/Industries/High%20Tech/Our%20Insights/Chinas%20digital%20transformation/MGI%20China%20digital%20Executive%20summary.ashx.