Resources in China have been developing for quite a while. Today, the country is able to fully support performance marketing. Moreover, selling to Chinese consumers is becoming increasingly profitable and, therefore, China has more demand for skilled digital marketers and profitable performance marketing campaigns.
China Market Overview
China experienced rapid economic and social development that led to the country becoming the second-largest economy worldwide. While regularly contributing to global growth, the rise of the Chinese economy brought along multiple challenges, such as environmental issues, social inequality, and other imbalances.
In its recent five year plan, China stressed the importance of information technology development and the determination to act accordingly. Therefore, significant efforts had been put into the development of related industries. In 2018, there were around 804.5 million internet users in China, with 54% of the population using their mobile devices to access the internet. As a result, constant internet access and the rise of e-commerce made it crucial for Chinese brands to improve their digital marketing strategies.
Today, consumers across the world, and especially in China, embrace the products and services developed with the help of new technologies. Therefore, the amount of apps downloaded by the individual consumer in China grows regularly. As an all-in-one app, WeChat had around 1.13 billion monthly active users in the second quarter of 2019. WeChat makes a solid case for the most popular app within mainland China.
According to the fact that the population of China is becoming more diverse, and disposable income is rising, the shopping ability of Chinese consumers grows daily. This fact indicates the rapid growth of the middle class in China. Therefore, the main customer segments for Chinese brands are the middle class and the youngsters living in the top tier Chinese cities.
The digital landscape of China differs markedly from the US or Europe. Therefore, foreign internet marketers should keep in mind that it formed under a different set of conditions. When launching campaigns in China, the digital strategy should be in line with certain local features and restrictions.
First and foremost, local platforms dominate the market. The growth of domestic products, platforms, and services has always been a priority for the Chinese government. The majority of platforms familiar to Western marketers like Facebook, Google, YouTube, and Instagram are blocked in China. However, it is still possible to connect with local Google or Facebook resellers and get their traffic. Moreover, the resellers can open the accounts and help with promotion in China. In fact, there is an immense number of resellers in China helping to cooperate not only with Western but also with local platforms.
Main Traffic Sources
Around 85% of total traffic in China belongs to Baidu, Alibaba, and Tencent. According to the fact that there was no actual competition from the Western platforms, the local social networks, messaging apps, and search engines dominated the Chinese market.
Baidu is focused mostly on search and display. It is no secret that the interface of Baidu is in Chinese, and it works better on Windows OS. If you are operating outside of China, working with resellers might be a better option. In fact, there are around 300 Baidu resellers in China operating in different verticals. Therefore, having a dedicated team to manage the campaigns will make it easier to scale.
Alibaba Group is focused on e-commerce, but the company does not sell traffic. Instead, Alibaba uses its traffic to sell the products online to local and foreign customers. AliExpress, for instance, has a partner program that provides multiple opportunities for local and Western marketers to earn big.
Tencent is a gaming company, and it also owns WeChat, QQ, and Qzone. To gain WeChat traffic, your company should be officially registered in China. Otherwise, the ad spending will grow beyond expectations. Alternatively, it is possible to work with official resellers and gain WeChat traffic with their help. When it comes to direct cooperation, one of the ways to advertise on WeChat is using standard banner ads. The other option is to cooperate with KOLs. In China and most of the Asian countries, it is impossible to connect with KOLs directly. Key opinions leaders usually connect with the brands through the agency, operating as an intermediary.
Besides the big three, China also has more than 300 DSPs, and around 50% of them have their data management platforms. In fact, the local DSPs can be useful if you are interested in buying video traffic from Youku, which is dominating the video market in China.
Offers That Work in China
Even though the top vertical is e-commerce, utilities are still in the top list of offers in China. Qihoo 360 is one of the most well-known Chinese advertisers that actually started the utility trend. 360 Security and Opera Browser, for instance, are in the top utility offers list in China.
Chinese utility offers are primarily targeted at users in the US and Europe. Therefore, these offers can be run either with the help of affiliate networks or directly, in case there is regular communication with the advertiser.
As for local e-commerce offers, one of the top offers is known as Little Red Book, or XiaoHongShu (小红书). Running this offer might not seem profitable enough at first. However, the advertiser has an unlimited budget, and there is a real opportunity to scale. The only requirement is high-quality traffic.
E-commerce offers in China are primarily oriented on local users. Therefore, it is pointless to run these types of offers with no previous experience in this region.
The gaming vertical continues to grow worldwide and in China in particular. Therefore, such offers as the well-known Clash of Kings or PUBG mobile will prove profitable no matter the location of the users. Moreover, the news aggregation apps, like TopBuzz, are at the peak of popularity and performance in China.
If you want to successfully enter the fast-growing market of China, remember about local trends, cultural and linguistic differences, and the need to localize content and creatives.
Affiliate marketing is rapidly evolving in China and allowing new players to enter the market. To gain a competitive edge and succeed, it is crucial to understand the needs of local customers and adjust to the digital culture of China.