To Gain Success in China: Market Opportunities & How to Get Started

Most provident marketers have sensed a great opportunity in China. The vastly increasing middle-class population have boosted the need for higher quality goods and services. The market size of China’s middle class is too big to be neglected. In 2015, the middle-class households (earning more than $15,600 p.a.) in China amounted to around 298 million. In comparison to the world’s largest consumer market, the total households in the US amount to 124.6 million. (Statista, 2015)

With more disposable income, Chinese consumers are more willing to pay additional prices for premium products and services. This has been an incredible opportunity for overseas consumer-goods firms. By the end of 2015, individual overseas transactions have reached ￥240B (~$40B), with more than 60% year-over-year increase. More than 24 million Chinese consumers have made purchases from overseas websites at least once in 2015. Besides, more and more members of the Chinese population are travelling to foreign countries, which provides growth potentials for tourist businesses around the world. More than 80 million Chinese travelers traveled abroad in 2015 and spent￥12K (~$2K) per trip. (Analysys.cn, 2015)

It is the perfect time to enter the Chinese market, not only because of the increasing demand from Chinese consumers but also because it has never been easier to reach the mass majority of the targeted customers with the help of online advertising. More than 52.2% of the population, which is around 700 million, are internet users who can be reached through online advertising. (Internet live stats, 2016) Digital advertising is becoming increasingly effective since Chinese adults will spend more time on digital platforms (50.6% of their total time spent on media) than on traditional media for the first time in 2016. (eMarketer, 2016) The process of conducting online advertising in China is also much simpler. Overseas companies no longer need to physically enter China in order to be eligible to advertise.

However, a lot of firms have failed due to their unfamiliarity with the unique digital landscape in China. What’s even worse is that many companies have never been able to get started because of the complicated process and the language barrier.

There are two frequently asked questions from overseas marketers. First, how to get started? And thereafter, how to gain success in China?

Referring to the concept in product development called minimum viable product (MVP), it is suggested that only the most important features be provided so that the company can control the monetary and time costs as well as reduce the involved risks to the lowest level. Similarly, when advertising in a new market, advertisers are recommended to adopt the channel that is most widely used and is most effective in order to quickly test the market with minimum costs and optimum effects.

Search ads is an ideal solution. More than 593 million people in China are search engine users, which take up the majority (83.5%) of the total number of internet users in China. (CNNIC, 2016) Besides personal searches, search engines are also widely used to assist in making business decisions.

Google might be the most popular search engine in most countries. However, in China, the landscape is completely different. In 2010, Google has left mainland China due to government censorship, and its market share has shrunk to 0.34%. The biggest three players in China are Baidu (54.3%), Qihoo 360 (29.2%), and Sougou (14.7%).

In the end

The rising of the middle class in China provides a window period in which to boost revenue growth for companies all over the world. Marketers need to take actions immediately in order to avoid missing the bonus offerings of this era. The easiest and most effective way to get started is to leverage the broad coverage of China’s biggest search engine, Baidu.

However, in order to achieve sustainable business success in China, overseas marketers should take into account the uniqueness of this market. Actively getting to learn the language, getting familiarized with the habits of Chinese customers, and getting more information about Baidu search engine marketing will add more possibilities for attaining success.