I recently caught up with Danyi Yang, Practice Leader for Asia-Pacific at Frontier Strategy Group, a friend of Getting to Global.
I was really excited to hear about her new China digital report, especially since she recently rejoined FSG, after spending the last year at Alibaba Group working directly with their global managing director.
According to Danyi, companies looking to improve sales and marketing efforts in China have turned to digital channels as a wide-reaching and cost-effective way to engage customers. As China’s digital development has become more sophisticated, however, local internet giants (think: Alibaba, Baidu, Tencent) with businesses spanning different industries dominate key sales platforms and social media.
This power imbalance affects companies’ local partnerships, limiting multinational companies’ pricing power and access to customer data on digital platforms. As the Chinese government encourages manufacturing digitalization and indigenous innovation, Danyi expects further internet integration as well as stricter data scrutiny, which adds to retailers’ competition and compliance risks.
With this in mind, Danyi recommends that businesses carefully design a digital plan. A broad digital customer engagement strategy is much more than just ecommerce. To offer a seamless customer experience, take a three-pronged omni-channel approach:
Companies must take into account all three strategic focus areas to develop a successful and differentiated digital strategy to engage customers in the Chinese market.
Danyi spoke to FSG clients about their digital customer engagement in China. They shared two selected tactics to be aware of:
China’s social media landscape has mostly been dominated by homegrown platforms, giving rise to major players like WeChat and Weibo. Multinational companies (MNCs), especially those in B2B sectors, or those with direct key accounts to manage in B2C industries, often store mass sales correspondence on informal social networking tools, making it difficult to incorporate into standardized customer relationship management (CRM) systems.
Many companies have started to work with local partners like Tencent and other third-party service providers to develop mobile platforms to link WeChat with their CRMs, or to design APIs (application programming interfaces) inside their corporate WeChat apps that are compatible with internal CRM systems. An integrated solution that offers an additional customer-friendly interface can help MNCs improve lead generation, enhance the overall customer experience, and optimize sales data analytics.
China has a booming ecommerce ecosystem supported by government policies and local tech companies, creating abundant opportunities for MNCs to capitalize on. But it’s also a vast market with varying levels of economic development and digital readiness, so subnational market prioritization and sales channel optimization are critical.
While companies are actively developing a cost-effective online marketing strategy in China, physical retail stores remain crucial sales channels. The O2O retail experience in China is evolving into a never-ending cycle with a growing number of components to consider. O2O2O will be the ultimate new retail experience, especially in coastal cities with more advanced levels of ecommerce readiness.
Many MNCs are shifting their strategic focus to integrating online and offline channels and creating a closed-circuit customer engagement experience. For instance, it will be increasingly important to leverage data from online behavioral analysis and location-based mapping to drive offline marketing exposure and sales conversion.
China’s digitalization progress has leapfrogged many developed markets. Both B2B and B2C companies have to navigate the ever-changing digital market landscape and design an integrated omni-channel strategy to better engage existing and potential customers.
For more information about Danyi’s new Frontier Strategy Group report: Digital Customer Engagement in China click here.
And check out FSG’s latest report on digital/ecommerce in China. Through the end of August, Getting to Global readers can receive a 40% discount. Enter the coupon code “gettingglobal” at checkout by August 31.
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