Tag Archives: marketing

History Lays Landmines For Marketers

TO PARAPHRASE EDMUND BURKE, the Anglo-Irish political philosopher, those who don’t know history are doomed to be fined for it.

Chinese authorities have fined Sony’s Chinese subsidiary 1 million yuan ($155,000) for announcing a product launch event for a new camera, the A7, that was to have been held on the opening day of a trade fair in Shanghai on July 7, Japan’s Nikkei reports.

The date marks the anniversary of the Marco Polo Bridge Incident in 1937, generally considered to be the start of the Second Sino-Japanese War.

There was an immediate backlash in China when the date was first announced. The new camera’s reported marketing tagline ‘Capture More of Your World’ probably did not help. Sony apologised suitably profusely and cancelled its event.

Nonetheless, authorities have gone ahead with imposing the fine, the maximum allowed, citing violations of China’s advertising laws that forbid online advertisements from hurting the dignity or interests of the state. Authorities found that Sony had hurt the dignity of the nation.

Authorities also said they fined the Chinese unit of South Korea’s Samsung Electronics 400,000 yuan because its advertisements for two smartphone models violated laws forbidding the disrupting of social order and spurring disobedience.

Last year, the Japanese gaming giant Capcom found itself caught up in a PR whirlwind in China after using ‘918’ as the passcode for the launch of Resident Evil 3. Patriotic social media users took this as a reference to the Mukden Incident on September 18, 1931, which Imperial Japan staged and then used as a pretext for its invasion of China.

Just the previous month, Tencent had removed a popular Japanese anime and manga, My Hero Academia, from its streaming services following Chinese claims that a newly introduced character was a reference to Unit 731, the Japanese military’s biowarfare research unit during the Second World War, responsible for hundred’s of thousands of deaths.

The only safe dates for Japanese product launches in China might be August 15, the anniversary of Emperor Hirohito announcing Japan’s surrender to end the Second World War or September 2, the date of the surrender ceremony and the formal end of the Second Sino-Japanese War.

Leave a comment

Filed under China-Japan, Media

Luxury Spreading Far and Wide

Chinese already spend one of every eight dollars spent on luxury goods worldwide–as the proliferation of international luxury brand retailers from Armani to Louis Vuitton operating in the country and their growing dependence on its business already bear tony testimony. By 2015, Chinese consumers will be spending at least one dollar in every five, according to newly published research by McKinsey, the international management consultancy. That adds up to sales of luxury watches, jewelry, handbags, shoes, and clothing of the order of 180 billion yuan ($27.5 billion), up from 80 billion last year.

Good news for the international luxury brands that Chinese consumers prefer? Up to a point. This broadening of their customers will move them out of their traditional niche of selling to the very rich. McKinsey reckons that there are 13 million Chinese households with incomes of 100,000-200,000 yuan ($15,000-30,000)–upper middle class in China and on the first rung of the ladder of luxury consumption–and that this number will increase nearly sixfold to 76 million by 2015. Their share of the Chinese luxury goods market is forecast to grow from 12% last year to 22% by 2015, making it the fast growing sector of the market.

Addressing their needs requires a different marketing approach to the high-touch, for which read expensive, way luxury-goods makers are used to dealing with their best-heeled customers. That implies better in-store services and digital experiences for their customers, and the development of products and services designed for the local market (as Hermes is doing with its Shang Xia brand), three factors that have not always been the strong suit of luxury companies, especially their online strategies; the broad spread of social media is a particular challenge to the exclusiveness of a luxury brand. The luxury companies’ market will also spread from the the first tier cities to the second and third, compounding the reach and brand dilution issues, though it will also remain concentrated in the main cities.

Luxury-goods manufactures will also find that growing familiarity with luxury goods will make Chinese consumers more value conscious. Brand retailers won’t be able to get away so easily with just slapping a high price on their goods. Luxury goods prices in China are about 20% higher than even in Hong Kong. On the flip side, the research shows that as consumers get more brand conscious, they value craftsmanship and quality more, and are becoming more aware, and rejecting of, counterfeits.

McKinsey also predicts that spending on luxury services, such as spas and other wellness activities, will grow faster than that on luxury goods, another shifting sand for luxury retailers. The elephant in the room, though, is whether China will generate its own luxury brands as the once similarly foreign-brand besotted Japan has done.

Leave a comment

Filed under Industry, Politics & Society

BBS Is At The Heart Of China’s Internet

Chinese don’t use the Internet the same way as Americans. They are technologically a step into the future in one respect, mobile services like gaming and IM via QQ, and a throwback in another, bulletin board systems (BBS) are at the heart of most websites.

Tom Melcher’s Live from Beijing blog explores the later.

I can’t overstate the importance of a website’s BBS to Chinese Internet users. Time and again, through informal conversations and more formal online polling, I have confirmed that an active, well moderated BBS is far more valuable than professionally-developed content. In every subject area imaginable, from the latest news, to having a baby, to decorating a house, to raising your children, the advice and comments of presumably-ordinary people literally power the traffic and interaction within the Chinese internet. Every major successful Chinese B2C website I know began as a BBS.

Paul Denlinger, takes up the baton on The China Vortex. exploring the marketing and advertising implications for foreign companies.

Most westerners who come into the China Internet market have no idea of its power and influence, and instead think that the Chinese Internet is largely the same as the US market, but it isn’t. The Chinese government doesn’t really like BBSes because it really is free (as in free speech), and is the breeding ground for all kinds of weird stuff. And while it is important for gathering buzz on products (as CIC, based in Shanghai, does) for corporations, nobody has really been able to monetize it.

Bottom line: social media in China are alive, well and 10 years old. And like many 10 year olds, often overlooked, misunderstood and off in their own world, where they can make mischief for all the adults.

Leave a comment

Filed under Media, Politics & Society