2.2.15 The e-commerce connection
E-commerce is thriving in China, with almost one in three internet users buying online each month, according to We Are Social. The country’s consumer e-commerce market was worth $440bn in 2014, accounting for 9.8 per cent of total retail sales in China, according to analysts Forrester Research. They predict the market will grow at a rate of 19.9 per cent per year, reaching $1.1tn by 2019.
“Chinese consumers use the internet to look for products and brands, and as a consequence companies without a strong online presence have less of a chance to be in the Chinese shopper’s mind,” says Verot.
“Companies that want to sell their products in China must embrace e-commerce platforms. Brands have two options: develop their own e-commerce site or open a store in some of the popular Chinese e-commerce platforms.”
China’s main e-commerce sites are:
- Taobao – the biggest C2C (consumer-to-consumer) online marketplace, with more than 7m vendors and 800m products. Taobao is owned by Alibaba. It is similar to Amazon or eBay.
- Tmall – the most popular B2C (business-to-consumer) platform in the Far East and was spun off by Alibaba from Taobao. It enables companies to open their own stores. Tmall is a popular website among Chinese online shoppers seeking quality and authentic products from international brands.
- JD – a B2C retailer in which Tencent has a 15-per-cent stake.
“WeChat’s online-to-offline business model allows consumers to purchase online and offline items,” says Andre. “They can either scan the QR codes of products provided by offline retailers or pay directly on the webpage inside the app.”
He adds: “E-commerce platforms are really important in China and used by the majority of the population. However, to succeed with your merchandise you need social to make a bridge between brand and product.”
Brands should develop their digital ecosystem then use this as a base to promote their e- commerce store. The majority of social media users buy online more than three times every month. About 82 per cent of Sina Weibo users made online purchases in Q3 2014.
According to Mailman, football clubs have been cautious in developing official online stores due to the huge grey retail market in China, in which goods are traded through distribution channels which are legal but are unauthorized, or unintended by the original manufacturer. However, the company reports an increasing demand among Chinese football fans to buy authentic products direct from clubs.
“Ten years ago you would see all kinds of fake jerseys on the street here but the increased purchasing power of Chinese football fans, and the ease with which it is now possible to buy online, has made a huge market for authentic merchandise,” says Yan.
It is early days in Chinese e-commerce for Western sports properties. Just a few football teams, for example, have official stores on Tmall, including English clubs Arsenal, Liverpool and Tottenham, as well as Bayern Munich and Real Madrid. NFL China opened a Tmall store in 2013.
Nine football clubs in Mailman’s Red Card report manage their e-commerce presence in China via third party agencies. “These alternatives to Tmall allow clubs to localise the language and accept Chinese payment methods, however they do not solve the problems of high postage costs and slower delivery speeds,” says Mailman.
In the first week of the 2014-15 football season, Real Madrid was the most searched for club on Tmall, with almost 1,000 purchases made in seven days.
“The overwhelming advantages of using Tmall include reduced delivery fees, Chinese consumers’ familiarity with the platform, and fast delivery speeds,” says Mailman. “Clubs also benefit from Tmall’s powerful promotional resources leading to major brand awareness and a huge volume of referral traffic.”
However, brands cannot expect the fans to just buy merchandise given the large grey market in China. Instead they need to think of ways to attract fans to official stores and encourage them to make a purchase.
The approach to pushing merchandise on social media will differ according to the brand. For sports fashion brands such as Nike and adidas, community-building content works best says Score founder John Yan. “Nike decided to elevate the status of basketball in China, so went all out and built an online social community and encouraged people to organise games, leagues and competitions. This helped ignite the whole basketball movement in the country but a major by-product was an uplift in Nike sales. For these brands, offline communities are important.”
For football brands wanting to push apparel, the sales pitch should be soft peddled. “The marketing should be more about inspiring fans to love the team even more, the theory being that if there is continued passion for a team that will naturally trend into merchandise,” says Yan. “It’s rarely wise to push promotions. Instead you feed them an exclusive and constant stream of content, run fan competitions and let them win prizes. The move to merchandise will follow.”
2.2.16 Get a local partner
The complexities of dealing with China’s evolving digital media scene will require someone on the ground running your social media presence and generating content ideas.
“Translating European strategies into China is a mistake,” says Daxue Consulting’s Thibaud Andre. “Get a local partner to create an account and charge them with creating a continual content presence.”
A local partner will manage your social media campaigns by adapting global content feeds, creating organic content and ensuring messages are spread through the most influential channels, online blogs and fan forums.
One size does not fit all when it comes to China, stresses Pete Lin of We Are Social: “Marketers would do well to engage the expertise of a partner who understands the ‘how’ as well as the ‘what’.”
Beyond working with a local partner, many brands establish a local office to oversee marketing and localised content. Brands that have done this include some of the most successful in the market: Manchester City, Manchester United, Arsenal and the NFL.
2.2.17 Multiple account strategy
There is no point being on just one social media network in China, at least not for long. “Your brand is such a long way geographically from the fans in China you have to find a way to be visible – and that means on multiple platforms,” says Andre.
Strategies vary. A brand needs to develop an extensive presence across the key digital platforms – Sina Weibo, WeChat, Youku, own website and e-commerce.
“It’s unlikely that a brand would ever go exclusively on one of these – the potential on the others is too great to ignore,” says Elsden. “The key is to maintain strong relationships with as much of the major media as possible. Brands can provide great video content to Youku, while partnering with a major network for their website, as well as launching a platform on WeChat and Weibo.”
2.2.18 Linking with digital media
There are a number of online sports platforms in China that have struck deals with international sports properties for rights for live streamed or on-demand video. Among them are Sina Sports, PPTV and LeTV.
Sina Sports, part of the Sina internet empire and closely allied with Sina Weibo, claims over 40m users on its sports news and information platform. Among other properties, it has live streaming rights for English Premier League football in the 2015-16 season. The agreement will see Sina Sports live stream 260 of the total 380 games for free.
“We think brands which are active on both news platforms and on social media have greater impact and reach than either on their own,” says Sam Li, general counsel at Sina Sports. “If you only have social media you are missing out on a large part of the media in China and if you only have a digital media presence then you are missing out on quite a big part of everyday life.”
Li heads up international development and is responsible for building partnerships with major sports leagues, clubs and personalities. He says the Sina Sports team works closely with Weibo to promote key accounts.
“When a player uses Weibo to make an announcement we can immediately link to that post with an article on our news website,” says Li. “We are trying to become partners with brands, teams and individuals to really push them not only on social but on the news platform. If someone creates a new Weibo account we want to cooperate with them and help push their news on Sina Sports. It is a symbiotic relationship.”
Sina Sports recently signed former England football international Michael Owen and Italian football coach Carlo Ancelotti as pundits. “The aim is to provide our audience with more insightful coverage of European football events,” says Li. “Fans are encouraged to ask them questions on Weibo and Michael or Carlo will respond on air. The fan gets their name read out and feels close to the celebrity.”
The two-year deal with Owen will involve him commentating on Premier League, Uefa Champions League and 2016 Uefa European Championship matches. Owen will also write his own column, join a monthly online Q&A, and present souvenirs bearing his autograph to fans.
It’s an initiative that Li feels could be rolled out to a wider number of sports clients. He emphasises that, for media, content is as important as broadcasting rights and that Sina Sports will bring more celebrities from sport and the entertainment industry to support coverage and promote events.
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