Censorship Does Not Stop Chinese Bloggers From Advocating Change

Say the words China and Internet in the same breath and someone will undoubtedly think censorship. It gets attention from websites ranging from broadcast news to international human rights organizations and even online encyclopedias. The censorship, which the government positively refers to as the “Golden Shield Project,” to protect its citizens from online dangers, is more commonly referred to as the “Great Firewall of China.”

Despite the catchy nickname, the issue of censorship is a very serious concern among bloggers and other frequent users of the Internet. With some creativity, netizens have learned that it is possible to bypass the government’s firewall, as evidenced from an interview with writer James Fallows in Atlantic Monthly, but the government’s plans to install web filtering software on computers sold in China has caused a grassroots online uproar.

T-shirt design by http://www.raywow.com

The Green Dam Youth Escort software has been given a rousing thumbs down by more than 32,000 people who voluntarily answered an online survey. In addition, IT software engineers gave the software a test run and quickly learned that it was antiquated and had too many vulnerabilities, which could make computers more vulnerable.

When the government finally decided to delay the July 1 rollout of the software, around 200 people celebrated in the streets of Beijing wearing anti-Green Dam t-shirts. Despite the excitement, everyone realized that the software could still be installed:

” ‘It has not been canceled, just put back, so it’s possible that after a certain amount of time it will be pushed back out,’ said Liu Xiaoyuan, who wants the government to explain why a software ostensibly designed to protect a minority of users — children and teen-agers — must be installed on all computers.”

Created by Gaurav Mishra with Universal McCann data

Despite concerns about the government’s censorship, blogging has given Chinese citizens a newfound freedom to speak out. More than 60 percent of active Internet users in China have started their own blog, according to the Power of the People Social Media Tracker by Universal McCann and interpreted in the graphic above by  Gaurav Mishra. This means that Chinese netizens blog more than other BRIC citizens and Chinese netizens read blogs more than than BRIC citizens. Their blog reading outweighs any other social media use, except for watching videos online.

With blogs having such an importance among China’s Internet users, companies in China must pay attention to blog chatter and take it seriously. Recently, Apple computer is facing a public relations crisis in both the mainstream media and the blogosphere because of the suicide of an employee at Foxconn, a major China-based supplier for Apple. According to news reports, Sun Danyong jumped to his death from a high-rise. Blogger Jim Dalrymple reported on CNET that:

“Danyong was responsible for shipping iPhone prototypes to Apple. Danyong reported the missing device to Foxconn after realizing that one of the 16 iPhones he received was no longer in his possession.”

Despite the buzz online about Apple, the company does not have a statement anywhere on its website. Another issue is that China’s citizens are once again connecting Apple with Foxconn, the same supplier that got into hot water with bloggers in 2006 after it sued a journalist and editor at China Business News for reporting supposed poor conditions at a company plant. Foxconn’s answer to the recent blogger backlash related to the suicide was to to suspend a company employee, despite that employee’s assertion that he didn’t do anything wrong and that he, in fact, was now experiencing harassment by bloggers who released his name and address online.

Whether or not the employee or Foxconn were to blame for Danyong’s suicide, the abundance of blog posts point to the need for Foxconn and Apple to make some necessary changes in China and in their crisis communication methods. The news of the suicide has now reached across the ocean to mainstream U.S. news sites, including the New York Times and the Wall Street Journal, and to U.S. bloggers.

I suggest that Apple make the following changes:

1. Speak Up. Story after story accuses Apple of creating a culture of secrecy with its products, implying that the company’s actions may have contributed to Foxconn’s problems and the suicide. By not answering, Apple is letting readers fill-in-the-blanks. It is time for the company to speak for itself.
2. Talk to the Local Media. Apple should not ignore the power of the Chinese media and bloggers. Giving an interview or statement to a U.S. newspaper or blog demonstrates to the Chinese that Apple’s investment in their country is only surface-deep.
3. Diversify. Despite the fact that a majority of Apple’s suppliers are based in China, Apple’s executive team is predominantly white men. Suppliers may feel that Apple does not understand them or their unique issues in China. With a company based in California, the suppliers may not feel a connection to Apple or the company’s philosophy. With such a disconnect, why should suppliers and their employees follow the Apple Supplier Code of Conduct?
4. Look Around. This is the second major PR crisis for Apple and Foxconn within three years. Apple may need to consider looking elsewhere for a supplier, possibly a company that would draw less attention and controversy. If after two crises Apple does not penalize the supplier for failing to follow the Code of Conduct, a supplier will not change.
5. Invest in Frequency. There were some blatant violations of the Apple Supplier Code of Conduct in the company’s most recent report online. It would be worthwhile for the company to invest in more frequent audits of suppliers who have violated the code. One audit of each supplier once a year would be best to ensure that suppliers do not relax in their adherence to the code.
6. Act instantly. Apple needs to quit waiting for the blogosphere to bring complaints to attention. It needs to be in frequent contact with suppliers to know when there are potential crises. And when a problem occurs, Apple must act quickly, getting out to the forefront on any problems. A slow response implies that the company does not care or that the problem is not a priority.

   My final three steps for change are the ideas of blogger Richard Brubaker, founder and managing director of China Strategic Development Partners. Among his ideas on his All Roads Lead to China blog:

7. Contact Nike. Brubaker recommends that Apple turn to Nike to learn lessons from Nike’s own problems and successes.
8. Get Boots on the Ground. Unlike my suggestion to invest in doing audits more frequently, Brubaker advocates for inspections “NOW.”

9. Invite in third parties. With continued problems with suppliers like Foxconn, Brubaker believes that no one will believe Apple’s reporting and should instead turn to a third party for assistance in auditing the suppliers.

Social Networking Gone Niche

According to Gaurav Mishra, CEO of social media research and strategy company 20:20 Web Tech, out of the next billion Internet users (and the next billion mobile users), a substantial number will come from emerging economies like China. To understand the future of new media in China, it’s important to understand how new media is currently being used in China. Of China’s more than 120 million Internet users, 43 percent are using online message boards, 76 million are using online video sharing sites and 24 percent are using blogs.

Sam Flemming, CIC CEO

‘Social media is alive and well in China,” says CIC CEO Sam Flemming. CIC is the leading Internet word-of-mouth consulting firm in China. Because China is a culture where listening, community building, loyalty, trust and high-expectations are encouraged, a company trying to market its brand or product in China must first do so by identifying and targeting niche social networking and media communities that are in or related to its market. Chinese flock toward those who they trust and who share common interests. Once a company has successfully captured the trust and respect of that target audience, word-of-mouth should fan the flames of the initial buzz and spread conversation to more populous sites.

According to Traffickd:

Most social media marketers tend to focus on the largest, most popular sites, like Digg and Facebook. These sites are appealing because of the huge traffic potential that they present. These sites have more users than smaller, niche social media sites, so they receive most of the attention. Although niche sites may not be able to offer the same traffic potential (in terms of numbers) as the major players, they should not be ignored by marketers. Because exclusivity and word-of mouth from trustworthy sources are inherent in China’s culture, the smaller number of users means that it will be easier for marketers to achieve success and popularity with core audiences who are more likely to spread the word and be repeat consumers.

Heard of Neocha? It’s China’s own version of MySpace that specifically targets people who are interested in creativity, from art to fashion and music. Many companies have partnered with Neocha to hold offline events aimed at marketing its brand or product to creative minds who flock to Neocha’s site.

Helpful Hints in Implementing Niche Social Network Marketing:

Look for relationships with other social media sites: Use niche sites as a backdoor to your site.

Use a few different sites if possible: Spread the word to expand your social media marketing “broadband network”

Get involved and know the users: Know the desires of your consumers and deliver!

Try to get in early: If you see a Niche site that appears to have a growth potential, jump on it now.

Gaurav Mishra

“Internet users in China have large social circles both online and offline and are heavy users of social media, possibly because of a strong early adopter bias,” says Mishra.

Promote the content of others in your niche: Helping others find content is effective for growing with a social network.

Remember, the Chinese value quality, high-end and exclusivity. Niche social networking holds value by being functional, while also being extremely relevant and exclusive. While some may argue targeting a less trafficked site is risky because of the smaller group size, I believe that it is more benificial because the value lies in the quality, and not the quantity.

Reaching Chinese Audiences Through Social Media

Despite reports of the various problems in China, the country’s economy continues to grow, serving as an enticing target to local and foreign entities wanting to expand there.

Skyline of Shanghai, China's largest city and mainland China's business center.

The country is positioned to surpass Japan as the world’s second largest economy (after the recession-stricken U.S. economy) at the end of this year, according to Tom Rauch of the Associated Press.

Although the use of the Internet and various forms of social media are heavily censored and monitored, Internet and mobile phone use in China is on the rise. This provides organizations willing to make some investment in social media as part of their strategy with plenty of opportunity to make inroads into the Chinese market.

Much like in the U.S. market, being informed, being authentic and engaging in conversation would serve a company well. But to successfully carry out a social media campaign in China, companies should also recognize the differences in the Chinese market, and tailor their strategies and choices of social media tools to the conditions of that market.

In a recent article, Forbes stated that Chinese Internet users, also known as netizens, spend nearly two billion hours online each week, compared to 129 million hours per week for users in the United States. These numbers reflect only a limited portion of the population, not a majority, so the growth could be significantly higher in years to come.

The 298 million people online only account for 23 percent of the Chinese population and may not offer the greatest reach cities beyond a certain tier, according to Sam Flemming, CEO and co-founder of CIC, a leading Internet Word of Mouth (IWOM) Research and Consulting firm in China.

Despite the small percentage, for those on the web, it is indeed a primary media, according to Flemming.

“Numerous studies have suggested that Chinese netizens spend upwards of twice the amount of time online as they do watching TV,” Flemming wrote. “Compared to traditional media, digital is so much more varied, exciting and open. It serves the primary platform for consumers to find information, be entertained and socialize: 81.5% of netizens get their news online and … QQ, China’s leading social internet platform, is bigger than Facebook.”

Social networking site QQ claims to have had more than 200 million monthly active users in January 2009.

Flemming added that China has the most mobile phones in the world, and more people there access the Internet via mobile phone than other methods (they often access a site trough their phones before accessing via computer). According to Forbes, 400 million use cell phones in China, with over 6.1 million mobile users connecting online.

[The Forbes numbers are attributed to Dr. Charles Zhang, chairman and CEO of Beijing-based Sohu.com, an Internet company. The numbers are higher than those reported by other organizations, such as the China Internet Network Information Center (CNNIC). According to Forbes, Zhang’s internal research revealed that Chinese Internet users numbered over 150 million (possibly up to 200 million) and that Sohu.com was in the top five most trafficked sites in the world. Zhang attributed the discrepancy and “lower-than-accurate” CNNIC numbers to the organization’s polling methodology (calling land lines).
“Young people do not use fixed line phones. They all have mobile phones,” Zhang said.]

Blogger Enid Burns quoted Netpop Research President John Crandall’s suggestion that businesses create unique experiences tailored to both the Web and mobile Web.

“It’s more important to do so now more than ever, and provide them [mobile users] with that experience that is tailored to that device, because it might be their first experience to the brand,” Crandall said. “Then bring them back to the PC, through the consistent login experience, a consistent branding experience, offering more marketing abilities through the computer, because the computer may offer more marketing real estate than the mobile device.”
Although the Chinese are using applications like Facebook and Twitter, and their equivalent or similar Chinese counterparts, Bulletin Board Systems (BBSes) seem to be the most widely used form of social media. In 2008, there were over 3 billion registered BBS users in China. (A user may register on multiple forums.)

Although the relatively low Internet penetration rate, Flemming said, social participation is very high, with “more bloggers (162 million) and more places online to be social than any other market in the world.”

According to recent statistics on Internet use published by Shanghaiist, blogging is about five times more popular in China than in the U.S. Their report also states that the typical Chinese Internet user is likely to simultaneously listen to music online and use an instant messaging service.

Flemming had some recommendations to connect with the online community in China. Loosely paraphrased and augmented, they include the following:

Find out who’s talking and what they are talking about. Flemming wrote that to build connections, communicators must conduct a “community audit”, similar to a media audit. The community audit involves a systematic mapping out of key blogs, BBS forums, QQ groups and other community channels for the brand and its industry. As a result of conducting this audit, businesses gain insight into the communities and their culture, Flemming stated—including conversation topics, which topics are the most sticky or talked about, how topics are handled and how different groups (e.g., teenagers) are discussing them.

Contribute value to the community. By gaining insight into the various communities, marketers can identify opportunities to reach out and connect with the communities on another level. Flemming mentioned sponsorship of “fubai” or offline meet-ups by companies like Crocs as one example.

Connect with “efluencers”. Just like a business person maintains mutually beneficial relationships with traditional business contacts, marketers must also remember to maintain similar relationships with “effluencers”, or influencers.

Find your voice and use it. Engage consumers by listening and communicating with them online, not just in times of crisis, but also as a regular activity, such as providing advice on a specific topic or recommendations on the use of the company’s products. In discussing the challenge faced by computer manufacturers like Dell and Lenovo “is to find an authentic voice to talk back and participate in the conversation,” Flemming said. He added that Dell has multiple blogs, including one in Chinese, along with microblogging accounts on Twitter and the Chinese site Fanfou. (The latter was not available at the time this post was published.)

The Great Wall of China. Government efforts to monitor and censor the Internet are sometimes referred to as "the Great Firewall of China". Photo credit: National Geographic

Marketers should also remember that, with the high engagement and high participation also comes significant government monitoring and censorship.

As evidenced earlier this month after the Xinjiang riots, the government can swiftly block or limit Internet and cell phone access as a means to control information flow to and from all or part of the country.

Disturbing though these practices might be, the situation is not likely to change any time soon, so marketers should remember that:

• Social media should be treated as an element of their overall strategy (not the strategy)
• Relationships should always be developed and maintained
• Offline relationships are also valuable and can be key to maintaining continuity of operations in case of an online outage

Pepsi Targets Online Influencers in China

With their Voice of a New Generation campaign, Pepsi demonstrates itself to be a strategic player and early leader in the social media space in China.

Some bloggers have been critical of the campaign’s offline logistics, others see a error in going after a small niche audience and the available metrics indicate relatively poor initial online performance compared to other examples. None-the-less, I think Pepsi is blazing an intentional trail that other companies looking to enter the Chinese social media scene should consider following.

Voice of a New Generation is an integrated real-world/broadcast/digital program focused on the “alternative” or “underground” music scene. Battle of the Bands events are held with contestants earning slots on a branded American Idolesque TV show, with buzz and voting taking place in the Web 2.0 space.

Voice of a New Generation Performance

Pepsi’s effort follows the successful Mongolian Cow Yogurt Super Girl contest (seriously, that’s the name). Super Girl generated 400 million TV viewers a month who voted for their favorite performer by SMS. Other talent search shows have been quite popular on Chinese TV as well. While the TV tie-in is certainly interesting, it’s the social media aspect of this campaign that is most intriguing and the real subject of this post.

Online, Pepsi is smart to create a social media ecosystem with many complimentary platforms:

• Tudou–video sharing
• Baidu–forum
• Sina–blog
• Tiany–forum
• QQ–game
• Douban–social networking

SMS/Twitter is missing, which warrants further investigation, but note the somewhat unusual inclusion of gaming. We see the implementation of a holistic plan strongly positioned to drive interactivity with the intended audience.

Why then are the numbers so small, as littleredbook.cn points out? More importantly, why do I think that’s just fine where many bloggers see Pepsi having misstepped by targeting “underground/alternative” music artists and fans instead of going after more of a “pop” audience where the numbers would be larger?

Two reasons.

1. I think Pepsi is going after cultural INFLUENCERS, not the broadest cross-section of the population. In the Coke vs. Pepsi war, it is important to differentiate the brands from one another and Pepsi has clearly decided to be the edgier player. Picking up market share can best be done by having a different personality than the leader. Read Bharghava and also Ries & Trout who explain this type of strategy in detail.

Creating an edgy brand promise is something that requires association. It’s one thing for a company to say they’re about individuality and fun, but another for those that actually live that individuality and fun lifestyle to provide the validation. So what we see here is Pepsi making a strategic choice to go after the small group of influencers. There is adequate literature on the power of influencers in the U.S. market, but I reference a Power of Influence blog post as it pointed me to a new international study (in which influencers are called “Global Multipliers”) for it has one particularly important finding:

“Among Global Multipliers in all markets, those in China are the most likely to use the Internet to share their recommendations.”

Pepsi is dead on target with the Voice of a New Generation strategy. Going after influencers that have their own social media connections on other platforms and in other communities can have great impact in the market. The metrics on the Pepsi sponsored pages alone are simply not painting the correct picture.

2. Pepsi is in the Chinese social media game for the long haul. Compared to Coca-Cola’s 2008 revenues which predominantly took place overseas (75%),  only 48% of Pepsi’s 2008 revenues were generated outside the U.S. That’s clearly got to change for Pepsi to stay competitive. As Fortune magazine points out, PepsiCo’s Chairman and CEO Indra Nooyi (formerly of Boston Consulting Group) is a strategist well aware that “the U.S. marketplace [is] in slow-growth mode even in the best of times, [and] the biggest opportunities are overseas.” Reuters reports that given the enormous potential of the Chinese market, Pepsi is investing $1 billion in China over the next four years. So looking at short-term ROI (using the regular social media measurements) of the Voice of a New Generation campaign is meaningless. The game Pepsi is playing is for billions, not the cost of a one-off campaign.

Whether the underground music approach to tapping the emerging youth consumer segment of China works or not, Pepsi is on the right track looking to engage Global Multipliers in the Chinese social media scene. They should continue to identify these segments and engage them with other creative campaigns.

— “Pepsi Targets Online Influencers in China” posted by Gregg Rapaport

Mobile Netizens

Everyone is aware of the vast number of “netizens” in China which has grown to almost 300 million Internet users. However, a significant portion of these individuals are connected via their mobile phones. Behind the Great “Fire” Wall,  this vibrant community has grown significantly and utilize their mobile phones to stay connected to their peers and engage social media.

In a report released today by the Ministry of Industry and Information and Technology, they claim phone users in China have surpassed the one billion mark at the end of June. Of these one billion phone users, 155 million have access to the Internet through their mobile phones which is an increase of 32.1% since 2008. This increase has been contributed to the launch of the third-generation (3G) network. The 3G network allows mobile phone users to download data faster, make video calls and watch TV programming.

This group of mobile netizens are primarily comprised of the “mostly curious 20-something” crowd known as the “Post-80s”. This outspoken generation grew up with some affluence as China began emerging as a country and are perceived as spoiled and outspoken. This group of mostly urbanites were born of the one-child per household social policy in China during the 1980s are a marketer’s dream! There are nearly 200 million people who are actively engaged online for entertainment using their mobile phones to access sites for email, games, music, and videos.

Last year, PUMA targeted this market by launching a program around the Shanghai Grand Prix, which takes place on Sunday. The campaign utilized the existing global mobile platform by launching a mobile Internet site featuring PUMA’s ‘F Wan’ (Wan in Chinese means ‘play’). The site offered interactive activities as well as being able to connect them to store locations:

It offers mobile users the chance to play an F1 battle car racing game that can be downloaded from the mobile site. Phonevalley has also created a build-a-points system to encourage gameplay and viral activity: players who submit their scores by SMS or who forward the games to friends will earn new points. Every week, the top three players will be rewarded with PUMA F1-branded merchandise.

The mobile site also has a store locator function, with details of in-store promotions, and PUMA F1-branded screensavers and wallpapers. Other marketers can learn from Puma by staging things around existing events that already resonate with the Chinese audience. Secondly, partnering with the leading mobile networks. Puma sought a relationship with QQ, the most popular free instant message and mobile gaming platform in China. Moreover, they encouraged a progression with users by encouraging them to “submit their scores by SMS back to the Puma website” to obtain merchandise and participating in competition among your peers.

Other brands like Coke and China Merchant Banks understands this concept of hitting the post 80s market with their targeted campaign with “World of Warcraft” and “Hello Kitty” msn campaings. The continuous engagement and interaction is critical for marketers to resonate with the fickle, post-80s mobile netizen Chinese market.

Entertained by the Grass-Mud Horse

Chinese internet users spend more time than Americans on entertainment sites (i.e. online games, music, video, blogs and chatting), but not so much on online banking, purchases, and search engines.  Due to the 20th anniversary of the Tienanmen Square massacre on June 4, China shut down Twitter, WordPress, Flickr, Bing, YouTube, and many other social networking sites with no signs of opening them back up soon.  The combination of Chinese netizens internet behavior (prefering entertainment over online search and purchasing) and Chinese government imposed censorship makes it very difficult for companies to penetrate the market using social media tools.  However, difficult does not mean impossible.  To reach target audiences via social media tools, companies must be creative in their strategies and listen closely to what Chinese internet users are saying.

In 2008, the Pew Research Center reported that “few in china complain about internet controls” claiming that Chinese internet users approve of the government’s management of the Internet.  However, a recent viral YouTube video about the grass-mud horse (a symbolic defiance of Chinese internet censorship) proves otherwise.

Michael Wines from The New York Times reports on the grass-mud horse as an “icon of resistenance to censhorship” in China (according to  adjunct professor of journalism at the University of California, Berkeley, Xiao Qiang).  Wines goes on to say that “China’s online population has always endured censorship, but the oversight increased markedly in December, after a pro-democracy movement led by highly regarded intellectuals, Charter 08, released an online petition calling for an end to the Communist Party’s monopoly on power.  Shortly afterward, government censors began a campaign, ostensibly against Internet pornography and other forms of deviance. By mid-February, the government effort had shut down more than 1,900 Web sites and 250 blogs — not only overtly pornographic sites, but also online discussion forums, instant-message groups and even cellphone text messages in which political and other sensitive issues were broached.”  It was called the most vicious crackdown in years by China Digital Times.

Videos of the mythical creature began to appear in early January 2009 on the Chinese search engine Baidu.  The grass-mud horse, a vulgar saying in Chinese, is symbolic and has multiple meanings. In the video, the grass-mud horse fights with the ‘river crab,’ a slang word in Chinese for ‘censorship.’  The viral video, reaching more than 1.4 million viewers as of early March 2009, has many strong double meanings that include mostly vulgar language.  Pairing perceived innocent words with double dirty meanings allows the video to get by strict government censorship allowing it to be widely distributed.

CNN reports in more depth about the specific meanings of each part of the video (Caution: not for children).  Global Voices Online reports about the internet phenomena of the grass-mud horse and its significance in the online and offline world in China.  The grass-mud horse has become so popular that an iPhone app was created for it in early June 2009 – re-named ‘strange horse,’ most likely due to censorship.

Global Voices Online explains that China’s government declared a ban on the grass-run horse after it went global with The New York Times article in early March 2009.  China’s administration claims that “the issue has been elevated into a political level, overseas media has turned it into a story of netizen and government confrontation.”  However, Oiwan Lam from Global Voices makes a clear point that it is not The New York Times, or anyone else for that matter, that is in the wrong for giving this worldwide exposure, but rather “the most crucial role [in promoting the grass-mud horse] is played by the Chinese censor / river crab, without which the Grass Mud Horse is nothing more than a dirty joke.”

Before entering the Chinese market with a social media strategy, it is essential to understand two major insights:

1. Censorship in China is a big hurdle to get over.  Before entering the market, be fully aware of what is censored.  Don’t let your marketing strategy falter because of this.

2.  Entertainment sells.  The viral video of the grass-run horse became so widespread not only because Chinese netizens are passionate about government censorship, but also because it was a medium that resonates with Chinese netizens.  To penetrate the Chinese market:  Make it fun.  Combine your product or organization with a game, video, discussion, or music.  High levels on Chinese internet users are already drawn to these entertaining sites online – make your presense known.

A Different Type of Net Monitoring in China

Image from Businessweek.com

While people generally associate China’s “net monitors”  with  the government agencies in charge of ensuring Internet decency, there is another kind of net monitor that is very popular in China for brands trying to create a Web presence. Daqi.com, for example, is one of a number of agencies that help international companies maintain a positive Web presence in China. Any company needs to be cognizant of cultural differences, or phrases, that might be misconstrued in a foreign country. China presents especially big challenges because of 1) the huge number of netizens, 2) the popularity of social media, and 3) the language and culture barrier. While a communications firm can help a company create an effective online marketing presence, there are few that focus specifically on monitoring the company and helping react to negative comments when they happen. While reputation management is nothing new, online reputation management (ORM) is something that is growing as technology and communications techniques change. The Chinese are really turning ORM into a specialty that is not seen in other countries.

What this means for companies looking to advance their brand in China is that while figuring out their Web presence, they’d be well advised to factor online monitoring and reputation management into the campaign budget.  While Daqi seems to have one of the strongest followings, other firms, such as SinoTech and Ogilvy have recently entered the market (in addition to Web Union and CIC). Brands are realizing the need for this type of monitoring because, “in China like at no other time before companies and firms want to gain a better understanding of what is being said online and by who… In China, there is such a propensity for online chat and BBS’s your Brand could have a problem at any time.” Typically a mix of marketing (including SEO) and public relations, the list below (from SinoTech) gives a simple definition of online reputation management:

What It Is
ORM is the process of following online references to a brand, company, person or service while having a plan in place to deal with any negative feedback. You can think of it as a three-step process, although they may not always occur in this order:
1.    Monitor – Maintain an ongoing system for researching and keeping track of public perception.
2.    Evaluate – Consider individual feedback, as well as the source, outlet, reach and timing, to come to a decision about the risk.
3.    Act – Comment, rebut, draft a formal response or simply ignore what has been said, based on your evaluation.

In a time when the Internet can spread bad PR more quickly than ever before, it is important to remain aware of controversy, and respond to it. The ORM firms are using technology to engage in traditional public relations. This goes to show that digital marketing is a viable and important technique, but one that has many pitfalls. Additionally, regardless of whether the campaign is via online or traditional media (i.e., print, TV commercials, billboards, etc), the blowback of a bad campaign will likely end up online. For example a print ad (right) showing Chinese statues bowing to a

Photo from Chinadaily.com

Toyota (Japanese) vehicle, “had drawn widespread indignation and criticism from China’s netizens, who see them as a deliberate act by the Japanese car firm to insult the Chinese.”  The ad caused an online furor and resulted in an apology from Toyota. If Toyota had been using a firm like Daqi, they might have known first why the image was offensive and shouldn’t be used. If they still went with the photo, Daqi could have helped Toyota get a grasp on the online conversation.

More than any other country we’ve studied so far, China seems to have more opportunity than anywhere else in terms of brands being able to use social media. I think the sheer size and population numbers of the country make it a very lucrative potential market. But the companies need to do it right. A simple gesture or phrase that might not mean anything elsewhere can have grave consequences to a multinational trying to break into the Chinese market.  If a company does create a solid plan, they can find great success in China. There are even companies that will help ensure that the language barriers don’t present an issue to companies.  So overall, even if a brand decides not to hire an ORM firm, they should make sure that they incorporate some plan to monitor their name online–and this applies to China, or elsewhere. And in China especially, there are companies eager to do this for you.

China: Home of the Social (Media) Butterflies

Having a blog is a popular these days,  but if you live in China, you’re probably about FIVE times more likely to have your own blog than if you lived in the US!

Some may even argue that the people of China seem to be obsessively engaged in regular participation in online conversation. 

• 105 million Chinese broadband users communicate via forums/discussion boards
• Over 40% of China’s online users can be categorized as creators, contributors, critics and commentators… compared to only about 14-16 percent of online users in the US.
• 41 million Chinese participate in six or more regular online activities and connect with at least 84 people on a “one to many” basis in a typical week.

What’s most interesting is the difference between how Chinese internet users and American internet users spend their time online. While the typical American internet user focuses their online time on e-commerce shopping, booking travel arrangements, e-banking and other commerce-related activities and transactions….the typical Chinese Internet user is likely to be visiting entertainment sites, downloading online music, playing video games and chatting…..while instant messaging AND blogging at the same time!:)

The typical Chinese internet user is using the internet and SNS more for the mere purpose of fun and entertainment than for financial purposes.  In fact, their financial lives aren’t nearly as dependent on the Internet as those users in the U.S.

Sure, unlike American internet usage, China’s Internet usage is largely censored–making China among the top ten worst countries to be a blogger, however, the typical Chinese users aren’t as concerned about the censorship as Americans would be or assume they should be. In fact, it has been reported that Chinese users approve of the government’s management of the Internet.  Some speculate that Chinese bloggers disconcern of censorship is bred out of their industrious ability to “get around” the controls wish seek to control them.   

At any case, despite their censorship laws, China’s internet penetration rate had surpassed the global average by 2008 according to the China Internet Network Information Center’s latest report and their rate of online social engagement and “citizen journalism” still remains higher in China than in the United States and Europe.   

Currently, 24% of all Chinese broadband users are involved in social networking and social networking sites were found to be influential in 20 percent of Chinese internet users’ purchase decisions.

Although the competiton is fierce competition between many Chinese local SNS such as 51.com and Kaixin and the global leaders such as Facebook and MySpace… I do recommend a brand looking to use social media to appeal to a youthful and online engaged audience in China to partner with an pre-existing existing and wildly popular social network provider such as  Xiaonei.com.  Xiaonei, nicknamed the “Facebook of China” is the biggest network for students, with over 22 million active users between the ages of 18 and 25 that from more than 3,000 universities.  IM’ing, video blogging, online gaming and internet cafes are all other Web 2.0 supportive platforms which are also appear to be vastly popular among the Chinese.  Brands should look to effectively appeal to Chinese audiences through the use of all of these social media measures.

Check out this video which explains an overall view of the digital culture in China:

The GREAT Firewall of China (and how to scale it without being burned)

The internet is often cited as a great engine of ‘freedom’ in China. However, blogger, Peter Foster, believes (as many do) that there is a counter-perception that says the internet in China is actually a tool of collective repression, since the Chinese state has far greater resources than ordinary citizens to control it.

The Great Firewall of China has recently precluded access to Facebook, Google, Flickr, YouTube, WordPress, Blogger, Bing and Twitter (among other sites) in the wake of last week’s Uighur riots; and according to The Wall Street Journal, while Chinese internet users have been regaining access to most social networking websites, it seems that the bans have not yet been lifted for YouTube and Blogger, both subsidiaries of Google.

For many internet enthusiasts domestic and abroad, the omnipresent censorship ability of this ‘machine’ that is the Chinese government presents a point of major contention; however this yields a unique opportunity for the people of China to take back their technological freedom through peer-to-peer information sharing and BBS sites. And for US marketers to utilize uncensored, Chinese-based tools ike advergaming and virtual word platforms.

Companies who want to market in China using social media would do well to realize the tremendous potential of these digital marketing platforms and use them judiciously for the promotion of their brands, services and products in the “Middle Kingdom.”

Although China is said to be thriving online, a deeper delve into the subject reveals that China’s great firewall is formidable and omnipresent. The Chinese government is able to block foreign media content and suppress local SNS networks and netizen content using sophisticated software and government technology monitoring policies and processes. It can do so on a whim, without court order and repeatedly.

In response to this challenging digital marketing environment, US companies wishing to engage Chinese consumers online in China, would do well to consider alternatives to Western marketing techniques by utilizing secondary platforms. For example, <a href="Mashable “>Mashable reports that Twitter can still be accessed through third party clients such as Seesmic Desktop or Tweetdeck; and many brands like Apple and McDonalds are utilizing SNS platforms like 51.com and QQ.com using avatars within online virtual worlds.Additionally, US brands like Addidas are using online gaming forums like Xiaonei.com to engage Chinese consumers in advergaming platforms.While BBS (consumer watchdog) platforms largely serve to channel the frustrations from Chinese consumers who are enraged by the digital censorship tactics of their communist regime; brands wishing to demonstrate a non-interrupted advertising presence in the Middle Kingdom should learn a lesson from highly embattled Google, who tried bucking the Chinese government. For Google the battle to scale China’s digital wall of fire has largely been downhill, and has left them with sustained and painful burn marks that have yet to fully heal.

From this example, a valuable lesson to US Brands can be derived: “When in Rome China…”

China’s Second Life

Broadband penetration in China totals 243 million for users age 13 and above. Of those, 224 million, or 92 percent, contribute to social media. That’s compared to 105 million Americans, or 76 percent of the U.S. broadband population according to Clickz.com.  The Chinese audience has utilized all social media tools from uploading videos to posting to a micro-blog.  Today, companies are taking advantage of the Chinese advancement in technology in order to advertise and market more technical audiences embracing the use of social media.

 China’s Second Life alternative, Hipihi, is a great way for brands to increase their reach to this dynamic audience, which includes over 50,000 registered users in China. Hipihi, according to their website is China’s first 3D virtual world that provides its residents with a real-time online environment for creation, collaboration, commerce, communication and entertainment. The goal is to foster and facilitate the building of an Oriental-influenced virtual world platform that facilitates multi-cultural interactions. Through the removal of physical space-time limits seeks to develop a technology platform people-to-people interaction, HiPiHi for virtual/ online activity that transcends reality and enable a new lifestyle that ignites the passions, dreams and hopes of individuals worldwide.

Hipihi draws the attention of many bloggers who often visit the site since they were established, in part, due to the Second Life craze in 2005.  Creators of Hipihi used the popularity surrounding virtual worlds to help brands market to consumers using viral worlds as a way to communicate and purchase produces.  Hipihi players are all Chinese and the creators of Hipihi think most of Chinese users are using internet or play games for entertainment or networking, therefore, needed this 3D world to satisfy such needs.  If brands want to learn about the developments and attraction to larger online audiences that Hipihi and other 3D virtual worlds are providing for them, using such websites as Hipihi generates the type of attention that helps make marketing to audiences faster and more of a significant use of social media tools.

KFC with a side of Peking Duck

The Chinese have cultural traditions rooted with history that dates back thousand of years. They have been known as leading innovators of technology and have 338 million Internet users and 155 million people

who access the Internet through their mobile phones.  This is the highest in the world. Therefore, in terms of social media, a brand has an immense challenge but an overwhelming opportunity when marketing their brand in China.

Brands from the West have to appeal to the Chinese culture if they intend to break into this market. For a culture that has been established for many years, developing brand loyalty doesn’t seem like an easy feat. However, a brand we know very well in America has had massive success in China.

Kentucky Fried Chicken is the biggest western fast food chain operating in China. It has overshadowed McDonald’s in sales and appeal with over 2600 stores countrywide. The number one reason

KFC has been successful because they focused heavily on localizing their brand. It’s not to the point, where the store is unrecognizable, but where they have embedded Oriental additions to t

he menu and changed their service model to appeal to their Chinese consumers.

In terms of mobile marketing, KFC has launched an online application (Drink Joyfully) that engages youth. The holiday promotional app is similar to the already massively popular game House & Garden. The website definitely identifies the youth and has a fun, bold, and colorful page that reflects that same energy.

KFC has definitely done a great job completely maximizing their resources in China, which has made them the most successful fast food restaurant. What I recommend for any outside brand looking to make an impact in China, definitely make KFC your model. They have completely became apart of the community. Localizing your brand gradually dissolves many barriers and generates amazing success. And just a side-note, when you have teenagers posting YouTube videos of just sitting in your store, you must be doing something right.

Raising the burger bar in China

American brands looking for ideas on how to successfully engage  Chinese consumers using social media need look no further than that lovable clown Ronald, of McDonald’s. Not satisfied with dominating the fast food palates of small and big kids globally, Ronald is raising the bar in the one market every self-respecting brand with serious plans for  growth has its eye on – China.

Here’s how the clown did it:

Went to where the customers are: By opening a McDonald’s Super Value Shop on the site that killed eBay China, Taobao.com, McDonalds not only went to where its prospective customers were but it engaged them in an activity they already enjoyed – shopping for bargains online. Being a smart company, McDonald’s did not have people bidding for burgers but instead gave them an opportunity to bid for gadgets they coveted and expected to find on an online auction site like iPods, digital cameras, laptops and even cosmetics.

Understood its target market’s self-interests and used that to engage them: McDonald’s did its homework and identified the 25-32 age group as the dominant Internet users in China. Having found its audience, McDonald’s went a step further by identifying a self-interest that tied directly to its brand and specifically the Super Value Meals range. The target group had a desire to save money so McDonald’s used appropriate messaging – “McDonald’s offers value for money.” Via its online shop, 100 coveted products would be announced a day prior to bidding opening which meant that users had to check the site for what was coming up and then come back the next day to place their bids. Naturally, once you place a bid, you want to keep checking if your bid was successful and in order to do that you have to keep coming back to the site.

Kept them coming back for more, again and again: Usually on online auction sites, the seller is looking for the highest bidder. McDonald’s turned that rule on its head and invited users to bid DOWN, right down to the price of its Super Value Meals, about $2.41. Each bid reduced the starting price by just .15c and bidders could bid multiple times subject to five minute intervals between bids – a clever tactic that drove users back to the site repeatedly in the hopes of snagging an iPod or other gadget for just $2.41!

Gave users something to talk about: There’s one thing bargain hunters love almost as much as bagging a bargain and that’s telling other people about it. The campaign attracted a lot of user-generated ads touting the latest hot items up for grabs each day. The result? Between launch day on 11 February and April 20 2009, the McDonald’s shop had 2,580,000 visitors, viral by any definition of the word.

By clearly identifying its target audience, going to where they are online, tying its brand’s value proposition directly to the target group’s self-interest, giving them a reason to come back repeatedly and giving them something to talk about which resulted in a user-driven viral campaign, McDonald’s shows other brands how to use social media well, not just in China but in general.

China Censorship Thwarts Social Media Use

When the central government of China is faced with civil unrest or social uprising one way to thwart communication between China and the rest of the world is to cut the Internet.

Continuing our investigation of social media in countries around the world my insight this week focuses on a interesting combination of events that is making it much more difficult for businesses to reach target audiences in China – civil unrest and the embargo of the Internet.

When the central government of China is faced with civil unrest or social uprising one way to thwart communication between China and the rest of the world is to cut the Internet. The censorship of human rights and subsequent blocking of social media channels in China has made marketing to the consumer a hit or miss proposition.

Similar to how Twitter was used recently in Iran, social media is being deployed in China to bring to light human rights issues and civil unrest. Unlike the successful information flood coming from Tehran after the countries recent election, censorship and closing the Internet in China has stop this potential use to spread information. It is also hurting businesses wanting to reach Chinese consumers.

It is this type of censorship designed to stop the flow of social and human issues that will really make it difficult for companies who want to use social media and the internet for commerce. If China closed the Web down to stop protests is also closes it to commerce.

The Internet in China has developed into a mainstream medium in the past years, particularly for urban youth who are spending more time online at the expense of watching television or reading traditional print media, Much like in the U.S. and around the world. This online growth makes it the most effective marketing vehicle for companies to target highly attractive segments in the Chinese market.

Citizens in China feel that the mainstream media has not done a good job reporting on corruption and civil unrest which is why their is such an explosion of citizen journalists.

During clashes recently in west Xinjiang province, Twitter’s impact appeared to be limited. Unlike what happen recently in Iran where social media played an important role in getting information on the country’s election out to the world. It didn’t help that the morning after bloody riots the Chinese government cut all Internet service in the region.

China has also blocked social media sites including YouTube, Facebook and Twitter. One Chinese micro-blogging site called Jiwai is still running. Jiwai is a Chinese onomatopoeia suggesting babble or chatter.

Li Zhuohuan, founder and CEO of Jiwai, a Chinese-language site similar to Twitter. Li points out that 140 Chinese characters contain double or even triple the expressive power of the same thing in English.

Li Zhuohuan, founder and CEO of Jiwai, a Chinese-language site similar to Twitter. Li points out that 140 Chinese characters contain double or even triple the expressive power of the same thing in English.

So we have seen the power that social media can produce to spread information but if the pipeline is closed business lose their voice to target and reach online consumers.

Made in China

As I was doing my required reading to give my insight for China via this wordpress, I stumbled upon this snippet: http://mashable.com/2009/06/02/china-blocks-twitter-and-almost-everything-else/. After reading it initially I was shocked that China would block sites such as Twitter, Flickr, and other American social networking mediums. Then, I was more shocked at my western ethnocentrism. It’s interesting of how our cultural “norms” can go viral. As an American, I believe that it is an inalienable right for individuals to have access to which ever social mediums they choose. This may not be the case for China.  While many of the individuals who commented on this post were outraged, I think that with careful digging they could understand that perhaps China only chooses to allow their citizens to utilize social networking sites made in China.

 

It would be an unfair statement to say that the Chinese government is taking away citizens rights by not allowing them to visit certain sites.  Chinese spend a more significant amount on the internet per week than Americans. Additionally, there are a vast number of Chinese created social networking sites that are frequented. It is my theory that what China is doing by blocking certain social networking sites will be the start of cultural social networking. Social networking is as universal phenomenon but as more countries begin developing their own social networking site we begin to see cultural divides. I believe this will increase as social networking continues to expand.

ChinAmerica?

According to a recent Washington Post Article titled, “Chinese Consumers Eager to Excel at the American Pastime, the only bright spot in corporate earnings reports in recent months has been revenue in places such as Brazil, Russia, India and China.

In China consumer spending hit $1.3 trillion last year and for many American companies, China represents an alternate consumer universe where marketers can rewrite the story of their brands. In China Wrangler jeans are cool, a Wal-Mart opening is the social event of the year, Buicks are young and hip and KFC and Pizza Hut are hot places for dates.

“U.S. companies have been so successful in China because Chinese consumers have a ‘look up to the rich’ attitude and the United States is the world’s top developed country in their eyes,” said Gao Tao, a consultant for the International Brand Association in Beijing.

China has also recently become the #1 country for internet usage, according to the China Internet Network Information Center (CNNIC) which has just published their mid-year statistical survey report on the Internet Development in China. Chinese consumerism and the explosion of internet usage has created the perfect opportunity for American brands to stake their claim and engage loyal customers through the development of social media branding campaigns.

Pepsi’s social media campaign

Pepsi recently launched a social media campaign in China targeted to the youth market. Pepsi created a “battle of the bands” themed event; all elements of the campaign are aggregated online on Pepsi’s main promotional site http://pepsi.sina.com.cn, and a series of satellite SNS groups were created to drive traffic to the contest and stimulate buzz online.

Using a “Battle of the bands” music contest, Pepsi’s campaign stretches across several large China social media sites: Tudou, Baidu, Sina, Tianya, QQ, and Douban. Pepsi’s branding strategy in China appears to focus on a niche group of rebellious youth and is in strong contrast to Coke’s mainstream positioning.

In my opinion Pepsi has done a great job of hitting the popular social media sites among Chinese youth and creating a foundation for the brand in order to compete against Coke.Pepsi also fully branded the rebellious spirit as “Pepsi”. Over time this branding will take hold and return some benefit especially if Pepsi keeps its sights set on social media and continues to engage its target audience in the areas where there interests lie.

Censoring Your Message

On January 20, 2009 people around the world sat and watched Barrack Obama’s inauguration speech including the People’s Republic of China up until Obama said, “Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions.” Like Twitter and YouTube, China censored the president of the United States.

China’s censorship is the government’s effort to neutralize critical online opinion. According to Britney Wilkins’ 25 Shocking Facts About Chinese Censorship, offending China online warrants jail time and fines are often issued as punishment.

What does this mean for social media in China? According to Bill Snyder social networking trumps censorship every time.

I’m not so sure that is the case. So how can brands tread lightly to reach their Chinese audience without offending its government?

Social media is all about the online conversations and engaging others. In order to tiptoe around the government’s regulations while reaching its target audience, brands have to do their research. Utilizing a number of social media sites could greatly benefit a brand because while one may be censored at the time, one may not.

According to BusinessWeek, in order to penetrate the Chinese market brands should:

1. Build Links: Chinese consumers are more focused on brands than most of their Western counterparts. They want to know which new trends will give them added status, and buy luxury goods not because they necessarily like them but because they are representations of success.
2. Create Buzz: “Buzz marketing is a big trend in experiential marketing which is very appealing to young people,” said Wang. “It empowers the consumer.”
3. An increasingly popular means of engagement is inviting customers to generate brand-related content.

Although brands should be flexible with the platforms they select, they should not censor their message.

Can Social Media Advance P2P Lending in China?

Ask any Western blogger or human rights activist about China, and they’ll tell you that the People’s Republic has evolved into the poster child for Internet censorship.

The Golden Shield, also known as the Great Firewall of China, is the subject of countless blog posts and Web media articles.  China’s decision to renege on its pledge to provide unrestricted internet access to journalists at the Beijing Olympics became one of the biggest stories of the Games.  And the shutdown of Twitter, Blogger and others on the anniversary of the Tiananmen Square massacre generated criticism from a myriad of social media experts.

But despite the fact that China and censorship have become synonymous, social media has given rise to a unique philanthropic venture based in Shanghai.

Peer-to-peer (P2P) lending, popularized by organizations like Kiva and The Grameen Foundation, has found a niche in China with Qifang, a microfinance website for Chinese students who are looking for loans to finance their education.

“Qifang” comes from the Chairman Mao quote, “Bai Hua Qi Fang,” meaning, “Let a hundred flowers bloom.”

Qifang primarily serves students at three or four-year universities or colleges and post-graduate training programs.  Any Chinese undergraduate who has received an admission letter or valid student ID can post their needs on www.qifang.cn.  Loans range from RMB 3,000 to 100,000.

Lenders include banks, corporations, NGOs, non-profits, philanthropists, and individual private donors.

In China, there are 76.7 million Internet users between the ages of 18 and 24 years (no other age group comes close in terms of number of users).  Qifang’s founder estimates there are 25 million students in China who pay an average tuition of $700 a year.  That translates into $17.5 billion in potential loans, providing Qifang with an enormous target market given that it has so few competitors.

The combination of Qifang’s web services and social media tools help students and lenders establish “communities of trust” built around supporting education.  Qifang’s primary social media tools are a blog (which is nearly impossible to review in English), and four unique widgets.  Each widget is a compilation of information about a student in need including a profile picture, the name of the student’s school, the amount of their requested loan, the amount they have raised so far, and a description of their need (e.g., “I want to finish college without any debt”).

The student featured in the widget is randomly selected by Qifang, and the widget can easily be pasted into blogs, websites, or social media profiles.  When a student’s loan has been 100% funded, Qifang’s system randomly selects another listing that needs promotion.

Qifang labels itself as an “innovator in technology,” but the principles which guide its strategy in China are relatively simple and straightforward:

1. Find a gap in the market and fill it.  Experts contend that P2P lending will have a greater impact in China than in Western countries because of the absence of other consumer banking alternatives.  Today, Qifang has only one competitor, and with 25 million students in China, there is a great need for reliable loan solutions.
2. Calculate and develop strategies to mitigate risk.  Each Qifang loan recipient is required to scan in their national ID cards to verify who they are, and list their school, major, grades, hometown, parents ID cards and income before obtaining a loan.  Qifang is reportedly creating partnerships with the schools directly so that the information students’ supply is verified, and so that loan payments can be made directly to educational institutions.
3. Support existing government initiatives to avoid controversy.  Bloggers have speculated that Qifang’s platform is indirectly supported by the Chinese government’s recent push for creating a more “civil society” in China, a society in which citizens trust one another more.  If this is true, it puts Qifang in the enviable position of being a company which (indirectly) advances government initiatives. (Note the founder of Qifang attributes some of their success to “a really supportive government” in the video above.)

It will be interesting to see if other microfinance sites pop up in the wake of Qifang’s success, and if they use social media to do it.  It’s possible that they’ll operate using the same guideposts I’ve described here.  But if China is at a tipping point for embracing social media for social good, it also has the potential to devolve further into Internet censorship.

The Great Fire Wall Of China

(^MK) The story of The People’s Republic of China, PRC has been remarkable over the last few decades but remains a contradiction in many ways.  It is an economic superpower with markets becoming more open and free, yet its people are denied basic democratic rights, freedom of speech and freedom of assembly.  In the space of three decades, PRC has been transformed from an underdeveloped Asian nation into, what experts say, will be the economic powerhouse of the 21^st Century.

China, the great…

• With 1,338,612,968 people as of July 2009, China has got the world’s largest population.
• China not only has the world’s largest Army, but also is a nuclear and space power.
• With a real growth in GDP of 9.8% (2008), China is among the top economic powers in the world. With its recent growth rates, China is rapidly escalating up the world economic order:
• China is a net lender to the United States and Russia. China became the largest U.S. Treasury holder overseas last year.  The position of China as financier to the rest of the world, according to some threatens the position of the US dollar as the reserve currency.
• Chinese cities are becoming modern metropolises; Shanghai, with 20 million inhabitants China’s largest city, is growing at an unseen pace: Rapid development has created a skyline to rival New York’s or Tokyo’s.

These and other aspects present China as a golden opportunity for businesses that want to develop and expand, but:

Don’t rely on social media, yet…

In terms of Internet and social media, China is still in its infancy and it is far from clear whether the government will ever allow it to grow up. China is a communist state, ruled by a party that is intent on remaining in control. So the big question is whether social media can exist in such conditions. One class book Personality Not Included, written by our instructor Rohit Bhargava, defines social media as “enlightenment,” in which “people are moving from simply consuming content to creating it.” Clay Shirky’s book Here Comes Everybody posits that social media “provides a remarkable increase in our ability to shape, to cooperate with one another, and to take collective action.“  Shirky’s subtitle, The Power Of Organizing Without Organizations, suggests the influence of social media on society: In his book, Shirky makes the point, “new technology enables new kinds of group-forming. When we change the way we communicate, we change society.”  Social media is a powerful tool for countries that are to open to societal change but it is questionable whether China is one of those countries.

China censors Internet usage

There are two very recent and pertinent examples of why social media may not be successful in China. The Chinese government actively censors Internet usage. Most domestic Internet sites and services are closely monitored and controlled by the Chinese Government.  A recent Guardian article reveals that Chinese censors blocked access to Twitter, Flickr and Hotmail only two days before the 20^th anniversary of the crackdown on democracy protests in Tiananmen Square.  This action was part of a long series of attacks on democratic ideals.

The latest brick of the Great (Fire) Wall: filtering software

The Chinese government’s latest effort to control the Internet has been to propose that computer manufacturers include filtering software into new personal computers. This filtering software, called Green Dam, is a form of censorship software and presents yet another threat to freedom of expression. Green Dam is ostensibly designed to filter out pornography and other “unhealthy information” from the Internet, but reportedly is also programmed to censor content including political information.  The Government has given itself the right to determine what is unhealthy information. Heavy international protests forced China to postpone the introduction of Green Dam – for now.

These two examples are amongst many where the Chinese authorities have taken action against any attempts to promote democracy.  Social media is an efficient and effective way of promoting it to a wide part of the Chinese population.  Until the Great Firewall of China comes down, it is hard to see social media being successful despite the country’s burgeoning economic successes.

-Moritz

Niche Networking – The Future For China’s SNS

China is a fascinating country to research for multiple reasons. There is a longstanding reputation of social and political unrest that has sparked international debate and when companies choose to enter the Chinese market a new set of rules come into play. For this post I decided to look at how the world’s largest population is using social media to engage with one another. We know that China ranks #1 in terms of Internet use with 243 million using the Internet and 224 million of that group is engaging in social media. So, what are some of the emerging trends and how can a brand use this to its advantage?

The post China’s “Plan B”  Social Media Strategy; Interaction after Connection from the blog Little Red Book reviews China’s SNS and raises an interesting point discussing how these networks are evolving. In China, social networks like Tinaya.com and mop.com are powerful because people are connecting over common interests rather than personal contacts. Unlike Facebook where you initially establish your lists of friends by inviting/joining people you know and tend to shy away from people you don’t know; these networks join people over political issues, hobbies, interests, etc.

The post discusses the evolution of  social networking in China and the desire for the social media savvy to go beyond simply connecting to interacting with people who share mutual interests.  This trend of niche communities compliments Chris Anderson’s theory of The Long Tail which basically says that the new market place is moving from mass to niche marketing.

I think groups connecting over issues rather than personal relationships are likely to have a more substantive discussion when engaging online. They are also more likely to  be attracted to similar products and organizations. This trend presents a great opportunity for brands in China. The idea that people are joining social networks to discuss specific topics important to them also places them into easily identified target markets.

Marketers all over the world want to know how to penetrate the 224 million Chinese that are engaging in social media. As importantly they want to spend less time finding their niche market and more time engaging with them. These social networks are essentially doing some of the background research for a brand. The groups are sharing what is important to them because it is what brought them together to have a discussion. Rather than throwing a dart and hoping it lands somewhere near its target, a brand can join these networks to look for groups that are discussing topics they can add value to and then cultivate relationships with future brand enthusiasts.^JT

What do Plasma TVs, Ikea and Ford have in Common in China?

A growing trend in China is group purchases, a concept in which consumers organize a group online to get wholesale prices from retailers or distributers.  Online Group purchases can include any number of items ranging from plasma TVs to Ikea furniture to even Ford cars. 

Sam Flemming founder and CEO of CIC , the first Internet Word of Mouth (IWOM) research and consulting firm in China, has penned several blogs (such as this one ) about this phenomenon and its growing relevance within the world of social media, specifically related to IWOM, which according to Flemming, is “not only influencing purchasing decisions, but also the way people make purchases.” Flemming also believes that using such a network to bargain shop for products is a natural online extension for the Chinese, who by the way outnumber the United States in both number of internet users and hours spent online. 

From the Hands of “Netizens” to the Arms of Companies

Until recently, group purchases where initiated by “netizens” in a grassroots fashion.  However, this trend is changing as brands and communities are recognizing the opportunities that lie in such forms of e-commerce.  In fact, last year when Gome, the largest home appliance retailer in China partnered with KDS, one of the most popular BBS groups, the results where overwhelming.  This particular case study yielded more than three times the desired results.

Turning Critics into Converts 

However, not all retailers are thrilled with the idea.  Last December, a Ford dealership ran into some problems with a group purchase deal which left some dealers rather unhappy.  Flemming addresses this by saying that “automakers must develop a deeper understanding of trends and see group purchases as an opportunity rather than a threat.”

I couldn’t agree more.  Why?  Not just because of a growing trend, but rather because I see online group purchases as an especially effective way to build and maintain customer loyalty by using social media.  Moving a consumer through the process from brand unawareness to brand loyalty (which involves the in-between steps of awareness to consideration to interest to trial to initial purchase) is no easy task.  But once you achieve brand loyalty, brand equity usually follows.  And online forums to connect similarly-interested parties are an excellent way to move audiences through this process.

Beyond Point of Purchase 

Group purchases not only benefit brands leading up to a sale, but more importantly foster after-purchase communication.  Group members get to know one another, share experiences (both good and bad) and organize future purchases – where the brand loyalty is truly observed.   These components create an online sense of community that is much harder to achieve through traditional communication and marketing channels. Additionally, this system allows brands to monitor the online conversation and subsequently respond quickly and efficiently. 

What the Future Holds

Flemming tells us that online group purchase discussions are also becoming more prominent; thus demonstrating the rising popularity of the concept.  Flemming isn’t the only one talking about group purchases.  In, The Christian Science Monitor  and in 2008, the China Herald blog also wrote about the benefits of this concept. 

Therefore brands and organizations should take notice and find ways to incorporate this type of unique online, social media into their outreach efforts.

Blowing the Whistle Online in China

China has left the US in the dust when it comes to Internet use.  According to Xinhua and the China Internet Network Information Center, 338 million Chinese “netizens” are now online – exceeding the US population.  Their top 10 most popular Internet sites include Sohu.com (the first publicly traded Chinese company), Sina.com and Baidu.com.  

Sohu.com and Sina.com have both adopted Sarbanes-Oxley accounting standards.  The Sarbanes-Oxley Act or SOX is of course the 2002 US federal law enacted “as a reaction to a number of major corporate and accounting scandals.”   

I think it is interesting that popular  Chinese Internet sites would adopt Sarbanes-Oxley.  Is it limited to the accounting standards or does it extend to other provisions to prevent or address corruption like penalties for retaliation against whistleblowers?  In China, whistleblowers have traditionally not been protected, in fact – just the opposite. This past December,  The Beijing News published an investigative report  citing that “public security officials in the City of Xintai in Shandong Province were said to have been institutionalizing residents who persist in their personal campaigns to expose corruption or the unfair seizure of their property.”  They went on to report that “some people said they were committed for up to two years, and several of those interviewed said they were forcibly medicated.”

When this story broke, it justifiably outraged the public and drove “netizens” by the thousands to the Internet.  At Sohu.com, this story was reportedly the fifth most-viewed headline and by the evening, 23,000 Chinese had commented on it.  According to Dr. Charles Zhang, Chairman and CEO of Sohu.com, “People log onto the Internet and Sohu.com because in China, there is no Forbes, Reuters or The Washington Post. Print media was all state controlled and official, and the Internet filled this void.”   

The sad fact is that whistleblowers in China have traditionally paid very dearly for standing up to corruption. We have all read the headlines about what happens to those who become an embarrassment for the government. This includes both those who are committing the crimes as well as the people who seek justice by exposing them.  In 2007, Zheng Xiaoyu, former head of the State Food and Drugs Adminstration was executed for taking bribes to approve medicines. The same year, Zhang Shuhong, a senior executive with a major Mattel supplier, allegedly hung himself  over the lead paint scandal in children’s toys.

“If you want to have a good system of consumer protection, protecting whistleblowers is an essential requirement,” says Wang Hai, a Chinese consumer rights advocate.”

The Internet has an important role to play here in terms of making these incidents public and being a catalyst for change.  In fact, the Government of China just announced a month ago that they’d established a new confidential anti-corruption hotline for whistleblowers.   The program’s Web site generated so much interest, it froze.  In its first week,  11,000 calls were received and 6,000 online reports filed.  According to the Xinhua News Agency, “operation capacity of the website currently can only accommodate 1,000 visits simultaneously, but it will soon have its bandwidth doubled and software updated to avoid any disconnection.” Once capacity issues are addressed, social media can help spread the word about this program and – if earned – encourage trust in this new system, motivating people to come forward and file reports.  

Kudos to Sohu.com and Sina.com for adopting SOX, which is not inexpensive.  If by doing so, they adopt all the provisions in the law, it will position them in a remarkable leadership role in China whereby the culture there around seeking justice may slowly change.  It is the right thing to do and hopefully, their positioning will be emulated by their peers, protect whistleblowers, safeguard consumers and potentially save lives.

Question of the Week: China

Every week the members of the class will answer a new question on this blog. We’ll focus on a different region of the world for each week throughout the rest of the class.  Here is this week’s question:

From your reading and research on China, highlight one key insight or finding you found unique and interesting and discuss what implications it has for brands wanting to use social media to reach an audience in the Chinese market to promote their products or services.