Don’t Fall Behind in Your Digital Strategy in China

With 600+ million Internet users, China is one of the world’s most mature markets in terms of online channel development and digital awareness. It has become essential for multinational companies to capitalize on major trends in China’s Internet space (e.g., O2O partnerships and the social media boom) and develop a more comprehensive digital strategy to enhance customer experience.

I was on the ground in Shanghai and Hangzhou last week for one of FSG’s major Q3 research initiatives for China. We’re writing on how multinationals can establish an effective digital strategy to engage their customers. It was an extremely rewarding trip. I was able to meet with multiple MNC senior executives and digital experts, and gathered valuable insights from their perspectives on China’s digital landscape.

Here are a few thoughts:

MNCs should closely monitor government initiatives that are driving innovative local upgrades. China’s rapid digital development in the past few years is largely attributable to the government’s policy focus on innovation. Made in China 2025 offers companies commercial incentives to drive more automation and smart manufacturing, and Internet Plus encourages the integration of technologies across different industries to enhance operational efficiency and generate new sources of revenue.

B2C companies must adapt to a rapidly changing, tech-savvy base of local consumers that exhibit an enormous appetite for online shopping. Driven by a vast mobile wallet network, Chinese consumers are leading the game globally for mobile commerce. In a sharing economy where everything ranging from cars to basketballs and umbrellas are being shared, MNCs should pay more attention to the channel shift from PC to mobile devices, and design targeted marketing approaches to engage consumers with key opinion leaders (KOLs) and content-oriented marketing.

B2B companies need to be more targeted when working with local online platforms and distribution partners. With local Internet giants like Alibaba and Tencent dominating key online sales and marketing channels and proactively expanding their O2O partnerships, homegrown online platforms have become a major sales tool for retail companies. MNCs in the B2B industries will also be able to capitalize on digital marketing, but will have to be more targeted when working with local online platforms and distribution partners. The tactics include selling more commoditized products and gaining marketplace traffic for branding purposes on Tmall and JD.com, improving public account marketing on WeChat, enhancing search engine optimization on Baidu, engaging key opinion leaders on Weibo, and identifying positioning differentiation of other smaller online partners and selectively working with them.

Despite concerns about Internet restrictions and cyber security regulations, most B2B and B2C companies in China are proactively embracing the benefits of an omni-channel strategy to boost sales and enhance brands. I look forward to sharing more strategic frameworks and best practices from both multinational and local companies when the China digital strategy report is published in July.


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