China Marketing Weekly: Why Foreign Companies Fail In China
Do you still remember that huge Facebook data leakage scandal? Chinese netizens were not involved then, but a similar thing just happened in China. Data was stolen from tech giants Alibaba and Tencent.
This week, we also talk about why foreign companies fail in China, if WeChat can be replaced by another instant messaging app, and how IKEA is trying to dig into the e-commerce market.
Is The Boycott Real?
Nationalistic marketing doesn’t always pay off, especially when it’s a Chinese company that lies to Chinese citizens. “Red Core” browser claimed to be a completely made-in-China Internet browser, but it was later found out to be based mostly on Google Chrome. - Read more (English)
There has been a trend towards nationalism in China, but it’s certainly not everybody. I predict this will continue long into the future. Like America, the Chinese market is big enough that many brands will appeal to their egos, creating a cycle. Some will go with it, others will not. It’s tough to say just how big the trend is though, since the most nationalist ones are so loud. But I can say that every single time we have reported a nationalist boycott in China, I haven’t actually witnessed it on the streets of Nanjing.
Why do foreign digital companies fail in China? There are several reasons to that. At NMG, we like to sum it up saying: “China is different!” But to be more specific, some of the reasons would be: a lack of understanding of Chinese market, inability to catch up with local competitors and slow decision making. - Read more (English)
IKEA enters Chinese e-commerce hand in hand with WeChat. So far, the Swedish company has not done so great with e-commerce in China. But this week they opened a temporary pop-up mini-store on WeChat, allowing its users to access limited collections elsewhere unavailable. - Read more (Chinese)
Cryptocurrency-related posts disappear from Baidu Tieba, a popular forum-like platform. Tieba was one of the places to discuss currency exchanges in China’s digital world - next to WeChat groups. Tencent and Alibaba also announced they’d block crypto-trading transactions. The actions follow the government’s efforts to closely monitor domestic and overseas cryptocurrency platforms operating in China. - Read more in Chinese and English
Chinese government has frozen all game license approval. It has already caused huge losses in the industry for companies like Tencent, EA and Activision Blizzard. It’s unknown when the situation will change as the freeze is reportedly caused by a lack of clear leadership in the related departments of the government. And no one is willing to take a risk of allowing new products onto the market. - Read more (English)
Today’s Headlines launches a cross-platform advertising alliance system. It’s supposed to link traffic owners (i.e. apps and websites) and advertisers. Considering how well Today’s Headlines has been doing with their own in-app ads, it’s probably worth taking a closer look. - Read more (Chinese)
Ofo launches new in-app video ads - and it looks like a cry for help. It’s been reported for a few months now that the company is in serious trouble. In order to increase revenue, Ofo decided to make sacrifices in user experience. The 5-sec video app is played after users scan a bike and before it’s unlocked and ready to go. Considering most of their bikes are too broken to use, it may be the final nail in Ofo’s coffin. - Read more (English)
Is any messaging app able to threaten WeChat’s position in China? “Bullet Messaging” App just ranked as the most downloaded free app in the Apple app store in China. It offers a pretty odd “swiping” interface - and it may be the main reason for such a good score in such a short time. It surely got Chinese people’s attention. But will it last? - Read more in English and Chinese. Or just watch a video.
Three billion (sic!) data pieces were stolen from China’s biggest tech companies. Shenzhen-based developer company working for Chinese mobile operators collected user data from Alibaba, Tencent and other giants through malicious software planted on the mobile operators’ servers. - Read more (English)