The Chinese Way

Jason Spencer is the managing director of Millward Brown in Shanghai. In the latest Foviance podcast, we discussed customer experience and digital marketing in China.

Hi Jason. Can you tell us a bit about yourself?

I’m originally from Brisbane, Australia, but I’ve been in greater China for the last 15 years. At Millward Brown, most of the work we do is helping our clients with their brand and communication strategies, predominantly in mainland China but also in Greater China, which includes Hong Kong and Taiwan.

I’ve heard differing stories of how digital plays a role in Asia: everybody uses mobile, nobody uses computers and all sorts of crazy ideas.

I can really only answer for China, because it’s very different across the Asia Pacific region.

Technology adoption in China has picked up and accelerated phenomenally in the last ten years or so. But it’s not so much blogging that’s big here, nor Twittering, and it’s not so much social networking in the sense that Facebook is a social network forum. What’s different about China is that when people go online here, their main activity is to go onto bulletin boards (BBS). It’s something I remember from 20 years ago when I had my first modem.

Bulletin boards are culturally and socially ideal for people in China using the internet. You can log on anonymously and have your say and air your complaints and participate in a dialogue with other web users about controversial issues. That’s something people are not able to do in real life.

What impact does the use of bulletin boards have on brands?

It’s very, very easy for a brand to make a small mistake and then have that mistake magnified by the level of discussion that goes online. Mercedes Benz about eight years ago had an issue with one of its customers. A dealership apparently didn’t want to take a car back and so the customer set up some cameras and took photos of himself bashing his Mercedes Benz to smithereens with a sledgehammer, and then published that online. Then other people started talking about the issues they’d had with Mercedes Benz, especially the after-sales service. Mercedes Benz, to their credit, responded quickly and staunched the level of discontent that was being displayed online. I think Ford have had some oil pump issues with the Ford Focus. It was only after Ford themselves were trawling and scanning what was being said online that they were able identify this as a significant issue and then address it.

Is e-commerce playing much of a role in China?

I don’t think there’s many retailers that have independently tried to capitalise on e-commerce in China, or been successful at it. Certainly not as much as you might see in the US or in Europe.

There’s a company here called Taobao, which started off as a B to B forum for people looking for components for machinery or manufacturing, and things like that. Recently they have moved much more towards the business to consumer model.

When people here buy their houses, they basically buy an empty concrete box, and then it’s up to them to go out and renovate that and put in all the toilet fixtures and the kitchen fixtures. Now people will join websites like Taobao and engage in group buying using the bulletin boards. Everyone gets together on this third party website and then goes and bulk-buys from a particular supplier to get a better deal. That sort of thing is very successful here.

What is your prediction for digital marketing in China?

Most of our clients still devote a single-digit percentage of their communications budgets to digital. I’m expecting this will grow exponentially in the next two to three years, especially as the price of advertising in China will become exorbitant, really. I think a lot of clients are being forced into a situation where they would like to look at digital as a more cost-effective platform, and then once people are forced to use that platform a little bit more, that’s when I think you’ll see the creativity and real maturity start to develop.

Thank you Jason for taking the time to speak to us. The full podcast will be available for download from the Foviance website soon.