China is the standout market as digital technology reshapes all aspects of brand communication

Despite the continued downturn in the Chinese economy, there appears no let-up in the Chinese public's insatiable appetite for branded products and services. Such an appetite appears to stretch right across the product spectrum.

But where there has been remarkable change in Chinese consumer behavior, and where the economic downturn is matched by a decisive upturn, is the crucial brand building area of media consumption.

Chinese consumers lead the world in their consumption of new media.

Foreign companies hoping to cash in on this brand consuming bonanza need to take great care with their understanding of very different and changing media consumption habits of the Chinese public, especially those born recently.

In particular it is the digital technology revolution that is totally reshaping all aspects of brand communication and nowhere is this more true than on the Chinese mainland.

Chinese heavy users of new media now spend almost eight hours every day consuming one type of media communication channel or another. But what foreign firms need to be most aware of is the fact that two-thirds of these daily hours of media consumption are spent almost evenly between smartphones and laptops.

Chinese consumers now spend only about 90 minutes a day watching TV, which partly explains why the Internet accounted for almost one-third of media spending last year, and TV comprised less than half of total media spending for the first time.

Not that all of this signals the death of TV advertising in China. But brands need to make use of TV ads, and they also need to spend more strategically. The most popular Chinese TV reality shows still proved very attractive for many brands as an effective communications vehicle.

To gain an understanding of the changing media consumption habits of Chinese consumers, foreign firms should make use of the data and work more closely with big Chinese Internet brands such as Tencent and Baidu. These companies gather enormous amounts of user data to understand consumer behavior, and they make this data available to brand partners.

There appears no barrier to foreign firms linking with the likes of Chinese Internet giants Tencent and Baidu.

Such links are even more important than ever given clear evidence that there are big changes in the meaning of brand consumption in China, not just changes in media consumption. Chinese consumers now appear more knowledgeable and experienced and increasingly discerning and discriminating in their brand purchase decision-making.

Chinese brands are viewed more attractively and comparable to famous foreign brands. Brand consumption meaning appears to be moving from an outward, public display of success and status to a more reserved, private experience, the aim of which is more about self-reward and affirmation of self-identity.

It is now the case that Chinese consumers access the Internet more frequently by mobile phone. Furthermore, they are watching mobile devices not just when they are out and about but also when they are at home.

While Internet use remains at its highest in Europe, at 75 percent of the population, it is on the Chinese mainland that the most rapid rise has taken place in recent years. Internet use in China more than doubled in five years, reaching 46.9 percent of the population, 632 million people, last year, the China Internet Network Information Center says. The number of mobile Internet users reached 527 million and, for the first time, mobile surpassed the PC as the primacy access point to the Internet.

As a result, it is now vital that foreign firms embrace digitization in all areas of brand building in China. Digitization enables companies to gather and analyze more data, distill insights, and share information rapidly, coordinating all functions from production, through supply chain, e-commerce, payment and customer communication. With digitization, brands from any market of a developed or fast growing country can become more nimble and responsive.

Tie-ups with the likes of Tencent and Baidu are not the only option open to foreign firms and their digitization plans in China. For example, Intel, Microsoft and Baidu collaborated with Chinese home appliance producer TCL in order to form a connection using cloud computing.

Last year mobile payments expanded rapidly, with just over 205 million Chinese consumers making payments via mobile apps by the end of June.

Foreign firms aiming to build brand presence in the still brand-conscious Chinese mainland marketplace should also closely study the increasing number of recent research studies of Chinese consumer behavior online.

Social media engagement carries a different meaning in the minds of the Chinese public. Social media consumption is about much more than sharing social lives with friends. Chinese consumers make use of social media to define and communicate a personal identity.

Another uniquely Chinese phenomenon is the power of recommendation via social media. Foreign firms need to understand the opportunity that social media presents to build a brand that consumers recommend to a friend. In the Chinese mainland market, it is social media advertising more than any other advertising channel that offers the ability to capitalize on the power of recommendation.

Recent research studies also reveal that Chinese male consumers buy slightly more online than females do. Studies also found that when using only one electronic device, males favored mobile, while women are more likely to buy on a PC. However, using multiple devices was the overriding trend for both genders.

Furthermore, while the vast majority of Chinese consumers appear to search online before buying, it is also apparent that more than half of all online purchase decision-making by Chinese consumers is heavily influenced by recommendations from friends or comments recorded on social media by someone who has recently engaged in buying and consuming a similar product.

Less clear at present is the influence, both informational and persuasive, of online advertisements. Some studies point to moderate to low influence and to Chinese online consumers not relying heavily on online advertisements for product information. The importance of personal recommendation in Chinese consumer decision-making appears to be highlighted further with studies revealing that TV ads also do not appear to carry strong influence.

It would appear, therefore, that foreign firms need to view Chinese consumers' social media activity as a crucial market research tool and one that will provide key insights into brand consumption meaning in the minds of the Chinese public.

So teaming up with one or more of China's dominant Internet companies such as Baidu or Alibaba has never been more important for foreign firms and their brand building across the Chinese mainland.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer in marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.

(China Daily European Weekly 03/20/2015 page10)