Functional knock-off brands?
I spent a bit of time in Beijing's Wangfujing shopping district: western brands were everywhere.
In the main part of the shopping area, Nike, Adidas, Rolex, Tag Heuer and Kentucky Fried Chicken were prominently positioned. Yet examine the crowds a bit more closely and you'll find that very few people are actually making purchases in the high end stores.
KFC and McDonald's are packed (we are well on the way to fattening up the locals) but if you want a Rolex (almost a Rolex) you can simply buy one in from the many nearby back alley street vendors for about $20 U.S.
Locals in Shanghai say they rarely, if ever purchase the so-called fake goods. Many of these fakes are simply what we would call "seconds" that come directly from China's many factories producing leading brand apparel, for example. A ray of sunshine for unhappy brands was the recent official closing of the famous Xiangyang Market where one could buy a "fake" anything. Unofficially the market has simply moved to a new location -- near -- The Science and Technology Museum in Pudong.
Advertising, WHAT advertising?
Media that you can literally touch, feel and show your friend sells well. In other words, search.
You can describe search site buying with three words -- Google, Baidu, Ali-Baba -- and not necessarily in that order.
Of course, no one really knows who to trust when trying to determine which site is in the lead, but many claim to be at the top of the heap. There are many firms trying to get their arms around understanding and using third party metrics. The dynamics of doing business in China would require the development of a trust relationship -- and later an understanding of how to use third party tools -- before any conclusions can be drawn.
Industry associations like the Asia Digital Marketing Association headquartered in Hong Kong (led by Upstream's David Ketchum and director Kay Bayliss) and the Interactive Advertising Bureau's arrival in Singapore are positive signs of growth, but both the ADMA and IAB face an uphill battle in establishing standards and getting publishers and marketers to adopt them
Again, please don't hold your breath waiting for growth
At Thursday's "Harnessing Web Analytics" session (moderated by yours truly), attendees told quite a story about the use of third party resources. An informal survey of 100 or so attendees revealed that only two actually used analytics. Not one person raised a hand when I asked if they felt they had a "good understanding" of their audience.
The "Budgeting and Integrating Search into Digital Marketing Strategy" included some sound advice from the likes of Timothy Peck, global web marketing manager for Tektronix, and Jinwei Dong, interactive marketing lead for IBM China.
Sound advice came in the form of developing strategic plans that included success metrics and keyword selection. Though many of the tools we use to develop keyword plans and manage bids do not exist in the third party application world as we know them in the U.S., the obvious upside to having these tools might be the catalyst for growth in development.
However, given the do-it yourself culture that has slowed the growth of third party research, analytics and tools, we shouldn't expect the same level of sophistication westerners enjoy anytime soon.
His own worst enemy
The moment one sets foot off the plane in Shanghai, one is struck with (aside from the polluted gray sky) a reminder that you may as well be wearing a bulls-eye.
I had Starbucks in the Forbidden City, McDonalds in the Summer Palace and felt absolutely no sadness about the continued degradation of a civilization that led the world in arts and sciences for centuries. A people once known for thought leadership is now famous for producing the lowest quality consumer goods on the planet and a less-than-sound approach to business ethics.
I spoke with several local businessmen. One described the situation very well, "There are a billion people here; you simply can't compare this to a western professional environment," he said. "You [westerners] work hard to protect your reputation. In the western world, one bad deal and your reputation is damaged to the extent it may not recover. In our world, we have millions of options if a deal goes wrong, and we can certainly do the math."
In the end, it's alright to be excited about the potential in China, but you can't simply hope to arrive on the scene and expect business to come to life as it has in the western world. The alleged rapid growth hype we keep hearing about may take a decade. For exuberant marketers heading east, the growth they are expecting will just have to wait until the marketplace matures.
Kevin Ryan is the Chief Executive Officer of Kinetic Results. Read full bio.