Approach marketing in China from the inside-out, or risk being left outside the conversation.

With government shutdowns of Western internet services dominating the headlines, companies are reminded of the challenges of doing business in China. But it isn't only the Chinese government causing problems for Western companies. Based on recent market research of China's expansive online population, fundamental differences in the profile of Chinese netizens contribute to the difficulties of marketing in that country. Understanding these differences is the first step to a successful strategy.
 
Next is to reframe the standard tenets of marketing based on a genuine appreciation of netizen-consumers and the myriad places they share online. Let's start with a look at some of the underlying differences in the Chinese online market…

First there are differences in demography. Companies need to think Young Urban Educated and Professional. Across each of these four characteristics, the Chinese netizen population -- we call it the Chinese "Netpop-ulation" -- differs sharply from that of the United States. Nearly three-fourths of Chinese netizens are under the age of 35; most live in urban areas -- particularly the major cities of Beijing, Shanghai and Guangdong; 67 percent have college or advanced degrees; 62 percent are employed full-time.

Then there is the mobility issue. Nearly half go online regularly from a mobile device, spending the equivalent of just $8.00 per month on data services. (Americans spend $35.00.) Almost one-third go online from both a cell phone and smartphone. Internet cafes also proliferate in China's urban centers, where an hour of time online costs the equivalent of less than 50 cents in the US (and connections run at much faster speeds). One-third of Chinese netizens use a public computer regularly to go online.

Between the heightened mobility and demographic make-up of China's Netpop-ulation, many Western companies are already outside their comfort zone, treading into unfamiliar territory. (Sorry, but those age-old tactics to reach midwest soccer moms or suburban boomers do not apply.)

But wait. There's more...

Third, and most important, are the social media behaviors that feed and fuel the consumer lifestyle in China. Ninety-two percent of Chinese netizens use social media -- forums/bulletin boards, chats, blogs, micro-blogs, etc. These social media "conversations" are an integral part of the Chinese netizen experience. Compared to Americans, Chinese netizens are:

• Twice as likely to post to a forum
• Twice as likely to chat in a chat room
• Three times more likely to micro-blog
• Three times more likely to publish a blog
• Four times more likely to videoconference

Social media also has a direct impact on purchase decisions:

• Social media are twice as likely to influence purchase decisions in China as the US
• Consumer ratings and reviews rank second (behind search engines) as the sources that help buyers learn about new companies, brands or products

These findings show that Chinese netizens like to share information broadly and openly. Western companies must work harder to be a part of the conversation as the online population explodes and Chinese consumers look to each other when deciding which brands, products and services to buy. While Chinese consumers generally admire Western brands, this advantage may decline as Chinese brands move to community-based marketing tactics, built around Web 2.0 channels, displacing traditional media advertising tactics.

And herein lays the greatest challenge to Western marketers: Can a non-Chinese company or brand be embraced, deeply and authentically, by Chinese netizen-consumers? Is this possible when purchase decisions are so heavily influenced by an infinitesimal ocean of online and mobile exchanges? True, social media is infinitely porous and potentially penetrable. But, when Chinese netizens are themselves the media and the message, can Western companies engage successfully, in a way that is genuine and competitive against homegrown brands? Time will tell.

In the meantime, companies need to discard age-old approaches to advertising and marketing. Mind-share is not only about a message, a medium, or even a market anymore. It is about making sure your brand is a part of the community and the conversation. Think of it this way…

In the 21st century:

• The consumer is a friend
• The market is a tribe
• The message is a dialog
• The medium is anywhere and everywhere consumers live online

This thinking applies to the United States too, but the intensity of social media use, and the inherent challenges of penetrating the Sino-social-ecosystem loom large, making the need to develop new approaches in China all the more acute.

The sheer size of China's internet population forces companies who would otherwise bow-out to stay in the game. And stay they must, but with a required attitude of openness to reaching China's expansive online population from the inside-out. The lesson is clear: Approach marketing in China from the inside-out, or risk being left outside the conversation.

Findings are based on an online survey (n=4269) of broadband-enabled consumers representative of the Chinese internet population by age and gender. Special thanks to Grace Yao, research analyst at Netpop Research, for her contributions to this article. Findings are available in a report titled "The Great Social Wall of China," available online at NetpopResearch.com. 

Cate Riegner is vice-president, research director and co-founder of Netpop Research.