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Country Spotlight – China: Navigating the complex digital landscape in a new era of internet crackdowns

In the Country Spotlight series, we focus on how human-led social listening can help businesses gain invaluable market-specific insights into consumer behaviour, cultural nuances and digital trends to identify and connect with local target audiences.

Social media has significantly altered the lifestyles of China’s middle classes, not least with the explosion of e-commerce and online shopping. But for brands looking to enter this market, navigating Chinese social media can be a complicated and daunting task. In this article, we take an in-depth look at the factors that contribute to this perplexing landscape, how they impact brands’ marketing and communication strategies in China and why local market insight is key to overcoming these obstacles.

Reaching Chinese consumers behind the Great Firewall

The state censorship of social media in China is one of the most frustrating aspects for overseas brands accustomed to operating on an open and free internet. This form of censorship restricts what can be posted, shared, discussed or even seen online. It also severely limits how these companies can market their products or services in the Chinese market. with many well-known western companies blocked entirely due to their refusal to comply with censorship requirements.

In essence, the internet in China can be compared to a nationwide intranet. Dubbed “the Great Firewall of China,” it actively cracks down on “inappropriate” online content and activities and blocks out access to global social media platforms, such as Facebook and Twitter. In addition, the Chinese state has control over what keyword searches are allowed on social media, and heavily censors the content published by private individuals. It has an arsenal of official and unofficial tools to reprimand offenders, administered either by law enforcement organisations or the social media platforms themselves. For example, in 2022, WeChat reportedly ordered users to write handwritten letters to apologise for “misappropriate” speech online.[1]

Most importantly, the Chinese government owns “golden shares” in key tech giants such as Alibaba and Tencent – usually 1% share which comes with special rights over certain business decisions.

The Chinese state has control over what keyword searches are allowed on social media, and heavily censors the content published by private individuals.

Past and present developments of Chinese social media 

With this in mind, it’s hard to understand there was a time during the dawn of the internet age when western communication platforms were able to freely operate in China. In the early 2000s, Microsoft’s MSN was estimated to have had a 53% market share of 20 million business and white-collar users in the country. [1] But as China’s government gradually tightened its grip on the internet infrastructure within its borders, the shift became so pervasive that freedom on the internet eventually disappeared completely, with overseas businesses facing stringent regulations driving many to cease their operations in the country. Most notably in the world of social media, the professional networking platform LinkedIn announced its exit from China in 2021.

Another factor that bewilders overseas brands is the presence of social credit scoring in China. A high social credit score entitles an individual to enjoy certain privileges, including but not limited to discounts and preferential treatment by financial services, access to better employment and the ability to travel. Although the scoring mechanism is said to lack transparency, it is believed to be a motive for individuals to post more positive narratives about themselves online – projecting images of perfectly healthy and balanced lives in order to spread “zheng neng liang” or “positive energy” which authorities approve of. Crucially, this can translate into challenges for brands looking to gauge real unmet needs by potential customers.

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Inside and Outside the Great Firewall of China

The Chinese social media landscape is divided on either side of the Great Firewall of China, which is further complicated by whether these Chinese-speaking users actually live within or outside China in reality. 

Inside China 

  • Domestic users logging into Chinese platforms

Leaving aside official and unofficial channels of propaganda, social media content from authentic users inside China tends to revolve around their ordinary lives: shopping, peer advice on life problems and personal hobbies. Anonymous usernames and ownership of multiple accounts (to segregate work, family and personal hobbies) are common, though real-life identities can be traced by official authorities in various ways.

The most popular platforms are RED (also known as Xiaohongshu), WeChat, Weibo, Zhihu and Douyin (TikTok). In particular, RED boasts an engaged and authentic user base. Its success is linked to its policy of keeping the number of advertisements at a reasonable level, without causing user backlash.[6] Similarly, WeChat has remained a leading platform due to its policy of maintaining a clean interface that does not bombard users with ads and alerts.[7]

  • Overseas users logging into Chinese platforms

Interestingly, emigrants of the Chinese diaspora and Chinese students studying abroad also access domestic platforms – some out of habit, others with an eye on reselling overseas brand products on a peer-to-peer basis, called “daigou” in Chinese. In a sense, these overseas Chinese users are the pioneers in educating domestic Chinese users about overseas brands – especially the more niche ones that are little known outside their home markets.

  • Stealth marketing and cross-border e-commerce

Another key characteristic of the domestic social media landscape is stealth marketing. Well-developed infrastructure for e-commerce and last-mile logistics in China not only enable consumers to shop online with little friction, but they have also enabled the birth of a massive network of entrepreneurs selling various goods online, taking a spread as middlemen. To stand out from an overcrowded market, stealth marketing in the form of “word of mouth” posts often compete with official brand marketing to capture consumer attention.

Outside China

There are broadly two Chinese-speaking user groups who are active on overseas social media platforms:

  • Domestic users logging into overseas platforms

Firstly, there are residents in China who circumvent the Great Firewall with the help of VPNs, allowing them to actively post on overseas social media platforms. Within this group, there are two main fractions: political dissidents looking to engage with a global audience, or pro-China nationalists (“keyboard warriors” or “wumao”) spreading propaganda.

  • Overseas users logging into overseas platforms

Secondly, there are Chinese-speaking users living outside of China accessing global social media platforms on the open internet. Topics tend to focus on ordinary lives and shopping tips in places with large Chinese emigrant populations (ex. Vancouver, Toronto, California) or university towns.

  • The accelerating social divide between domestic and overseas users

The challenge for brands is that due to various domestic uncertainties, well-heeled Chinese families are increasingly establishing their permanent place of residence in foreign countries. Therefore, a cross-border marketing strategy is increasingly important to target this affluent and globally mobile subset of consumers.

Credibility claim driving geo-spoofing habits

This divide between domestic and overseas Chinese-speaking users came to light in 2022, when Weibo began to disclose the IP geolocation of the user to combat fraud and bad behaviour. As part of this measure, it was revealed that many users pretended to live overseas but actually resided in China, while others actually lived overseas but pretended to reside in China. Aside from side-stepping censorship-driven crackdowns, another common driver behind the so-called geo-spoofing is driven by aspiring e-commerce players. Promoting overseas brands, typically as a side gig, these users claim to reside in the home market of such overseas brands in the hope to get more credibility as to the authenticity of their goods.

Weibo’s disclosure of IP locations revealed the common use of geo-spoofing.

Pivoting from Human Influencers to Generative AI

Having surveyed the complexities of the user base, we now turn to the marketing strategies of brands. In China, social media hype for brands is traditionally heavily reliant on product endorsement from influencers. There are three broad categories of influencers:

  • Celebrities: This group consists of the hottest stars of the day, as well as those who might be past the peak of their careers, who are looking to pivot to live-streaming e-commerce. In particular, clothing items in which current celebrities appear onscreen and off-stage are a significant publicity factor for fashion brands.
  • Native live-streamers: These tend to start their careers in the public spotlight as live-streamers from the very beginning. Some owe their popularity to the generous sponsorship of e-commerce platforms and brands, which enable them to offer steep discounts to their viewers during live-stream sessions. [11] Others have built a large following by catering to unique niches, thereby appealing to specific demographics or people with distinct hobbies.
  • Professionals: This group consists of influencers with specialised knowledge, such as medical doctors. Boasting millions of followers, their product endorsements are valued by consumers. There is a well-developed ecosystem in China to source collaborations with these professional influencers, with one local agency said to manage the social accounts of more than 20,000 medical doctors. 

Stricter regulation impact brand endorsements and influencer marketing 

However, there are currently headwinds facing the first two categories of influencers. In 2022, in the name of boosting socialist values and traditional virtues, China began to bar celebrities from endorsing brands. The bar covered mainly health-related merchandise – health foods, healthcare and medical equipment – as well as private tutoring services and tobacco products. The move was welcomed by the National Medical Products Administration, China’s drug approval agency. As a spillover side effect, it also sent a chill to other consumer goods categories – such as fashion, beauty and luxury. Learning to navigate in this market environment where official channels simultaneously give contradictory directives – to kickstart consumption to fuel post-Covid recovery on the one hand, while also frowning on deviations from “socialist values” on the other hand – will increasingly be a struggle for brands.

The downfall of prominent live-streaming influencers

When it comes to potential influencer marketing pitfalls to avoid, it doesn’t end there. In 2022, China’s most popular live-streamer Austin Li Jiaqi (also known as “Lipstick King”), who boasted 64 million followers, met his downfall after an ill-judged decision to feature an ice cream cake shaped like a tank, just a day before the anniversary of the Tiananmen crackdown in 1989. Earlier in 2022, China’s live-stream queen Viya was caught in a tax evasion scandal that led to the forced shutdown of her streaming accounts. Their fall from grace and official bans from social media dismayed the live-streaming sector as a whole, with brands left guessing where the line was crossed and how to vet live-streamers to represent their brands. 

The live-streaming business model

Let’s take a closer look at the live-streaming e-commerce model. A rendition of new social media combined with old-school infomercials, live stream retail grew into an estimated $100 billion industry in China during the pandemic. A combination of steep time-limited discounts and a seamless interface to make purchases while watching the live stream video propelled the growth of this market.

Live stream retail grew into an estimated $100 billion industry in China during the pandemic.

In spite of efforts by TikTok to export the live-streaming business model to other markets, it has not been met with great success. This is due partly to the difficulties of recreating the frictionless shopping and delivery experience known to Chinese consumers back home, but also to the differences in culture and consumer priorities in other countries.

Moreover, the recent advent of Generative AI will lead to a greater presence of virtual influencers, as in digital characters created using computer graphics software. According to one estimate, this new segment is predicted to jump sevenfold from Rmb6.2bn ($870mn) in 2021 to Rmb48bn in 2025. For brands, computer-generated influencers are considered a safer, less expensive and more controllable option. But whether Chinese consumers are willing to abandon their favourite influencer for a virtual avatar remains to be seen.

Convosphere’s solutions 

There are a number of cultural differences and unique features of the Chinese market that pose real challenges for western brands. Despite these, it is easy to see why China, with its fast-expanding economy and rising middle-class population, appeals to foreign companies.

To gain a foothold in China, brands need to develop a bullet-proof strategy, sensitive to local cultural codes and with a constant eye on regulatory changes, to keep them nimble enough to react to fluid market conditions.

With expert knowledge on social media regulation, our analysts work closely with local technology vendors and data providers to ensure best data practices. They also stay informed about local influencer marketing laws, to support our clients’ successful collaboration with KOLs, KOIs and other influencers. This, in combination with our in-market presence and native familiarity with China, make us ideally placed to support western brands, at whatever point they are in their market-entry process.

Speak to us today

Convosphere has unique capabilities to: 

  •       Screen out stealth marketing to get authentic insights from actual consumers.
  •       Track the contribution of individual influencers and posts to access their impact on brand campaigns.
  •       Analyse global data from multiple countries generated by affluent Chinese-speaking audiences.
  •       Calibrate excessively positive narratives on social media by users looking to boast their social credit scoring.
  •       Identify euphemistic and roundabout ways in which Chinese consumers express their unmet needs.

Convosphere also has capabilities to analyse and track product trends and influencer collaborations in markets where Chinese consumers often borrow inspiration from – such as the convergence of K-Pop and luxury fashion.

Contact us hear to speak to a member of our team today.