History suggests that foreign brands lack the local understanding to effectively target Chinese consumers online.
Companies like Google, eBay and Groupon all entered the Chinese market hoping to translate their success from the U.S., only to ultimately meet with failure in the Middle Kingdom.
Rather than try to introduce Chinese citizens to online services from the West, successful multinationals like Starbucks, Diageo and IKEA have all worked within the existing frameworks of China’s online space to engage potential customers.
By making use of local microblogging platforms, popular online video sites, and lifestyle social networks, these brands demonstrate that the real winners of online in China are not internet companies themselves.
Instead, they are brand marketers who understand where their customers spend time online, and come up with creative ways to engage them in an environment they are already comfortable with.
Starbucks: Microblogging the Chinese Way
In October 2011, Starbucks opened its 500th store in mainland China, with plans to reach 1500 stores in the country by 2015. To fuel its ambitious growth plans, Starbucks partnered with China’s leading mobile advertiser Guohe Ad, tapping into its local expertise for a Christmas 2011 campaign.
Guohe created a social app on the Chinese version of Twitter, called Sina Weibo, that allowed users to “check in” when they visited select Starbucks locations in China. Starbucks customers who used the app received a free drink size upgrade.
The campaign was so successful that Starbucks received 40,000 daily click-throughs to the microsite and achieved the number one ranking on the popular Chinese application platform Weico.
By partnering with a local firm that understands the marketplace for mobile and microblogging, Starbucks built up a tremendous amount of buzz among its Chinese customers.
Diageo: Chinese branded entertainment
Spirit brand Diageo is another international company that tapped into local expertise to target Chinese consumers online.
Diageo faced tough competition from Pernod Ricard, which had already established itself in China by appealing to the Chinese preference for Chivas and green tea, a popular drink at Chinese bars and karaoke clubs.
Diageo partnered with acclaimed Chinese director Jia Zhangke to produce a series of brief documentaries entitled the Yulu Project.
The documentaries feature 12 individuals from different backgrounds who all share one thing in common: a willingness to do whatever it takes to achieve their dream.
One example is Zhou Yunpeng, a blind folk singer and poet who recounts the challenges he faces on his path to performing professionally. Xiao Peng has a different dream. He seeks to create a successful company after returning to China from his studies overseas.
The campaign tapped into the fact that, according to the 2011 Chinese Market and Media Survey (CMMS), Chinese netizens between the ages of 15 and 34 spend an average of over two hours per day watching online video.
Diageo chose not to make the video segments advertisements, but rather inspirational branded entertainment, only flashing the Johnnie Walker logo briefly at the end of each segment.
According to Diageo, the campaign generated 20 million video views over the course of eight weeks. Given the success of its first campaign, Diageo plans to run a second Yulu campaign later in 2012.
IKEA: Engaging customers on their turf
In China, marketers understand they need to have a presence on social media, but the problem is that they do not always know the best sites to invest in (the Chinese social media landscape is more fragmented than in the West, where only a few sites dominate).
Like Starbucks and Diageo, Sweden’s IKEA did an excellent job leveraging a Chinese social media site to engage customers. IKEA created a profile on Douban, a popular Chinese social networking site that allows users to recommend, comment on and compare their favourite books, films and music.
In September 2011 IKEA launched an event on its profile page called “The Dream Home in Films.” Users were encouraged to upload screenshots of their favourite home furnishing styles from famous films and write a description of the scenes. The most thoughtful entrants won IKEA products.
IKEA’s online campaign provided potential Chinese customers with an outlet for self-expression, giving them a positive impression of the IKEA brand in an online environment they were already familiar with.
Go local
The examples of Starbucks, Diageo and IKEA demonstrate that the true Western champions in China’s online space are not those who simply transplant and translate their existing model, but those who play within the existing frameworks of China’s internet.
Companies need to build internal local expertise or partner with domestic firms and social media sites to win the hearts and wallets of China’s 500+ million netizens.





Yes, but almost in every case, every “western” IT technology gets smashed by local IT companies… local Chinese companies are just too innovative and agile for the western companies… the copy and then “unleash” innovation to easily overtake…
Do you think it’s really innovation or more likely that it’s manpower? Development is many times more expensive in the West, making new large scale development prohibitively expensive.
Going Local: The Real Winners in China’s Online Space http://t.co/xexMQiua
Going Local: The Real Winners in China’s Online Space http://t.co/lz1O4AAs
#sparksheet Going Local: The Real Winners in China’s Online Space http://t.co/0zKKPpaW
#SMspark Going Local: The Real Winners in China’s Online Space http://t.co/JiImzXYq #SM24hrs
Going Local: The Real Winners in China’s Online Space http://t.co/vwvXkab3
How can Western brands engage China’s 500 million online consumers? http://t.co/mJXNfE0s
My first contribution to @Sparksheet on adapting global digital marketing strategy for a local Chinese market http://t.co/2Y2JJf3q
My first contribution to @Sparksheet on adapting global digital marketing strategy for a local Chinese market http://t.co/2Y2JJf3q
How foreign brands use Chinese social media
http://t.co/osBSAYFi
My first contribution to @Sparksheet on adapting global digital marketing strategy for a local Chinese market http://t.co/2Y2JJf3q
#China: Going Local: The Real Winners in China’s Online Space http://t.co/kbnlkMqO via @joelbackaler
Going Local: The Real Winners in China’s Online Space | Sparksheet http://t.co/bMxbSETz
Going Local: The Real Winners in China’s Online Space http://t.co/68EQfY5l via @Sparksheet
Going Local: The Real Winners in China’s Online Space | Sparksheet: http://t.co/NQx2ycTD by Joel Backaler @latamasiabrands
Going Local: The Real Winners in China’s Online Space | Sparksheet: http://t.co/7VtZqumz. @latamasiabrands