Marketing in China : a twenty year evolution

Since 1996, China has evolved dramatically in every sector by retaining her famous cultural dimensions.

The former China

Twenty years ago, the Chinese marketing area was different then today’s. First of all media prices were cheap. The communications industry was not over regulated and censored by the Chinese gouvernment.

At that time, it was almost impossible to set up a business without a local joint venture partner.

Moreover, most of the advertisements were adapted from overseas and Chinese marketing was not really developed.

A growing middle class

The Chinese were focused on making fast cash as Deng Xiaoping, ex-leader of the Communist Party of China, proclaimed that « To get rich is glorious ».

Since then, we observed an emergence of the Chinese middle class counting now almost 250 million persons.

The Chinese are considered as the world’s biggest consumers, from luxury cars to mobile phones. They are particularly attracted by the foreigners brands with retailers more and more implanted in mainland China; such as Zara, H&M and Uniqlo or even more luxurious brands like Louis Vuitton and Chanel.

The importance of digital

With the development of the digital, the Chinese marketing area has seen a lot of transformations. With more than 600 million internet users and 300 million WeChat subscribers, the e-commerce is now expanding.

It is now prominent for agencies to be involved in the digital communication industry. Exchanges on Chinese internet platforms like Weibo or Baidu shows the critical importance to be active on social media.

More on : Why you should be active on Chinese social media? Because Chinese are connected!

The changes in the communication industry

Media costs have exploded since twenty years ago, due to an excessive demand and maybe a monopolistic market of media sales. It is difficult for new and little companies to afford those prices. 

Furthermore, advertising was not seen as a real responsible career by the locals, it leads to many young talented Chinese who abandon the industry.

Whereas Chinese are now in competition with « Western » agencies. Not even a few local advertising agencies are real competitors to the western’s one ; even though they are more than 100.000 local agencies.

What about the local market ?

However, China advertising market is seen as the second larger in the world after the U.S.A. The local potential is resting on Chinese agencies, but the advertising market is not as large as the numbers shows. Even though the ad spends are above 140 billion $, those numbers are inflated by the discounts and the agency fees.

China’s advertising market is not as developed as the Western’s one. It can explain the prevalence of foreigner agencies and brands well implanted in China.

The advertising market is now fundamentally based on digital , it’s the reason why every company who would like to promote themselves should be active on the cyber space.

Olivier VEROT