A frequently asked question from my international friends is: Is there a Great Firewall blocking overseas projects from entering China? I can say for sure — Not at all! And I would tell them that the key behind overseas products such as iPhone and Coca-Cola successfully gaining massive market share in China is their attention to localized marketing. The Chinese government has been supportive towards overseas companies because they could drive economic development. The Chinese blockchain market, in particular, welcomes overseas projects.
The challenge of China market entry has become an increasingly important one for foreign companies of all shapes and sizes. With the country poised to take the lead in blockchain after it was given strong backing by the country’s leader President Xi Jinping, and destined to remain an engine of global blockchain market growth for the next decade, understanding how to enter such a large and complex market has become critical to most companies in the blockchain sphere.
In the 2019 Global Blockchain Invention Patent Ranking report from IPRDaily and incoPat, there are 22,000 blockchain patents in the world, and China accounts for 63%, which shows leading dominance. The importance of blockchain continues to rise in China: more than 30 provinces, cities and regions have announced policies to invest and develop blockchain technology; 38 blockchain industrial parks have been built in various regions; by the end of 2019, there are nearly 28,000 Chinese blockchain companies. The user traffic of a second-tier exchange/media in China is greater than that of the first-tier overseas markets. Undoubtedly, China is a market that must be broken into, given its high purchasing power, user volume, and increasingly open business environment.
There are tremendous cultural and strategic differences between China and overseas markets. Overseas projects attach great importance to technology. In China, the volume is greater than the brand, and the brand is greater than the product. With a large number of users, even though the project has poor branding and low technical capabilities, it will be recognized by the Chinese market. For example, Pinduoduo went public and its profitability has surpassed that of Alibaba. I will emphasize that again, in China, the brand is bigger than the product. To successfully break into the Chinese market, the correct ratio of initial spending is — 60-80% in marketing/branding, 20-40% in product development.
Tips for entering the Chinese Market
The Chinese market, especially the Chinese blockchain market, is indeed a riddle for overseas projects. I will explain the mystery in Chinese marketing as follows, let’s dive into it:
1. WeChat: WeChat is China’s largest social media platform. WeChat is also used as a means of communication within government agencies. Compared with Twitter’s 500 million users, WeChat has 1.1 billion users. According to the survey, WeChat accounts for 70% of all online and social activities in China. Therefore, WeChat is not chosen by us marketers, but it is a platform that must be leveraged.
2. WeChat Community: WeChat groups are the key platform of online activities and communication for Chinese people, it is where every project need to cover the most in their marketing efforts. Compared to LinkedIn posts, WeChat Moments are entirely private, so it has the chief advantage of trust, as if an old friend recommends a product to you, so the marketing on WeChat essentially builds credibility for your project.
3. WeChat AMA: At the moment, even regional governments in China are selling goods online via AMA to promote economic recovery. This approach is also used in business, which is the most effective way of marketing any type of products or services.
4. Media Coverage: The strategic planning of media coverage is more important than the execution of press releases and newsletters. My advice to projects is to use a strategic approach to maximize their PR effect. Media coverage can only be used as a part of the market strategy, not everything. This is why when overseas projects think they just need to pay for the expensive press releases from Chinese top-tier media and then they can become viral, but they end up finding poor or nearly no results.
5. Exchanges Listing: China’s crypto exchanges are large in volume, it’s a must for projects serious about breaking into the Chinese market, however their listing fees seems to be sky high. My advice to overseas projects is to work with a connected and resourceful intermediary for exchange listings because they can leverage their relationships to get you the discounted listing fee.
6. Influencer (KOL) Representation: In the Chinese blockchain market, KOL plays a pivotal role but only by finding the right KOLs can it get twice the result with half the effort. The correct approach is to hire a large number of community-level KOLs and let them spread the words and make your projects known in their communities. In China, large-sale coverage is more effective than the popularity of a famous KOL.
7. Offline Meetups & Conferences: A guiding principle in Chinese society is ‘关系Guanxi’ – personal relationship building with people from whom one can expect (and who expect in return) special favours and services. The core of the market is the relationships between people, not how great your project is. Offline meetups and conferences are the best place to build a foundation of trust between people. When seeking collaborations and partnerships, Chinese projects give priority to their friends.
At the end of this article, I hope that I have provided some useful insights into the Chinese market and the unique business culture. I hope this article has helped you better understand what is happening now in China and I’d of course welcome you reaching out to me and providing me with your thoughts and suggestions in the comments below.