Why digital marketing in China is different
China has established a completely different digital ecosystem to the West. Sinorbis software helps bridge that gap. Company founder Nicolas Chu is a Professor of Practice at UNSW Business School. He spoke to Julian Lorkin for BusinessThink.
Nicolas Chu: Digital marketing in China is difficult. Sinorbis helps Western companies build their foundations in China.
China is very difficult for a few reasons: the lack of understanding; high barriers to entry; and the lack of control. The high barriers to entry are there mainly because of the great firewall. This regulation in China has been filtering out for years channels that we have been leveraging to sell our products online, such as Google, Facebook and Twitter, but it has also feathered the emergence of a completely different online ecosystem.
You don’t have Google, but you have Baidu, Sogou, 360 and Shenma. You don’t have Facebook, Twitter; you have WeChat. Everything that we have been using for years are either not accessible or not used in China.
BusinessThink: It sounds as if the web's going to be split between one in the West and one in China?
Chu: I think they will diverge. That’s my personal opinion. You know, for the past 25 years we have been evolving in an internet led by the US, the one that I grew up in. The next 10 years will see the emergence of this different ecosystem, the Chinese internet. And I think those two will remain separate.
BusinessThink: Doesn’t this go against what we were told when the web was first developed, that it would be global, and bring the globe together? Now we have two internets developing?
Chu: Yes, in some ways. But I also think that it already happens in the internet that we have been evolving to. Everything is going through Google, Amazon, Facebook already, so there has been already a certain level of centralisation in the West. But the big difference is obviously the free internet, you know. The internet in China is extremely regulated, the censorship is very high, and that’s definitely a big difference.
They have to be compliant with the regulation for sure, and not to talk about sensitive topics. But you also have to make sure that from a technology perspective you are adapted and optimised for this ecosystem. Because that’s the main problem – even if you are not in an environment or talking about something that is highly regulated, if your presence hasn’t been optimised for this digital ecosystem it’s most likely that’s not going to be visible.
I mean, it will be very difficult to find it because you won’t be indexed by the search engines in China, but also it will take a lot of time to be loaded. So I always give a lot of examples of websites that we have here, like David Jones’ website, for instance. It takes three minutes to be loaded out of Shanghai, not because the content is blocked but because the website wasn’t built for China.
They have to recreate, and they have to rethink the way they do things, and they have to recreate from scratch the foundations.
BusinessThink: You raised a lot of money when Sinorbis was in beta start-up mode. How did you manage that?
Chu: Warren Buffett was saying that the 19th century was the century of the UK; the 20th for the US; the 21st will be of China. So, when I came in and I explained that despite the fact that it will be the century of China, there’s now no tools to allow us, Western organisations and businesses, to go after this market, it will help.
BusinessThink: It sounds as if we are reaching the end of the era where one person with a bright idea can start up their own global internet company?
Chu: The short answer is I don’t think so. The long answer would be that it has never been easier to set up a company. With limited funds you can actually have access to amazing technology; you have software that will help you to do anything you want. But it has never been that competitive, that much competitive. So, I think it’s all about if you have a good idea to follow what you think, not listen to what people are saying because otherwise you will never do anything. If you really believe that you can make a difference, that you can create meanings, then ultimately it will work.
So, for small companies you have access to much more tools to achieve that. But you’re not the only one and that’s where I think the complexity comes from. It’s because others will have access to the same tools as you do, so it has to go beyond just the tools and the ideas; it’s all about the execution and the team.
Things are moving exponentially. We’re doing things nowadays that we were not able to do last year, and next year there will be things that we thought were not possible.
I think wherever we go it will be all about the convergence of different technologies and we need to be ready for that. A big chunk will be coming from China, but a big chunk will be coming from the internet that we have been used to.