As China makes its way to becoming the world's biggest economy, overtaking the US in 2028, more and more international brands are heading east. However, having access to a marketplace of over a billion people does sound appealing; it's not an easy job for foreign brands to make it in China.
To start with, it’s not a cheap exercise.
Some may still have the misconception that "China equals Cheap" or that all they need to do is copy their international marketing strategy for China, and everything is good to go. If that's what you are thinking, you will likely get disappointed.
Europe's digital advertising market was valued at $84.02 billion in 2021, while China represented 103.3 billion in 2021.
According to Jing Daily, as of May 2018, an average yearly marketing budget for brands of different sizes would look something like this:
- Very small: 25,000 USD – 100,000 USD
- Small: 100,000 – 300,000 USD
- Medium: 300,000 – 1,000,000 USD
- Large: 1,000,000 USD or above
For multinational brands, yearly budgets are typically around 100,000 USD on the low end and over 1,000,000 USD on the high end, covering full digital scopes including SEM, PR, Website, Social and Media. The cost of launching a social media campaign will be from 15,000 USD. For a holiday promotion, depending on the product category and platform, the budget could go between 10,000 and 40,000 USD. A top-tier influencer can charge up to 50,000 USD or more for a post.
Maybe you feel confused, even shocked, after learning about the high marketing budget, and start thinking of putting your China plan on hold. Well, don't do that yet! Introducing your brand to a 1 billion market is not a piece of cake. But having a clear idea of what you are dealing with, a China-specific strategy and a correct budget allocation for your strategy will get you there!
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What's the mystery behind the high marketing budget in China?
For one thing, China is a huge country with a different culture and language than the west. The brand personality and key messaging you use globally may not be relevant to the Chinese.
The number one rule for brands to stamp in their mind is - you need to go local.
Going local isn't just translating your content into Chinese. Your marketing in China should be independent of your global strategy. Applying western standards will not work when advertising to the Chinese market. Many brands, even top international brands, come and go in China as they fail to adapt to the local market.
Even some of the most popular brands may find it difficult to establish themselves in China, especially when they try to implement a global strategy, without customizing their products and communicating to the specificities of the Chinese market.
Also, a one-size-fits-all model will not work in China as it is far too large and complex.
China is a huge country, comprised of many individual markets, different and unique consumer types.
Trends and customers' needs can differ depending on the region. Fashion brand ASOS dramatically failed in 2016 when it tried to sell one seasonal range in China while it has several different climate zones.
Your target audience may look completely different in different tiers of cities. For a coffee brand, your target audience may be a mid-level manager in a tier 1 city and a 22-year-old graduate on their first job in a tier 2&3 city.
Let’s not forget Chinese social networking universe is hugely sophisticated – and often far ahead of Western counterpart platforms! China has not only five times more platforms but also many more advanced features unknown to people living outside China.
The cultural difference, the vast, diverse market, and the unique and sophisticated social media landscape all add up to the digital marketing budget.
Reference: Unsplash.com
Your marketing in China can be played independently of your global strategy, and it should be highly localized and individualized.
Your marketing budget is based on your brand reputation in China and your requirement. For some, a social media and influencer strategy may work exceptionally well. Mass advertising may be more effective for less-known newcomers who want a much greater reach. Brands can also be strategic in the budget allocation based on the specific target audience group they look to reach.
Whether you are a brand-new business looking for a kick start in China or an established firm needing a fresh perspective, we will provide insights that allow you to reach your target market with the highest possible ROI. No matter what your needs are, Duhno has the marketing solution to help your business succeed.
Did you read our white paper regarding how to define your e-commerce strategy for China ?