A China Approach to Targeted Mobile Marketing

by Net Future Institute on April 24, 2012

There’s a unique form of mobile targeting going on in China.

Last week I had the opportunity to share some mobile insights with the general managers, directors and heads of many luxury brands in China, such as Chanel, Land Rover, Mercedes-Benz, Audi, Estee Lauder, Swatch Group, Bvlgari and Hermes.

As in other markets, the brand leaders were looking for what they should be doing in mobile and were highly interested in any mobile innovation occurring in the West. Their main focus is on viable mobile business models, ranging from advertising to commerce and anything in between.

Most in the audience said they have a mobile strategy, many for more than a year. Individually, almost half of them said they carried two mobile phones, which I also regularly find common in executive audiences in the U.S. and other countries.

As background, the mobile market in China is somewhat different than the U.S. The leading phones sold in China are from Nokia and Samsung while the U.S. market is led by HTC and Apple, according to Strategy Analytics.

Perhaps the biggest personal usage difference is the actual cost of the phones. For example, unlike the U.S. where carriers subsidize the cost of phones, people in China pay the entire cost themselves.

I visited the major Shanghai Apple store, which was jammed with people on each of the two floors, to check pricing. An iPhone 4S, depending on memory, costs either $790 or $932 in U.S. dollars. And people were lined up to buy them. Lots of people.

This also partly explains why everyone has a passcode lock on the opening screens of their phones, since they are reportedly frequent targets of theft due to the value.

The other dynamic is that the I-must-have-an-iPhone phenomenon among certain demographics in China provides a self-defined market.

As one example of a business taking advantage of Apple obsession, the two-year-old mobile lifestyle publication iWeekly is made available as an app for only iPhones and iPads. So while Android leads the operating system market and Nokia and Samsung lead in hardware sales, iWeekly sticks with just Apple.

The choice seems to have worked, since the app has been downloaded 5 million times and is the number one lifestyle category app in China, according to Jane Yu, vice president and general manager of IWeekly, who notes that it is on 20 percent of all iPhones in China.

Other executives in the company told me that marketers easily understand the demographic of all iPhone and iPad owners, since the devices are so expensive. The reasoning goes that since the devices are bought by the most affluent, they must be the prime target for luxury brands.

It will be interesting to watch as more smartphones enter the China market, which last quarter saw 24 million smartphones shipped, more than in the U.S., according to Strategy Analytics, to monitor if targeting only Apple wireless devices continues to be a winning formula.

Another observation is that in some ways, the mobile market in China resembles that of Latin America, where there are 630 million mobile connections while China has a billion. But in both markets, two geographies dominate the market, Brazil and Colombia in Latin America and Beijing and Shanghai in China.

The remaining areas in both countries have less of an affluent target mobile population. This begs the question of how to target within the markets, whether by Apple products only or some other means.

As a personal observation, I found that some things mobile work in China and others don’t.

A rather annoying finding came after Verizon assured me (twice) that my Samsung Galaxy Nexus would be fully functional in China. They then easily sold me the global roaming package, data, texting and all that.

While the phone worked for voice, none of the data features ever worked except over Wi-Fi, which could easily be found. A bit more difficult to find were the passwords protecting all the Wi-Fi locations.

The good news was that my iPhone 4S on AT&T worked flawlessly everywhere, including location-based services.

Twitter and Facebook? Blocked in Shanghai. Every once in a great while, a random Tweet seemed to get through but otherwise no outside social networks worked, other than those locally originated, such as Sina Weibo, the microblogging site the government throttled back for a few days last week.

My trusty Speed-o-Meter app, which I sometimes use to clock the Amtrak Acela at up to 150 MPH, didn’t work on the famous Maglev high-speed train that reaches the airport in minutes at speeds of up to 260 MPH. No GPS could be located, though the app later worked in a car on the way to the same airport.

Price comparison by barcode scanning was a big disappointment, since none of the codes at any of the major stores visited, such as the Gap, could be identified by any of my usually reliable code readers, such as ShopSavvy.

As in other markets, the other observation is that everyone is always using their mobile phone, for talking and texting.

But virtually no one looks at their phone while crossing the streets. As I was repeatedly reminded in Shanghai, there are no rules for driving and vehicles have the right of way, and they take advantage of it.

I can vouch for that.


Chuck Martin is author of The Third Screen; Marketing to Your Customers in a World Gone Mobile, CEO of Mobile Future Institute and Director of the Center for Media Research at MediaPost Communications.



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