iPhone in China

While Apple's iPhone is selling well across the globe, China has emerged as its fastest growing market for the device. It’s unbelievable how crazy Chinese are about iPhones and most of my friends now are using iPhones in the event that Apple officially begin selling the iPhone in mainland China since late 2009 through just two Apple stores in Beijing and Shanghai, along with its online stores.

Apple’s success in China is intimately related to its appealing features and user interface. IPhones are targeting high-end market and a large proportion of iPhone users are white-collar since the price of iPhon is a bit luxury for low-income workers. The price of an iPhone 4 is 4999 yuan without a contract and the average salary in Shanghai was around 5,300 yuan a month last year. 

Despite of the admiration Apple achieved in Chinese market, it at least still has got to give much concern to a number of questions as below:

1)    Will Chinese customers always be happy and patient to wait several months after Apple launched products in US and Europe?

2)    How to deal with problem that iPhones were quickly sold out with shortages of inventories?

3)    How to compete with scalpers due to the release delay in China?

4)    How to ensure the quality of customer service given the small number of official Apple stores?

Based on my recent research, I think it’s not fair to conclude that Walmart was a completely loser in China market, especially after November 2006 when the company named Ed Chan the new president and CEO of Walmart China. Before joining Walmart, Ed, a Hong Kong Chinese, used to work at Dairy Farm Group, where he was the regional director for North Asia and director of Dairy Farm Management Services Limited. Since taking office, Ed emphasized the materiality for Walmart to adapt to China and react to market nimbly. Thanks to years of efforts coming from Ed and all Walmart’s Chinese employees, Walmart China eventually ended loss and achieved a profit in 2008, 12 years after Walmart’s entry into China.

Ed slimed Walmart’s organizational structure by shifting a part of employees including store managers to new opened Walmart supermarkets to optimize human resources and save extra labor expenditures. Besides, Walmart commits itself to build positive and lasting relationship with local distributors and negotiate with them to get items with low prices. Speaking of luring customers, Walmart keeps an eye on local market’s specialty to afford commodities that cater to localized favor such as ice-sugar gourd in Beijing Walmart markets. In the meanwhile, in order to provide offerings with quality, safety and hygiene, Walmart hold the first "agriculture super-docking" Forum. At the meeting, Wal-Mart China and the Ministry of Commerce and the Ministry of Agriculture signed a "total of promoting" agricultural super-docking, "a memorandum of cooperation" and announced a Wal-Mart "agricultural super-docking" project, three new projects. The "agricultural super-docking," mainly Wal-Mart's direct procurement of agricultural products carried out in an attempt to help farmers to improve market adaptability, encourage and guide the standardization and large-scale production, to guide their production to promote environmental protection, not only to promote the industrial chain, optimization, to improve food safety standards, but also for farmers to increase incomes and ultimately the environment, customers, farmers and the local economy-win situation. You could get more details regarding to this program in the video attached and the article by clicking the links as below.

http://www.xmbtd.com/news/news13_en.html

Walt Disney in China (Part 2)

Although Hong Kong Disneyland continued to fare poorly, Walt Disney Co. is still excited to in the near future around 2016  achieve Shanghai Disney Resort, its first Disney resort in mainland China, over a decade of negotiation with Chinese government. Shanghai, one of the world's most vibrant cities will attract millions of consumers all around the world and make Disney a world-class family vacation destination. In total, building the resort is expected to cost more than four billion dollars, which will be split between the Walt Disney Company and its China partners, Shanghai Shendi Group Co. Ltd. The project’s profits will be divided among those proportionally. When it opens, Disney says the park will also have two themed hotels, a large retail, dining and entertainment venue, as well as recreational facilities, a lake and plenty of parking. The resort will be “both authentically Disney and distinctly Chinese”. Probably this new upcoming theme park could give Disney a second chance to make a fortune in China market.

Walt Disney in China (Part1)

The Disney case that professor had been presenting in class triggered my interest to look into this world largest media conglomerate’s story in China. As everyone knows that Hong Kong Disney land is Disney’s first move to test the water in Chinese market and data display that Disney’s performance is far from resounding: Disney's annual visitors in Hong Kong are still about 25% below original targets set at the park's opening. In its first year, Disney's Hong Kong Park attracted 5.2 million people, below its goal of 5.6 million. Visitor numbers fell 20% in the second year to just 4 million, and grew to 4.5 million visitors in the 2007-2008 fiscal years, still far below the numbers it hoped to draw. We have pointed out several reasons leading to Disney’s failure in China and I’d like to supplement some other factors that were outlined in a TV interview I came across, with Zhizhong Zhang, the managing director of Disney China, who has many years of excellent working experience in FMCG industry.

Zhang stated two insurmountable barriers Disney had to go through in China market: one is the Chinese government strictly confines the number of importing foreign movies, 20 films in each year. Another block is Disney Channel still couldn’t be allowed to land on China. In order to break up these limitations, Zhang and his colleagues were falling over themselves to lobby Chinese government time after time.

Simultaneously, Disney China focused on cultivating its product line: for example, Zhang demanded his manufacturers to control and manage producing process and ensure to provide customers products, like clothes, shoes and toys with superior quality. He firmly believed that customers are willing to purchase clothes in a Disney store no matter how familiar they are with Disney stories as long as they could be offered good products. Moreover, on the basis of the boom of China's English education industry, Zhang creatively initiated a Disney English teaching program , which is the first and also the sole trial within Disney on the worldwide. What’ more, Disney China was seeking positive cooperation with local media companies. For instance, Disney along with China Film Group Corporation filmed a movie called “The Secret of the Magic Gourd (Bao hu lu de mi mi)”. Another instance is Disney took advantage of the marketing weakness of Chinese local cartoon production companies and persuaded them to let Disney take charge of their R&D and sales of derivatives. One of most well-known animated cartoons amongst these for Chinese audiences is “Happy Goat and Big Big Wolf”.





Weibo, a new oppportunity for marketing in China

Weibo, a Chinese microblogging site, launched by SINA Corporation in August 2009, now has more than 140 million users. Now Weibo is so amazingly popular in China and even “Do you have a weibo?” has become a quintessential question that Chinese like to ask each other when they meet. According to the latest research, Sina Weibo has 56.5% of the microblogging market based on active users and 86.6% based on browsing time over competitors such as Tencent and Baidu. Sina has said it has more than 60,000 verified accounts, consisting of celebrities, sports stars and other VIPs. The top 100 users now have over 180 million followers. Furthermore, one fact that has a significant impact on business is that Sina said that there are more than 5,000 companies and 2,700 media organizations in China using Sina Weibo currently. From technology perspective, Weibo functionally similar to Twitter and therefore there are a few advantages for online marketing:

1)    Embedded pictures and video attachments. Companies could choose to register their own Weibo and then market their brands by presenting pictures and videos. Compared to traditional media channels, like newspaper, TV, radio, billboard, etc, which all had to confront geographic barriers in some extent, Weibo provides great opportunities for online marketing. Below is a screen shot of KFC’s Weibo, introducing their new summer breakfast meals.

2)    New feature of “poll”. Users can specify subject, options, single or multiple choice, expire date and time to create a poll. Marketers can make use of this tool to better engage its targeted audience. A magazine started a poll for “Cover for August” as below, which let readers could be involved actively in decision making.

3)    Ads Placement. At the right side of Weibo, users sometimes see recommended business account or events. Also, there is a flash banner under the entry box for hot topics and featured news but might open to advertisers in the future.