1. DIGITAL CHINA
Yang HUANG
Version 1.0
A proposition for ESCP

2. Main objectives
1. the China E market and how to use social / digital marketing to tap into the
market.
2. the habits and trends of the modern Chinese consumer.
3. the strategy of Baidu, Alibaba and Tencent.
4. the evolution of E commerce in China .
5. the future of China AI and 5G market .
Understand

3. Introduction

4. Introduction
802million people are now actively using the internet
( more than the European Union and the United States
combined. )
788 million people are mobile users
98 percent of the country's user base.

5. What happens
in every 60
seconds in
China ?
Introduction

6. Introduction
World’s largest E commerce market
40% of the value of worldwide e commerce transactions
Mobile payments 11 times with the transaction value of the USA
1/3 world’s unicorns

7. China’s three Internet giants are building a rich
digital ecosystem that is now spreading beyond
them. Baidu, Alibaba, and Tencent,
collectively known as BAT, have been
building dominant positions in the digital world by
taking out inefficient, fragmented, and low-quality
offline markets while driving technical performance
such as computing efficiency to set new world-class
standards.
Introduction

8. Introduction
Chinese businesses such as Baidu, Tencent and Alibaba, some of the world's
largest internet enterprises, have benefited from the way China blocked
international rivals from the domestic market

9. Social Network

10. Social Network

11. Social Network

12. WeChat has been integrated into Chinese people’s daily life
and is reshaping online relationships for users of all ages. As
Tencent’s flagship social media platform, WeChat has the
largest number of users and has been fully integrated into
people’s daily lives. In 2017, 88% users said WeChat
was their most used app. WeChat supports
relationship building between people. It is reported that 33%
of users over 60 spend more than 80% of their mobile data on
WeChat.
Social Network

13. Social Network
Derivative social media : To help platforms maintain/increase user engagement, thus
grow traffic. Derivative social media supports users to obtain more personalized
information that is filtered by the platform, so that they can make better, more informed
decisions.
Core social media: For strengthening interpersonal relationships by helping users to
better understand other users, core social media supports users with two-way
communication. Exchanges frequently cover life experiences or other personal
information, carried out on online platforms for networking, exploring interests, instant
messaging and news feed.

14. Search engine

15. BAIDU
Iin 2000, Li founded Baidu ( www.baidu.com) , the Chinese’s
dominant search engine. The most important thing to understand
about Baidu is that, it actually has the biggest market share of the
Internet-search market in China. Baidu definitely won the
Chinese search engine market, with more than 65% of
market share.
Search engine

16. SOGOU
Launched in 2004, Sogou is the second largest Chinese search
engine with 12.4 % of market share. Sogou (sogou.com) , owned by
internet company Sohu, operates in the search engine market and offers a
large game of Internet value-added services with the Web games. Primary
products such as Sogou Pinyin input, and Sogou Web Directory. Last
August, Sogou announced that its plan to focus on artificial intelligence and
natural language processing for building a next-generation search engine,
in order to become an “innovator and pioneer in artificial intelligence in
China”.
Search engine

17. GOOGLE
The internet giant left China in 2010 following criticism
over its operating a censored search engine there and is
currently banned by the government. But the company is
according to multiple reports working on a version of its
search that would filter out results related to topics like
democracy and human rights deemed sensitive by Beijing.
Search engine

18. ECOMMERCE

19. China’s economy is indeed struggling through a significant
structural transition, and consumption isn’t rising as fast as it did
during the peak boom years. But make no mistake: although the
pace is slower and the course is bumpier, consumption growth is
still tracing a staggering trajectory. China’s consumer economy
is projected to expand by about half, to $6.5 trillion, by
2020—even if annual real GDP growth cools to 5.5%, below the
official target. The incremental growth of $2.3 trillion alone over
the next five years would be comparable to adding a consumer
market 1.3 times larger than that of today’s Germany or UK.
ECOMMERCE

20. China’s online retail market is expected to hit $1.8tn in 2022, buoyed by
local tech titans Alibaba and JD.com, according to a report by Forrester.
The 'E-commerce in China: Trends and Outlook for The Largest eCommerce
Market in The World' report, revealed the Chinese online retail market will be
more than double the size of the US market, which will reach $713bn in 2022 and
10 times larger than Japan at $159bn.
internet giants Alibaba and JD.com continue to dominate the local market,
together accounting for more than 85% of China’s e-commerce market.
However new companies, such Pinduoduo and Xiaohongshu are catching up as
users embrace new social commerce platforms.
More than three-quarters (76%) of all e-commerce in China occurs via
mobile devices and mobile payments remain the most popular choice for online
purchases with 80% of metro Chinese shoppers using Alipay and 66%
using Tencent’s WeChat Pay to pay for a product
ECOMMERCE

21. Alibaba ecosystem
ECOMMERCE

22. n
n’
C
t
ECOMMERCE
Why eBay lost the Chinese market ?
Ebay : In the case of eBay in the US transaction
commissions represent c. 90% of the revenues of the
company (USD 4.7 billion in 2008) with other items such as
hosting fees or advertisements the remaining 10%.
Taobao : Over 80% of Taobao’s c. USD 300 million estimated
2009 revenues came from advertising, mostly ‘pay for
performance’ ads as well as ‘pay for transaction’ and
brand advertisements.

23. Alibaba spent most of its early days serving as a listing site for
thousands of businesses before creating B2C-focused Tmall while
Taobao handles the customer-to-customer (C2C). The e-commerce
titan has now branched into a myriad of ventures (e.g. payment app
Alipay, cloud service Alibaba Cloud, new concept
Hema supermarkets, Augmented Reality) that would be too onerous
to mention in full for the purpose of this article.
JD.com, on the other hand, is more focused on the B2C side of e-
commerce (or e-retailing) and is often labeled as Amazon-like (AMZN)
together with Alibaba's Tmall whereas Taobao is more akin to eBay
(EBAY).
ECOMMERCE

24. Today, Alibaba is the leader of the Chinese
ecommerce market with its two platform
TaoBao and Tmall. But it is not to say they
are unchallenged. Tencent, one of the three
biggest tech company in China intend to use
WeChat (Leader Chinese social network in
China) to compete with a m-commerce
oriented model. Moreover, Tencent bought
15% of JD.com, which is the second
ecommerce website in the country. Now
the question is, when are those giants on
the Chinese web going to try hunting in our
own land? Is Alibaba up to a clash with
Amazon in the west? Only time will tell.
ECOMMERCE

25. Double 11 , single day promotion
ECOMMERCE

26. •Mainland Chinese stores and services are increasingly
centered around mobile pay apps like WeChat Pay and
Alipay.
•Chinese mobile payment volume more than doubled to $5
trillion in 2016, according to Analysis data cited by
Hillhouse Capital.
•Mobile pay is growing so rapidly in mainland China that as
a foreigner, I sometimes found it difficult to complete basic
transactions without it.
•The dominance of mobile transactions lends itself to
greater data collection by the Chinese government.
ECOMMERCE / payment

27. ECOMMERCE / payment

28. Digital Marketing

29. Digital Marketing

30. Tencent has China’s largest social communication
platform, on which ads are positioned to attract users’ Attention.
Tencent has China's largest social communication platform – with
the highest monthly active users (MAUs) and user time spent –
which are used for social communication, but not for making
purchases. So, its ads (i.e. in-feed ads in WeChat Moments or
Qzone) are positioned to attract potential customers’ Attention to a
category, product/ service or brand (i.e. Mercedes Benz, BMW,
Airbnb, McDonalds, and Xiaomi).
Digital Marketing

31. Baidu has China’s largest search platform, on which ads are
positioned to stir users’ Interest & Desire. HavingChina's largest
search platform, Baidu’s users are usually already aware of a
category, product/service or brand (i.e. medical and
healthcare, network services, or financial services),
and search for this category, product/ service or brand's advantages
and benefits to find out which will satisfy their desire. So, its ads (i.e.
top placement ads in result listings after keyword search to attract
traffic to advertisers’ online web pages) are positioned to stir users’
Interest and Desire.
Digital Marketing

32. Alibaba has China’s largest e-commerce platform, on which ads
are positioned to arouse users’ Interest & Desire to the final
purchasing Action. Having China's e-commerce platform,
Alibaba’s users have the strongest intention to purchase a
product (i.e. computer, communication & consumer electronics
[3C], beauty & personal care, maternal & child, apparel &
shoes, or food & beverage), and search for different merchants
to compare their price-performance ratio. So, its ads (i.e. top
placement ads in result listings after keyword search to attract
traffic to advertisers’ online store) are positioned to arouse
users’ Interest and Desire to the final purchasing
action.
Digital Marketing

33. Digital Marketing
Live streaming is at the
intersection of a few
Chinese trends. "Young
Chinese consume a lot of
video compared to the
U.S.," says R.K. Mani,
managing director for
international clients at Carat
China. Plus, "it's live, it's
interactive, it's reality
content, which is very
popular in China. And so it's
really catching people's
attention."

34. It is crucial to realize young people in China, or
millennial, will lead the popularity. On the basis of
the stats issued by Boston Consulting Group (BCG),
millennial at 40 percent of China’s urban
populationbetween the ages of 15 to 70, indicates that
the millennial bracket will perform 69 percent of
consumption by 2021. Millennial will spend most of
their spare time on the phone with diverse activities and
do nothing but shopping, dining, holidaying, car and
home-buying. As long as keep the track with Chinese
major social media platforms, there is no way you
cannot have the target on you mind. Specifically, KOLs
can be found on platforms like WeChat, Weibo, QQ,
Miaopai, Douyin, Inke and more. They are everywhere
and the number is growing. Take Weibo as an example,
the number of influencers with more 100,000
fans increased by 57.3% from 2016 to 2017.
Digital Marketing / KOL

35. In China, Becky Li’s three million social media followers call her the “BuyBuyBuy”
Goddess because her posts on fashion and luxury items have always been
successful in triggering the impulse to buy. That quality has also been much
valued by a wide range of brands including Rebecca Minkoff, Chanel, Dior,
Hermes and, now, the automaker MINI.
The best solution can be adopted is ongoing relationships wherein the brand
worked with the KOL’s content plan, both before and after the key selling moment.
For an instance, Becky Li, a fashion blogger, sold 100 limited edition blue MINI
cars, after having curated various recommendations of blue-colored clothing in
the previous posts.
Digital Marketing / KOL

36. China’s AI and 5G

37. Artificial intelligence (AI) has come to occupy an important
role in Beijing’s ‘Made in China 2025’ blueprint. China
wants to become a global leader in the field by 2030
and now has an edge in terms of academic papers, patents
and both cross-border and global AI funding.
In 2017, China published its “Next Generation Artificial
Intelligence Development Plan”, which laid out plans to
ultimately become the world leader in artificial intelligence,
with a domestic AI industry worth almost US$150
billion. The first step of that plan is to catch up with the
US on AI technology and applications by 2020.
China now dominates AI funding. Last year, 48 per cent
of total equity funding of AI start-ups globally
came from China, compared to 38 per cent funded by
the US, and 13 per cent by the rest of the world. This is a
significant jump from the 11.3 per cent of global funding
China made in 2016.
China’s AI and 5G

38. China’s AI and 5G

39. China’s AI and 5G

40. • Thank you
• 谢谢
• Yang HUANG
• yhuang@live.fr