How can Central European companies and individuals use social media to develop partnerships with China?
Decoding the Myth of Golden Chinese Opportunities
Seen from a distance, the power of the Chinese economy is spellbinding, as many figures indicate: 1.3 billion people, an impressive, often double-digit GDP growth, a ranking as the 2nd top world economy, a strong appetite and expertise for technology, a 200 million strong middle class traveling around the globe and expected to outnumber Europeans by 2020, a growing number of Chinese companies investing into or simply buying up factories, famous local brands, football clubs, hotels in Europe and beyond. To make this opportunity even more attractive, China has launched an ambitious “One Belt, One Road” strategy – a modern Silk Road designed to integrate China economically and culturally with its neighbors, which extends to Central Europe.
Yet those numbers are only one part of the story of China’s economic development, and more importantly, are of little practical use for Central European entrepreneurs willing to enter a giant but also complicated and rapidly changing market, which has its own restrictions, hidden rules, and where many foreign investors have also lost their investment. While there is no magic formula, there is one tool that does not require large investments and that can easily target Chinese consumers of goods and services inside Central Europe: Chinese social media platforms.
Chinese social media mirror the growth of the Chinese economy: over 600 million active users of social media, mostly accessed via mobile phones. The major platforms such as QQ, WeChat, Sina Weibo count from 200 up to 800 million accounts. One simple example: Single Day Shop- ping, celebrated each year on November 11th, is when Chinese consumers use the online platform Alibaba, largely relayed by various social media, to spend up to US$14 billion within 24 hours (the figure for 2015) shopping online.
Unfortunately, Chinese social media have a side less talked-about by the business community: the political control of content. Most non-Chinese business people might think that as long as they stay away from politics they will not get into trouble. Here is a recent example showing the landscape is much trickier than it seems from a distance: a few years ago, one leading international interior design magazine had to pull out all its printed copies, pay a fine, and was given a serious warning by the authorities in charge of media content. The reason why? One of its articles featured the posh flat of a New York celebrity. On one of the pictures, standing barely visible on a coffee table, was a framed photo of the Dalai Lama. While it has escaped the eye of the first censor, it caught the attention of other censors later who ordered the entire issue to be confiscated and destroyed.
The rules and state agencies defining what is acceptable as social media content are numerous, complicated, and often contradictory. It is therefore essential to work with a Chinese partner who can navigate not only the laws, but, more importantly, can provide advice about the less visible red lines, the issues that can suddenly become sensitive. At the same time, it is key to follow new opportunities on the technical side, such as online banking, payment by cyber currency, and other developments.
Discovering the World: The Age of Chinese Tourism
With the emergence of a middle class in urban centers, tourism has kicked off in China. While the first waves of tourism were focusing mostly on Japan, South Korea, the US, Western Europe, and South East Asia, Chinese tourists are now discovering new destinations. One of them is Central Europe, which holds several advantages: new direct flights (Prague, for example, is connected via three new direct flights from Beijing, Shanghai, and Chengdu); in general, cheaper rates than in Western Europe; a perception of greater safety for Chinese tourists (following a number of Chinese tourists being robed mostly in France and Italy); and the charm of an “exotic” place.
To answer this need, Central Europe has one major disadvantage: the lack of people speaking Chinese, and of services offering a Chinese language interface. As a result, most guides in a city like Prague are Chinese people who can earn up to 200 euros a day, mostly because there is no local competition, and because many Chinese tourists do not feel comfortable using foreign languages. The vast majority of tourists book tours directly in China, thus this market remains untapped for Central Europeans.
What is the best way to change this trend? Using Weixin, the social media platform that is used by over 800 million users. Weixin, also known under its English name as WeChat, is often compared to Whatsapp – yet it differs in many ways by being more sophisticated; for example, it has more user-friendly platforms for group chat, transmitting videos and photos, and it embeds a great range of e-commerce and e-finance functions. Its “electronic purse” allows users to make not only transactions, but to send cash money to friends, to make bills, and purchase goods varying from cinema tickets to food and books.
Another aspect of Weixin is the possibility to open public accounts – similar to Facebook pages. Tourism is one of the many industries using such accounts to advertise for tours and allow clients to make hotel and air ticket reservations or find out information about a destination. It also provides a Shake-Shake service, a friendhunting social media feature that allows a user to search for other users who are shaking their mobile phones at that same moment. It hence creates a virtual social network for tourists, and makes it convenient for offline meetings and gatherings, a typical online-to-offline feature.
Just having a Weixin account is not enough for a Central European travel agency, given the extreme competition from long-established Chinese travel agencies. A strategic tool is necessary to make a difference: celebrity content. In China, celebrities run personal social media accounts that can count up to several million followers, which gives them a way to monetize their social capital. While it might not be realistic for a Central European company to “hire” a major celebrity, it is possible to approach a journalist, a writer, an artist and develop original content, in which a destination is experienced and described to attract new Chinese customers. Multimedia content should be part of the strategy, including viral videos, drone views of the city or the landscape to make the content even more attractive.
All of this is possible – anyone can register a Weixin account in China, but must be coordinated with a Chinese person who speaks the comments and questions by potential customers, and bring a genuinely Chinese touch to all the services.
Brick and Mortar: Purchasing Security
Real estate is another area where there is Chinese demand and so far little tailored services in Central Europe. First, it is important to understand why Chinese upper middle class is willing to buy property abroad: comparatively lower price is not the only reason. While China presents itself as a market economy, it retains a number of institutional and administrative characteristics from its socialist period and its planned economy system. For example, land in China is state-owned, and before the reform and open-up policy launched by Deng Xiaoping in the 1980s, no market transaction of housing and residence lands was allowed. It is now possible to acquire the right to use real estate property, yet this right is currently limited to 70 years. Full private ownership of flats or houses is therefore not guaranteed by the law at this point.
There are also other factors making real estate property precarious, such as eviction and destruction of real estate property with scant compensation, or health hazards because of the use of dangerous construction and decoration material. Besides, many upper-class families plan to have their children study and live abroad, or think of relocation to EU countries, and thus need to purchase real estate outside of China.
All of those elements need to be integrated for any real estate companies selling property in Central Europe, and should be accompanied by Chinese language social media platforms such as Weixin, websites offering video tours, drone views of property, as well as legal advice on local taxation laws and the rights of foreigners to buy and resell property.
Education: International Standards Please
China has been able to become one of the top world economies by reforming its market, yet it has so far delayed major and much-needed reforms in key areas such as media and education. Higher education suffers from two big limitations in China: the size of the population makes the entry examination extremely competitive and selective, thus leaving millions of potential students without the possibility to study or to study what they want. Besides, ideological control of curriculum discourages innovation, creativity, and critical thinking, which explains why every year up to half a million students go study abroad, whether they are able to win grants, or, as is more and more the case, their families pay for their education entirely.
Here, Central Europe is a relatively new player since initially, only English-language countries were considered as worthy destinations. Yet again, the combination of perceived higher safety, lower living costs, and prices can turn Central Europe into an academic destination provided a number of services are offered. First, education must be available in English, and this can include summer camps for teenagers who are preparing to take a curriculum in English later, whether in Europe, the US, or Australia. Second, comprehensive information must be made available in Chinese for parents – they are the ones making the choices for their child about anything from visa regulation to insurance, living cost, possibility of renting or buying property, recognition of diplomas. Providers of English language education must also be ready to open social media accounts to tell the stories of successful Chinese students in Central Europe, travel to China to participate in Education Fairs, and in general understand and meet the specific expectations of Chinese parents and young students.
Investing in Knowledge and People
Learning to speak Cyber-Chinese is a necessary step towards understanding the real potential of Central European goods and services. While it demands a good command of the many rapidly evolving social media platforms, their latest features enabling new services and formats of communication, the key for success remains in the knowledge of Chinese political and social culture. Central European entrepreneurs need to educate themselves and hire Chinese insiders.
Knowledge about Chinese social media is available through books but also via online courses that can provide valid introductions. At the same time, companies need to hire either young China experts from their home country or Chinese social media practitioners to navigate complicated waters and avoid situations that can rapidly destroy years of efforts. There are many stories of cultural misperceptions on the Chinese side as well as lack of sensitivity on the non-Chinese side that have led to boycotts and extremely damaging online campaigns targeting non-Chinese brands and companies.
In the end, social media remains the most affordable, creative, and sustainable tool to engage future Chinese clients. It is also the best way to gain quality feedback from customers and adapt content and services to more specific needs. Investing time and resources into understanding Chinese social media and its potential, developing a strategy to manage rapid growth and risks, and creating original, rich content is an easier and more creative way for Central Europeans to engage with China.
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