Tom Denford and David Indo from ID Comms: China’s unique digital giants

On this week’s #MediaSnack Tom and David take a look at what it takes to market successfully in China and a landscape dominated by Tencent, Alibaba and Baidu. These three giants are frequently compared to Western platforms like Google, Facebook and Amazon but that’s a small part of the story.

China is a major target for most global marketers, not least because it represents still a significant growth opportunity, averaging seven per cent GDP growth per year and with the total spending power of middle class growing even faster.

Goldman Sachs estimates that China’s online retail market will more than double in size by 2020, hitting $1.7trn. However, the rules of digital marketing in China are different because the ecosystem is different to most Western markets.

Tom and David look at what’s commonly referred to as BAT: Baidu, which offers services around search engine, video, translations/ mapping, Alibaba, which is big in e-commerce across c2c, b2b and b2c, and Tencent, which operates social networks, gaming, e-commerce and web portals.

These three Chinese tech giants are broader businesses than their Western counterparts, notably perhaps because they face less internal competition. For example, Tencent’s business splits out into many other operations including: Social Networks, Payment, Entertainment, Information, Utilities, Platforms and Artificial Intelligence.

The other main differentiator is their scale, Alibaba dwarfs Amazon in many respects: Alibaba, China’s biggest e-commerce group, handles more transactions each year than do eBay and Amazon combined. Amazon’s 2016 Prime Day was a fraction of the size of Singles’ Day, with revenues of $1 billion compared to $17.8 billion. In fact, revenues from Amazon’s Prime Day, Black Friday and Cyber Monday is just 43 per cent of Singles’ Day revenue.

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