By Jason Wincuinas Campaign Asia-pacific managing editor
“Crossing the Great Wall to every corner of the world,” read the first Chinese email to leave Beijing in 1987. That short note was a telling precursor.
Just as mechanical engineering prowess built commercial empires during the industrial revolution, digital skills have become the steam engine of modern business. It’s a global scenario to be sure but in China, where rapid industrialisation meets massive online populations, the story becomes even more pertinent.
Sometimes it seems like science fiction. Many of us still remember the tangle of bicycles filling the country’s city streets or the haphazard wires that carried power and intermittent telephony into otherwise desolate and dilapidated buildings. So when we look at Shanghai’s steel and glass towers, surging with more gigabit throughput than whole municipalities in other parts of the world, we should be allowed the occasional ‘wow’ every now and then. What’s been achieved in only a generation is nothing short of a true leapfrog.
And while there are many ways to tell this tale, Campaign’s Digital A-List aims to highlight not so much the events or circumstance but rather the names and faces behind the progress. Assembling a ‘who’s who’ is an epic task so this list is only a glimpse into what’s become an irresistible force. By no means is this an absolute cataloguing. But it does include important and influential thinkers. This is not a contest, nor an award. There are no winners or losers and there is no ranking. The A-List is just that, a record of top achievers. The people here are among those who make the marvel of digital China happen.
And though the missive is less straightforward today, China’s expanding economic influence also has a profoundly worded message for anyone ready to receive it. And it goes something like this: “If you are not on the train already, better get on board.” And though steam-engines were mentioned above, high-speed rail is a more apt metaphor.
A look back When Professor Wang Yunfeng and Doctor Li Chengjiong, China’s original digital natives, sent their first email, there were about 290,000 private motor vehicles in the county, total. Today, Chinese auto factories produce over five times that amount every month.
There’s little data readily available about roads for all those cars from the cold war era but today, a country with essentially no transportation plan from 1949 till the mid 80s, has more highway kilometers than the USA, a great deal of it built in just the past 20 years. Look at a new Chinese map and you’ll see a dense weave of pavement up and down the nation’s eastern edge, which only implies more growth potential as urbanization spreads west.
Of course business itself has boomed too. In their book The Revival of Private Enterprise in China, Professors Shuanglin Lin and Shunfeng Song peg the number of China’s private enterprises during the 1980s in the neighbourhood of hundreds of thousands, the majority of which were small family workshops. The latest counts, depending on the exact source and definition of ‘private company’, typically exceed 40 million and include multinationals like Lenovo.
But the most pressing numbers are those for internet users. From a start of only a roomful in 1987, the tally has swelled past 600 million. For perspective, that’s more netizens in China than there are people in the USA and Indonesia, the world’s third and fourth most populous nations, combined.
And a majority are mobile. A January report from the China Internet Network Information Center estimates mobile internet users at close to 500 million. A more recent report from Umeg, a Chinese analytics firm, says 700 million smart devices were already active at the end of 2013.
But Alex Lee regional digital director Ogilvy & Mather Asia-Pacific says “When we talk about digital or mobile in China, we are too focused on numbers, at least from the outside looking into China. Whether it’s 500 million or 700 million is an irrelevant discussion. China is way past the critical mass needed to be considered a mobile-first market.”
What’s next? The McKinsey Global Institute expects online spending in China to hit US$650 billion by 2020. It also claims that in Tier-4 cities alone, ecommerce represents 27 per cent of disposable income. If mobile is how most people get online, then digital dexterity is a priority for reaching them.
Still, Lee warns brands should tread carefully. “Mobile is the most personal, hence intimate, device any person will ever have. If we marketers are thinking about intrusively invading this space by pushing advertisement to mobile users, we are doomed before we start.” To win in this game, he asserts, focus has to be on giving rather than getting. Create utility, entertainment or both.
“China Merchant Bank recently slowed its desktop online banking development,” Lee highlights, “and instead built the entire experience on mobile. Not on an app, but on WeChat.”
Structural support for consumer spending is also there. The government’s 12th five-year plan includes a 2015 target to push total retail sales up 16% for consumer goods. According to the National Bureau of Statistics, 2013’s total retail spend hit $3.87 trillion in the country. Compare that to a reported $4.53 trillion for the same period in the US.
Even if market sizes are getting closer, China’s per capita spend still lags the USA or Japan. Individual shoppers would have to quintuple their outlay to reach the same levels as the no.1 one and no.3 economies that China sits between. Brining that spending into line would push China’s total closer to $20 trillion.
The online share of that is already gaining. Some sources say at about 20 per cent YoY, others claim as high as 35 per cent for PC platforms. But mobile rockets past those numbers. Consulting group iResearch reports gross merchandise volume (GMV) showed 165.4 per cent growth for 2013 in China.
Tim Parkinson, VP of marketing at Chinese casual-wear firm Trendy International Group says integrated digital strategies are among the most pressing issues. “Leaders are beginning to use digital marketing to impact retail channels (online and offline), to support shopper decision-making processes, and furnish data to impact strategic decisions across the business. But for fashion companies this is a difficult adjustment, as marketing in the sector has traditionally limited itself to image management and tactical traffic driving.”
He also says content quality is vital. Without “must see content” brands are left with “No storytelling, no depth, no consumer involvement.” But clearing both those hurdles depends on what Parkinson also points out as a third challenge “People.”
Who’s making it Happen? Daisy Chen, associate talent director for WPP Greater China, says everyone is looking for digital knowhow. “Digital planners, digital creatives, digital technologists; even market research agencies are eager to have digital-practice pioneers. Marketers and agencies were looking for talent who could transfer traditional skills into the digital world a couple of years ago. But now this has turned to a big preference for talent with original digital blood.”
Digital is the modern talent lynchpin. Mykim Chikli, China CEO for ZenithOptimedia, also emphasises the need to understand digital trends, explaining that “learning about what people do on smartphones is vital to the whole media process.”
She outlines a range of programmes her company uses to find, train and keep exceptional people, stressing that taking care of staff is key. “People say in China that money is everything. But we find if we give more attention to people, we get back more than just what you can get with money.”
Spotlighting talent within the organisation, sharing opportunity with them, helping them to build up a personal network and using the company’s scale to keep them out of silos are all goals Chikli pursues.
And that spotlight is what Campaign’s Digital A-List project is all about. The people you find here are marketers, creative coders, strategic thinkers and big idea-ists. If you want to see the digital engineers who are building the next set of commercial empires, look no further.