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What multi national corporation would ignore a market with a population the size of the UK and Canada combined? Not many if the companies’ senior executives want to keep their jobs. However, this is exactly what many companies are doing when they ignore the rising influence of blogs and BBS (online bulletin boards) in China and how these new forms of expression can impact the bottom-line of companies. Marketers that ignore blogs and BBS do so at their own peril as bloggers frequently post their opinions on new product launches, rumors, and marketing campaigns ― often with disastrous results for companies.

China: a Blog Nation

80% of Chinese youth in urban areas, approximately 50 million people between the ages of 18 and 25, actively use blogs and BBS to share their opinions on a variety of topics. Combined with the 25 million bloggers in the 25-35 age group, these two segments make up a considerable portion of the 110 million total internet users in China.

And Chinese consumers do spend time online ― an average of 17.9 hours per week versus 12.7 hours in Korea and 11.4 hours in America. They surf online communities. Nearly 1.5 million play Blizzard’s World of Warcraft online game alone. The Chinese Government has placed limits on the amount of time Chinese youth can spend in internet cafes because they spend so much time online.

China blog 1
Source: Saidi 2006

MNCs need to focus on blogs and BBS to get a better grasp of their target markets’ online behavior. Chinese youth are driving China’s shift from investment-led growth to consumer-led growth and are the plum target market for many MNCs like Nike and Motorola.

Although China has a high savings rate, the 18-35 age group is spending at rates comparable to youth in the US. They rely on their parents, grandparents, and employers to pay for their housing, food, and other basic necessities and allocate their money for leisure purchases. Even those who earn $120 USD a month as factory workers or waitresses are buying $300 USD Samsung and Nokia phones and are one of the great untapped consumer groups by foreign marketers.

One popular blog in China, the blog of actress Xu Jinglei on internet portal Sina (SINA), has registered 44 million hits since she started it less than a year ago. She has become more famous in China for her blog than for her movies.

The total number of blogs in China will grow over 200% from 37 million in 2005 to nearly 120 million by the end of 2006. This number will continue to grow as more broadband services are rolled out to China’s inner regions.

China blog 2
Source: CMR Estimates, Yiguan, Baidu

The major portals in China recognize user demand for blogs but have yet to figure out how to capitalize on them from a revenue standpoint aside from having ad placements. Sina and Sohu (SOHU) really just made major pushes in the blog space at the end of 2005 to catch up with early movers like Blogcn.

Aside from Sina, other popular blog portals in China include MSN Spaces (MSFT), QQ, Sohu, Bokee, Tianya, Blogcn, and Netease (NTES).

China Blog 3
Source: CMR Estimates, Company Websites

Why Chinese Youth Like Blogs and BBS

Chinese youth are drawn to posting blogs and BBS, because they can express themselves freely to potentially millions of other people.

Unlike traditional media outlets, which copyright their articles, bloggers encourage others to repost their comments in order to get the rush from having millions of people read their opinions. Because of RSS feeds, bloggers’ posts get picked up by other blogs throughout the blogosphere automatically and instantaneously.

Chinese youth like to read blogs because blogging seems somewhat counterculture and different from mainstream China. Jaded by traditional advertisers and media, more and more Chinese youth are using blogs as a key source of information.

What Bloggers Blog About

Chinese internet users post and read blogs on a breadth of topics. They discuss lifestyle choices such as what clothing to buy, what music to listen to, and what movies to watch. They give product reviews, product comparisons, and discuss advertisements. If they like a product, they blog about it. If they do not like a product, they blog about it. Because of the setting of the forum, people express their likes and dislikes more strongly than they would face-to-face. News travels so quickly through these channels that a small group of dedicated individuals ― Malcolm Gladwell’s mavens, for example ― can effectively shape the opinions of large audiences rapidly.

China blog 4

What Does All This Mean For the Corporate World?

Companies can no longer overlook blogs and BBS as relevant forms of media. The Chinese government employs 30,000 people ― more than the number of workers in the Pentagon ― to ensure that harmful content such as pornography is not spread to the Chinese population. If the government is paying attention to the potentially polluting effect blogs and BBS can have on the country, why are companies not tracking the influence blogs can have on their bottom-lines?

Companies need to examine content and the way that these opinions can affect their operations. Companies can use blogs and BBS as a means of gathering consumer feedback and responding to both positive and negative opinion with a speed that was impossible only one year ago. Companies now are presented with a unique method to be proactive and to cater to their target market’s exact needs.

User Created Content [UCC] marketing campaigns where bloggers interact with a company online by directing a commercial for a company and the resulting blog comments can be beneficial for companies to generate buzz. Unfortunately, not all companies have realized the power of the new medium.

On the plus side, blogs can be used to benefit companies if pro-active methods are implemented. The wide number of consumers that use blogs can allow for companies to get real-time information on what their consumers want throughout an entire country. Not only can analysis be made quickly but online focus groups, surveys, blog analysis are more cost-effective than traditional focus groups, surveys, and one-on-one interviews when market research firms need to travel to ten cities.

Although blogs have a culture of being non-traditional and hip, they have become mainstream enough that companies need to realize and harness the power they have on the bottom-line.

Source: China's New Obsession with Blogs and How Companies Can Benefit