“Dell is the worst computer I have ever seen.” This is the outcry that Dell (NASDAQ:DELL) executives faced from the Chinese blogosphere recently after customers found they had received laptops with the wrong processors. Not good news for Dell after all the bad press they have faced online in America for poor customer service and exploding batteries that bloggers in the U.S. have coined “Dell Hell.”
Like their counterparts in the U.S., Chinese bloggers can be merciless as they blog about things they like and dislike. They feel empowered with the rush they get from having their comments posted around the world to millions of readers automatically and instantaneously because of RSS feeds and lack of copyright laws. Throw in nationalism run awry and the blogosphere can be a serious headache for multi-nationals.
Dell’s recent problems in the Chinese blogosphere stem from an incorrect advertisement of processors that Dell included in its Inspiron laptop line. Chinese customers like Zhang Min found they received laptops using Intel’s T2300E CPU rather than the T2300 CPU listed on Dell’s website. The small difference in performance, coupled with Dell’s seemingly “corporate” response to the issue was enough to anger a lot of Chinese consumers, and they vented online. Bloggers blogged, “I think Dell ran out of the correct processors and started selling us these hoping they wouldn’t get caught,” and “It’s always a shame to think that the world’s number one PC maker would treat its Chinese customers like that.”
Angry customers have banded together online to discuss whether to pursue a class action lawsuit against Dell claiming that the company committed fraud by switching processors on them. Unlike in years past where galvanizing a group to action took many months of face to face meetings, letter campaigns, and phone calls, consumers now have a convenient way to voice their opinions about poor technical support, long wait times, and rude service people, and they are taking advantage of that opportunity.
Chinese bloggers are voicing their concerns saying “Dell’s customer service is horrible. I waited a really long time, for nothing.” And in reference to laptop cooling problems some have experienced, “If you put a Dell on your leg you can then eat your leg because the meat is cooked.” Dell has made attempts to address concerns over its customer service through online forums by interacting with bloggers and becoming proactive in the blogosphere. Dell’s TR Reid posted on a message board on BusinessWeek’s website in response to the online fury attacking Dell, “We made and have acknowledged an error in our marketing material… We welcome discussion of Dell in the blogosphere, in China and elsewhere. We’re learning from and contributing to blogs, on a range of topics.”
As China’s blogosphere grows, multi-nationals like Dell are finding themselves confronted with a new medium that they can use to see whether or not their target market like or dislike their products and marketing campaigns. Recent examples of corporate missteps and the ensuing outcry from Chinese blogs illustrate just how important understanding the power of blogs can be for a company.
Colgate-Palmolive (NYSE:CL), an industry leader in China, also found itself at the mercy of internet chat rooms in April 2005 amid concerns that Colgate Total toothpaste might be linked with cancer. A study done by a professor from Virginia Tech found that triclosan, an ingredient in various hand and dish soaps, could react with chlorine in tap water to produce chloroform, a cancer-causing agent.
Though the study did not examine the possible risk of toothpaste containing triclosan, a tabloid in the UK picked up the story and wrote an article saying that triclosan is found in Colgate. The situation soon spiraled out of control. Bloggers in China picked up the story and started attacking Colgate.
Forums in China took the opportunity to create satire at Colgate’s expense. One post satirized, “For a fulfilling and happy life: use carcinogenic toothpaste in the morning while brushing teeth.”
Aside from the backlash in the blogosphere that can hurt many MNCs’ operations in China, many companies are beginning to understand that most of China’s bloggers fall between the coveted 18-25 year old age group. They are thus trying to harness the power of the blogosphere to develop marketing campaigns and get closer to their target markets.
Unfortunately, many multi-national heads have failed to understand the effect that blogs can have on their operations. As one MNC senior executive recently told me, “Blogs are for kids and not something we need to take seriously.” While he was right that most bloggers are Chinese youth, he was wrong that MNCs do not need to pay attention to the online medium as the Dell and Colgate cases show. Many other business bellwethers like Haagen-Dazs and private equity firms like the Carlyle Group have been buffeted by online fury in China as I have written about in BusinessWeek.
The Size of the Chinese Blogosphere – Do we really need to pay attention?
Senior executives of multi-nationals ask me all the time whether or not the blogosphere is big enough to pay attention to. Aside from a few high profile cases like Dell, they wonder if the blogosphere is limited in scope and if it can really impact their operations. Just how large is it, they ask?
The China Market Research Group [CMR] estimates that the total number of blogs in China will explode from 37 million in 2005 to nearly 120 million by the end of 2006, an increase of more than 200%. This number will continue to grow as more broadband services are rolled out to China’s inner regions and more youth join the 50 million Chinese youth already present in the blogosphere.
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 ― can effectively shape the opinions of large audiences rapidly.
Bloggers in China are only growing in number and companies can disregard them at their own peril. To avoid victimization from blog and BBS crusades companies have to adopt a sound strategy for interacting with the online community. The steps that Dell has taken to address consumers’ online concerns are steps in the right direction, but as Dell has witnessed, attempts are not enough. Consumers who are active on the internet are very vocal in their opinions and must be respected as equals and not simply as numbers. Companies have to respond to online conversations but they have to make sure they respond professionally and respectfully otherwise their problems will multiply.
Shaun Rein is the Managing Director of the China Market Research Group (CMR), a firm that helps American and European firms get the market intelligence they need to make smarter decisions in China.