Just one year after its launch in China in 2013, Evernote was already claiming 4 million users. Last year, China has become its second largest market with reported 20 million users. Yinxiang Biji, it’s Chinese company, has recently announced its plans to go public in China.

In fact, Evernote has succeeded where many famous Western tech giants, such as Google or Facebook, have failed miserably. So, what was it that they were doing right? Let us break down main factors of Evernote’s remarkable success in China.

Navigating around Chinese censorship

Evernote has always stressed its main functionality as a private data storage for individuals, not a social platform and broadcasting service. Although, the original version does include some social functions such as note sharing, they have been either removed or played down in the Chinese product. This enabled Evernote to stay away from troubles with China’s powerful internet censors.

Speed and functionality

The company has realized that the key to good usability in China is the speed of synchronization and access – the core of its functionality. Keeping data centers in US would severely impact connection speed and turn away potential users, making it impossible to acquire critical mass of local early adopters. Hence the decision to setup local data center, which was also its first one outside of US.

Privacy assurance

Company’s CEO, Phil Libin, has published a letter assuring subscribers that Evernote takes securing the privacy of user data in China very seriously. The letter emphasized Evernote’s adherence to its three laws of handling user data by making it personal, protected, and portable.

Employing social media

Evernote quickly embraced Weibo and WeChat, two most popular Chinese social media platforms. The company has also been publishing its own blog filled with useful tips about efficient usage of its services while tailoring the message for the local audience. The blog was encouraging users to write about their personal travel experience with connection to Evernote apps – another good example of user engagement.

Localized customer service

When it comes to Chinese users, Evernote quickly understood the importance of speedy and high quality customer service . The company has been recognized for its efficient response to issues and complaints, both through social media, like WeChat channel, as well via chat on their website.

Successful choice of brand name

Evernote has made a smart choice in picking its Chinese brand name that proved to be an excellent fit on many levels. Evernote’s Chinese name is Yinxiang Biji (印象笔记) and can be translated as “memory notes”. Incidentally, the name also incorporates character 象, an elephant, that is used as Evernote’s logo. The name is both memorable and descriptive of the core functionality of the service.

Integration with local services

Part of Evernote’s China localization strategy was releasing API for integration with local apps. As a result, along with its support for traditional services like IFTTT and Pocket, its Chinese product integrates local services such as WeChat, Weibo, Duoguo (a restaurant guide website) UC browsers and others.

Localized Evernote Market

Most recently, Yinxiang Biji has launched its local version of Evernote Market store with products specifically selected and marketed for Chinese customers. Evernote’s fully functional web-based outlet was noted for its good user experience and original offers. It also itegrates Alipay as its online payment solution.

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Being a worldwide industry problem, China’s digital advertising market seems to be one of the worst affected ones. Chinese  internet is the second most popular advertising media after television and was estimated at $55.48 billion by the end of 2018 according to China Daily. Unfortunately, advertisers’ losses could account for up to third of that amount, mostly lost to non-human traffic and fraudulent CTR (click through rate).

The report by Miaozhen Systems, released about a year ago, claims that auto and telecommunications were hit the worst with up to a third of the traffic being non-human, i.e. generated by bots and crawlers, while food & drink and the fast moving consumer products industry saw the lowest rate at 8.52% and 11.88% respectively.

…many local computers still run on Windows XP that is no longer supported by Microsoft. Bots can infect such machines much easier and, in fact, a proportionally larger share of fraudulent traffic seems to be coming from lower tier cities where more people still use older Windows OS.

How do the losses occur exactly? A small piece of malicious software, a “bot”, is placed on a host computer from which it visits various sites in the background without user noticing anything abnormal with their machine. It’s even harder to spot for advertisers because it shares the real user’s unique “cookie” identifier.

Other pieces of software can stack hundreds of ads on top of each other on a website, or place the entire website into a small pixel on a page. This way, it would seem that a particular ad was displayed while, in fact, it was never seen by a visitor.

CPC (cost per click) ads are also affected as such bots can be smart enough to mix real clicks with the “fake” ones, making it harder to identify as a non-human activity.

There are number of reasons why China is one of the worst affected markets. First, many local computers still run on Windows XP that is no longer supported by Microsoft. Bots can infect such machines much easier and, in fact, a proportionally larger share of fraudulent traffic seems to be coming from lower tier cities where more people still use older Windows OS.

Second, not all the fake traffic is caused by bots, some is accounted for search engine crawlers. Since search engine market in China is much more fragmented than in the West, there are simply more crawlers visiting each site.

A third reason that is also specific to China is the fact that many people would willingly install special traffic software on their systems in order to attract more followers to their social media profiles, making their social activity appear more popular. However, such programs would do many other things without user’s knowledge or consent, effectively plugging such computer into a larger bot network.

Lastly, there is a lack of habit and willingness to go after the offenders and many in the industry still consider this problem to be the necessary evil that nothing much can be done about. Although, there is a technology in place to combat the problem, its adoption in China has been slow.

A new alarming trend is the increasing proliferation of online fraud in the growing mobile space. Android is by far the most popular mobile OS in China but the official Google Play store is not the usual place to go for apps. Most people would go to many smaller apps market which exercise very little control over quality.

While, at the moment, most non-human traffic in China is still PC based, it is reasonable to assume that with more people using Android devices to access internet, the worst of mobile advertising fraud is yet to come.

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In the last 3 years, online advertising revenues in China have been growing at the rate of about 40% on year to year basis and show no signs of slowing down in 2015. According to iResearch, it is projected that this year, the total market will reach 216 billion yuan (almost $40 billion), up from 154 billion yuan in 2014.

Advertising with search engines is still the most popular choice (36.6% of the market), followed by ecommerce ads and brand graphic ads (banner advertising) at 24.1% and 17.2% respectively.

In those two categories, the leading providers are Baidu which holds about 60% of search engine market and Taobao, one of the ecommerce properties of Alibaba.

The infographic also features the results of surveys which were intended to find out what type of improvements users would expect in China digital advertising market in the future. One third of the respondents would like see more correlation between the ads and their interests. This further underscores the need for marketers to learn more about their target audience in order to improve their advertising ROI.

Here is the full infographic:

China Digital Advertising Market

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To this end, the understanding of brand building power through digital and mobile communication and knowing how to effectively insert themselves into the ongoing conversations are crucial and major factors; especially for any company aiming at the Chinese consumers.

According to a report by McKynsey, consumption will account for 43% of total GDP growth by 2020, compared with a forecast contribution from investment of 38%. Chinese consumers are an opportunity and will probably continue to be as they get richer. But there are still some unchanged variables like: Chinese pragmatism. They rely on multiples channels to get information about products and services. And as you can see in the graphic below, most of these channels are online platforms. This trend is still ongoing as the shopping behavior of Chinese people changes, they have lesser time to shop in physical stores so they are embracing new ways of experiencing the products and consumption.

3 Key Points for a Successful Digital Communication in China

Social Media

What is leading to the adoption of social media by Chinese people?

• The separation between families due to the rural exodus
• Young people that were born or grew up without siblings and during the Internet revolution
• Inexpensive access to the Internet

Why commit time and resources in developing your brand on social media platforms?

Here are some numbers to convince you from the Wearesocial report on Digital, Social & Mobile in China in 2015:

• QQ platform has 843 million users, Wechat has 600 million users;
• 714 million people in China are active on least one social media platform.

These platforms are also:

• Effective tools to build a brand by initiating conversations with consumers, creating and posting engaging social objects;
• Marketing tools: Chinese online buyers often post reviews or have their own blog where they discuss their latest acquisitions. This is the KOL phenomenon.

KOL stands for Key Opinion Leader. In China, they can be used to advertise a brand on a large scale as some of these KOL have millions of followers on Weibo. Paid advertisement campaigns on a platform like Weibo are not as efficient as on platforms like Facebook or Google. The rate of people clicking on these ads is usually low because Chinese consumers have distrust in traditional advertisement.
As mentioned above, Chinese consumers have a tendency to trust friends, coworkers when they research a product. They also trust their idols or online friends. That is where the KOL are useful for a digital communication strategy. They allow a company to reach successfully a specific target audience.

E-tailing

Why brands should be present on E-commerce platforms?

For the first half of 2015, E-commerce represent 10% of China’s total retail sales value. In that same period, E-commerce generated 253 billion dollars (1.6 Trillion RMB) of revenue in China. The major online companies Alibaba (which owns Taobao) and 360buy.com have established a national position, ranking among China’s top ten retailers. E-tailing platforms can help foreign companies building clear and consistent brand images and are a cost-effective way to reach consumers in small cities.
Due to the size of the Chinese territory, installation of physical stores takes a lot of time and money. The E-commerce system in China is well organized and can be seen as a replacement allowing companies to fill the gaps from lack of a physical store network.

The competition between E-tailers is growing. It naturally led to a cut of product prices, especially in the three major segments of Chinese E-commerce market: Apparel, Household appliances and recreational products. Transportation and health care product are also growing online markets.
The development of e-tailing is boosting consumption. The scope of opportunities is clearly widening for inside and outside players.

E-mobile

In July 2015, 20% of the population used a mobile phone to buy a product and 29% used a computer, 15% of the population used a mobile phone to research a product and 18% use a computer. It is estimated that, in 2015, half of all Chinese online consumers will be M-commerce consumers.
The price of mobile phones in China is dropping every year. It is a more affordable and convenient way to access the Internet. So much that they have replaced computers to become the main devices for accessing internet in 2012.
Why brands need to invest on mobile?

• Enable direct contact with the target audience: messaging apps (WeChat, QQ, KakaoTalk, Line, etc.) create a 1-to-1 communication with real end customers. For example: a company can create a WeChat official account where consumers can directly make a payment;
• Tailor-made and segmented content for brands;
• Optimize marketing expenses by geographic targeting and customer data analysis.

A successful digital communication will be the result of the integration of these 3 resources. Never forget that the objective is to make the brand concerned recognizable, trustworthy and different from its competitors. The business strategy must be carefully planned and also include: Point of sales, client relationship management and the product. Then, these factors must be coherent with each other and consistent for a good implementation in China.

Article written by Wei Hsu founder and CEO of INS Global Consulting, leader in PEO Services and HR Management in China since 2006.

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Overall, all signs indicate that China’s online population will continue growing in both size and complexity throughout 2015. Mobile is becoming the primary way of getting online and platofrms like WeChat, define how people communicate and connect with each other as well as with businesses.

As the slide below shows, mobile remains the fastest growing sector of the online economy:

Approximately, half of Chinese population is connected to the internet which is still behind most Western countries and it means that there is still plenty of growth ahead. There are over 600 million active social media accounts and over 500 million active mobile based social media accounts, majority of which are on WeChat.

Next slide shows that 37% of population is buying products online and 25% use mobile devices for that purpose. The majority of online commerce goes to Taobao with JD mall being the second largest ecommerce site.

It is clear that mobile based internet users represent an important segment that can’t be ignored by marketers in China. Mobile marketing is well on its way to become the central component in online marketing strategy for practically every brand. Below are some numbers to illustrate the trend:

Online social media has already become an integral part of Chinese society, here is the breakdown by type of social media channels:

Lastly, the numbers on time spent online: PC or tablet still leads in the devices category with almost 4 hours daily, followed by mobile with 3 hours 35 minutes:

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On the other hand, due to a number reasons, the familiar digital marketing tools, which are mainly run by Google in the Western markets, are not available in China. Google search engine market share in China has fallen below 1% this year and all the Google services, such as Google docs, Google maps, Google analytics etc., have also become blocked from access. This fact alone is making life quite difficult not only for marketers but for regular citizens and businesses.

Luckily, there is a an alternative and it is Baidu, the largest Chinese search engine with about 60% market share. In many respects, Baidu is totally identical to Google in terms of advertising options and marketing tools it offers, although almost all of those tools are entirely in Chinese. Here I’m going to review the main marketing options on Baidu from a familiar “Google perspective”. There are 4 basic types of advertising on Baidu:

1. Pay Per Click (PPC) or sponsored ads;
2. Baidu Brand Zone;
3. Baidu Union or display network;
4. Baidu Mobile;

Baidu PPC

Sponsored ads are purchased on keyword bidding basis,  just like with Google Adwords. Due to government requirements, opening Baidu Adwords account is a bit more complex than on Google where anyone can do it for free. Baidu requires a business license and, in case of a foreign company, a deposit that can be used towards the bids. Baidu also appoints regional agents in China, so depending on a company registered location, a specific authorized agent for that region must be used to setup PPC account. Fees may differ depending on an agent and a location: from zero to several thousand RMB. The account setup takes about one week (if all the documents are in order and are properly translated by an authorized Baidu translator).

From that point you can manage your account through the back-end admin panel which is similar to Google Adwords but with less options, a lot messier and entirely in Chinese.

Sponsored ads would typically appear at the top and at the bottom of the page as well as on the right, while organic search results are shown in the middle. However, it is sometimes hard to tell which are what, especially if viewed on a mobile device. According to China Internet Watch, Baidu PPC prices are higher than Google’s across almost all sectors. Here is the comparison of CPC between Baidu and Google (compiled by CIW):

Baidu Brand Zone

Baidu Brand Zone is a special place on the top of search results that features a specific brand that was searched for. It is a sort of a mini web page that can show basic information about the company or its brand, often with videos and latest offers. Here is an example for Adidas:

Typically, setting up a brand zone is recommended for brands who are already known in China and are looking to reinforce their presence. Having a Brand Zone will also make sure that people who are searching for that brand will have a better chance to be directed to a legitimate official site that represents it.

Baidu Union or Display Network

Taking advantage of Baidu Display Network allows your ad to be displayed across other Baidu online properties that range from various search products to music players or desktop applications. Similar to Google, Baidu uses complex algorithms to determine where and how your ad is shown, based on the profile of your target audience such as location, demographics or browsing history.

Of course, in order to be displayed, your ad should outbid the competitors for the same keyword and key phrase and have higher relevancy ranking. These are the current Baidu online properties that are part of Baidu Union:

The ads can be displayed in variety of ways: as static banners, text links, rich media, videos as well as floating ads – a very popular type of ads across Chinese internet.

Floating ads are typically shown on the sides of a page and always stay in the view, even when the page the scrolled down. While floating ads are rarely seen on Western sites, in China they are extremely popular and are considered to be highly effective.

Another part of Baidu display network, which is also called Wangmeng, consists of over 600,000 partner sites that cover all types of sectors and areas of interest. The way it works is quite similar to Google AdSense which has over 2 million participating sites, although majority are non-Chinese one. This makes Wangmeng network to be preferable to Google AdSense for the purposes of advertising in China.

Baidu Mobile

Thanks to wider popularity and availability of cheaper Android handsets and introduction of 4G mobile infrastructure, Baidu ads on mobile is a rapidly growing business. In fact, during the 1st quarter of 2014, Baidu had 160 million daily active users from mobile search, up from 130 million users two quarters ago.

Mobile ads are displayed in a similar way as on a desktop with sponsored ads on the top followed by organic results. However, because of the smaller screen of a phone, sponsored ads are shown only at the top.

In addition, if there is a listed phone number shown in the search results, clicking it would automatically dial that number.

Mobile ads have a great potential to target users at a specific location and can take advantage of geo-fencing and push notifications.

Most recently, Baidu announced a $10m investment in a Finnish mapping company whose technology uses the Earth’s magnetic field to map the insides of buildings precisely. Incorporating such technology with its apps could potentially allow Baidu to push ads to users in shopping malls who just happen to be near a specific store.

Considering that Baidu already knows from the browsing and search history about what such user could be looking for, combining such data with the recently released BaiduEye, a version of a Google Glass, the possibilities are endless…

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Here are some of the highlights that I find most interesting:

• China outspends any other country in Asia Pacific on digital ads which in 2013 reached 13.23 bn dollars or approximately 11% of the worldwide spending;
• Banner ads remain the most popular type and stand at 30.2% of all types digital display ads. Keyword search ads are next at 28.5% which is still behind US share of 47.1%;
• Baidu and Taoabao are the largest online advertisers in China by revenue standing at 22.25 bn RMB and 17.22 bn RMB respectively. Together they represent over half of the entire market;
• Largest online ads spenders are Pingan, Chinese insurance giant, followed Volkswagen, P&G and Shanghai GM;
• Four top sectors by online display ads are transportation, online services, real estate and food & drink;

This is the infographic:

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