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Managing Marketing: Cross Cultural Marketing In Asia

Ophenia_Liang

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Ophenia Liang is the Director and Co-Founder of Digital Crew, Australia’s fast growing multi-award winning cross cultural multilingual digital marketing company. Here she talks about the challenges of cross cultural marketing in Asia, particularly in China, India and Japan and the mistakes and lessons marketers and their organisations face when expanding into overseas markets as diverse and complex as these major world economies. 

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing and today I’m having a chat with Ophenia Liang who is the director and co-founder of Digital Crew, positioned as a multilingual digital marketing company. Welcome, Ophenia.

Ophenia:

Thank you, Darren, for having me here.

Darren:

A multilingual digital marketing company. Does that mean you just do transcriptions, translations, I mean?

Ophenia:

Absolutely not. Digital Crew is a multilingual digital marketing company focused on cross-cultural marketing so taking a brand, company or a business to a different culture. And that could be to a different country, different language or a different ethnic group in a country.

Darren:

There are a lot of countries out there that do translations (translation services). And we’ve all heard those amazing stories about when a particular brand or positioning line gets translated into another language and it means something totally obnoxious.

So what do you think about those stories?

Ophenia:

In fact, we have never done any translation in our history. We call ourselves multilingual because we produce content, campaigns, ideas or strategies for a different culture and different language. We never actually translate anything. If anything, we translate culture.

Darren:

But you would have to perhaps interpret a strategy or positioning of things into that market wouldn’t you?

Ophenia:

We usually interpret say a brand in English and our strategists will reproduce the whole thing in another language, for example in Chinese.

Darren:

So what markets do you work in?

Ophenia:

We have 7 offices in 5 countries: Australia, China, India, Japan, and US.

Darren:

So is most of that western markets like Australia and the US wanting to go into those markets (China, Japan, Hong Kong or India) or is it also marketers in India and China wanting to go to the West or even to each other?

Ophenia:

Yes, you’re right. Our mandate is to do cross-culture, which means it doesn’t matter where they want to go, but to go to another culture. At the moment we do have a lot more clients and brands from western countries who want to get into Asia.

Darren:

Of course, because it’s the big market.

Ophenia:

However, we still work with some clients who want to get to the western market and some clients from India who want to get to China.

Darren:

It is natural for western markets to think about marketing into big opportunity markets or economies like China or India. But in fact, we’re seeing a rise in Chinese brands and businesses actually exporting to the world.

Ophenia:

As brands, actually, China has a long history of exporting to the world.

Darren:

Manufacturing product.

Ophenia:

Manufacturing OEMs but at the moment we can see business and brand owners starting to realise they need to build brands. If they want to actually have a say on the world stage they need to build brands for the world.

We can see them starting to realise we need to understand how the western market works and we need to be in line or even ahead of other brands in the western, English world.

Darren:

The myth a lot of people have in the West about China and India is that these are just big markets. It’s like one big market. There’s a belief they’re homogenous. People say to me, China, 1.4 billion people but you can’t really think about China as a single market of 1.4 billion people can you?

Ophenia:

Absolutely not. 1.4 billion people is a lot of people, however, within that we have 33 provinces, 56 races, and we have categorised cities into 5 different tiers based on their population, GDP, economy, political status. And also people live very different lives from north to the south, from the east to the west.

So, it’s a very complex and different market when we talk about China for example.

Darren:

And then you go to India with, I think, 1.2 billion and climbing. In fact, it’s growing faster than China as an economy and as a population, a nation. You’ve got the same level of diversity and complexity don’t you?

Ophenia:

I would say India has a higher degree of complexity in terms of audience if a brand is to advertise in India. The official language is Hindi. English is just a business language. It is not official anywhere. And every state in India has their own official language and then every ethnic group in India has their own ethnic language.

There are more than 200 languages spoken and an average educated Indian would speak 4 to 5 languages. And then they have multiple religions in the country and each religion has different sects, subsets of religions. So they follow many different customs.

So, as you go into that the audience will resonate with very different messaging as you go across the country.

Darren:

Of course, because the most effective marketing communications actually talk to someone’s cultural beliefs. It has to resonate with them on the values they hold true and the place they represent in their society don’t they?

Ophenia:

Absolutely. Some of the campaigns we do in India would use Hinglish, which is a more trendy language; a mixture of Hindi and English and that resonates more with the audience who were born in the 90s.

Darren:

And also a large portion of that rapidly expanding middle class in India because that’s really what marketers are looking for isn’t it? When we talk about these large populations, 1.2, 1.4 billion people, what we’re seeing in both those markets is the rapid rise of the middle class.

The quality of living, their disposable income and discretionary spend is really what most marketers are wanting to tap into.

Ophenia:

Absolutely. So for example in China we are expecting about 800 million middle class by 2025; the number is slightly lower in India. But even though they are all categorised as middle class they’re still very different. They might be living in a 3rd tier city or a 1st tier city where they have different access to infrastructure or quality of education.

So they will be different as well and for a lot of brands entering into these two markets, the first step is to understand where they stand in that country and where exactly is their target audience. So for example in China, it’s not just Beijing, Shanghai, Guangzhou, Shenzhen for the 1st or 2nd tier cities.

And sometimes your target audience might be in the 2nd tier cities. There are more than 100 cities in China with more than 10million people.

Darren:

Wow.

Ophenia:

So you need to open your mind and be a lot more adaptive.

Darren:

Yeah and understand that complexity and to get the nuance of it. And a good example for me, I think most people have heard of Alibaba, because it’s such a dominant eCommerce platform but then there’s Alipay and all the other things.

But I believe there has been the rise of a competitor who has been focusing on tier3, 4, and 5 cities with a much cheaper offering of products even if some of those products are not real brands but have been very successful. I can’t remember the name of it—Pingdordor.

And it’s got an amazing valuation because it has rapidly taken this untapped market, the tier 3, 4, and 5 cities where people are buying on price. They’re being offered a cheaper alternative on a platform.

You would have sat here as an Australian on the Australian market if you had had an eCommerce offering that was so dominant such as Alibaba, you would never think that someone could possibly launch a 2nd tier platform that could be so successful because the market is so constricted and relatively homogenous compared to China.

This is one of the things about scale but it’s not just scale because you can segment within that scale if you understand the motivations of those different groups; different education standards, quality of life and that type of thing.

Ophenia:

The audience is so large and so different that you actually need to think a lot harder and do a lot more research than say in Australia. When you’re entering India, China, or even Japan, the product categories and your competitors and where they are—you really need to find a gap or a different sector or target an audience group that is untapped or less serviced by other brands.

So to do your research before entering is very important. Take a very big brand as an example, Xiaomi, which at one point was the world’s 3rd largest mobile phone manufacturing brand. They’re very successful in China but in China their target audience are upper middle class or well-educated, so 1st or 2nd tier, people with college degrees and sometimes with an IT background, more tech savvy.

But when they entered the India market they relaunched all the products and the product they have for India has every single price point from $50 up to $1,000, meaning every $10 increment there is a phone for that market.

Darren:

Wow, because they understood that huge economic diversity in India. In India, Smartphone uptake had relatively low penetration because up to that point most people couldn’t afford it at the lower economic levels.

So they’ve produced an opportunity of having something for everyone but also, I imagine, to upsell them so as people become more affluent they’ll just stay with the brand and upscale.

Ophenia:

Yes, absolutely. Mobile phone penetration in India, because the population is so big, the percentage is low but the growth rate is way higher than China. So, they have access to internet and information as well. If you look at the capital cities in India then penetration rates are actually quite high.

Darren:

Also on mobile phones, Oppo was very successful in positioning themselves around music and gaming and things like that to appeal to a younger segment. They were much more about older teens, young adults.

Ophenia:

Oppo, very interestingly adopted similar brand strategies for the China market as well as the Indian market. They position their brand as if it were an FMCG brand so very aggressive market campaigns. They are all quarterly based and heavily involve celebrities and top tier influencers and you can see them everywhere.

Darren:

KOLs.

Ophenia:

They are top tier KOLs—they are all celebrities.

Darren:

It’s a very popular acronym especially in China for marketing: Key Opinion Leaders because you hear about it all the time, brands wanting to find the right KOL to represent their brand to the particular audience they’re trying to appeal to.

We talk about celebrity endorsements in the West but this is actually quite different isn’t it? It’s almost like a mixture of celebrity endorsement but because of the power of social media in China, it’s also like our social media influencers. KOLs step across both of those don’t they?

Ophenia:

Yes, they are. There are many ways of categorising KOLs in China or India, but usually 3 types. One is the big celebrities ,actors, singers who are famous. The 2nd type is the opinion leaders who are actually experts in a field, so they could be a celebrity lawyer, an accountant or a professor.

Then the 3rd type is the grassroots celebrities or the KOL next door. They are ordinary people who become famous by doing something different on their social media and they gradually or suddenly build a huge following. That could be from 10,000 followers to millions of followers.

And this KOL industry in China is actually an industry worth about $6 billion. There are agencies who groom KOLs, schools that can train people to become KOLs who will move on to sign with an agency who will be dealing with brands.

Darren:

So those three types of KOL’s would translate into a western market like the US as celebrities, expert thought leaders, and then your 3rd one would be your social media influencers, the ones who have built a following through social media.

But western social media platforms are really not as advanced and developed as in China. Let’s go back to eCommerce, Alibaba has got Alipay; Amazon has never got to a payment gateway as an eCommerce site. Likewise, WeChat has WeChat Pay but Facebook has never created a Facebook payment gateway either.

A lot of people in the West are inclined to think that China is not innovative but they are actually incredibly innovative in that they build so much functionality into a platform, don’t they?

Ophenia:

If we talk about a China digital or eCommerce base (it’s way beyond eCommerce now), we’re talking about two companies: Tencent and Alibaba. They’re both building their own ecosystem and within that ecosystem we have their eCommerce platforms like TMall, Taobao.

And for TenCent they invest in JD.com, which is another competitor for TMall and Taobao and then they both have their own payment gateway, WeChat and Alipay, and they also have their own financial institutes. And they have their own news organisations.

So they actually control most of the things happening online in the digital world in China. If we’re talking about payment, the market share for WeChat pay is about 41, 42%. Similarly for Alipay. And then there are UnionPay and the rest.

Darren:

The more traditional payment gateways.

Ophenia:

Yeah, the banks are trying to get into it. But there is a reason the mobile payment has been adopted so quickly in China. It’s because the credit card never took off because people don’t trust credit. And mobile penetration was so rapid and so huge in China. And the 3rd reason is the government, I think, actually encouraged the company, the providers to use this in order to accelerate the cashless society.

Darren:

Which they’ve got a vested interest in doing.

Ophenia:

Yes.

Darren:

So we don’t see photos of apartments full of 100 RMB notes stacked high on a pallet because someone can’t afford to put it into the financial system. But it’s very customer centric and also very vendor centric.

Payment gateways are interesting because it’s not just about making payment easier for the purchaser; it’s also about making it easier for the seller. One of the things that blew me away, and this is quite a few years ago was the fact that you could, even in a tier 3 or 4 city have a street vendor who had a QR code that you could just pay with your phone.

You would just have to scan it and it would automatically pay that amount. That is so simple for both the seller and the buyer to transact. That’s amazing because we in the West are still struggling with things like Apple Pay and yet China has taken quantum leaps ahead with these payment innovations.

And it’s all driven by social media platforms, largely and eCommerce platforms.

Ophenia:

Yes, Basically, in China, in 1st and 2nd tier cities you don’t actually need to take your wallet.

Darren:

Just your mobile phone.

Ophenia:

And I particularly like to go to 7 Eleven for example. I don’t even need my phone; I scan my face to pay.

Darren:

Wow. I didn’t know that.

Ophenia:

And it’s not in a sci-fi movie; it’s happening now.

Darren:

You mentioned before that Chinese companies and brands are realising that their brands are exportable to other markets. It was surprising for me, I was in South Africa, in Johannesburg 2 years ago and there in a shopping mall there is a big display for WeChat payments in South Africa.

So this is technology and brands being exported to South Africa and the world. Are we going to see more and more of that?

Ophenia:

Absolutely, yes. I think both Tencent and Alibaba have been investing in a lot of technology companies outside of China and their expansion is not just with their own brand or their sub brands but they’re actually funding a lot of innovation and technology of Fintech companies overseas.

For example, Lazada, which is the biggest eCommerce platform in Malaysia, has been bought by Alibaba. And Paytm, in India, which is a mobile payment gateway is now owned by Alibaba. So, their expansion is way beyond just using their own brand but also in a capital way.

Darren:

It’s funny in a way because, as I said before, people in the West think of China as copying trends from the West. We’ve got the president of the United States up in arms because he wants to have new IP laws that would stop China copying American innovation but the Chinese have been innovating for years in this technology area.

Ophenia:

Of course there are cases where IP was infringed in China but the same thing happens in the US as well or in any country there are IP problems. I don’t think you can generalise whether Indian or Chinese are copying, however, I think learning from each other and paying for it.

Darren:

That’s how we innovate and improve the world. You have an operation in Japan?

Ophenia:

Yes.

Darren:

Do you do much work between Japan and China? In recent years there has been quite a lot of political but also commercial tension between those two markets hasn’t there?

Ophenia:

Yes. In Japan we do more for western brands getting into Japan and Japanese brands coming to China. There has always been tension between China and Japan and sometimes we don’t realise how close these two countries are in terms of culture.

Darren:

You’re right. There are a lot of Japanese characters that are the same as the Chinese characters.

Ophenia:

Yes. And also a lot of basic values like family and a lot of teachings are very similar. So when we are taking Japanese brands to China it’s a lot easier to make the client understand how complex the market is because they have similar complexity in Japan. You have a very saturated market in Japan as well.

You’ve got 100s of alternatives in the same category in any industry so they understand how complex it is. So, in that regard taking Japanese brands to China is actually easier for us.

Darren:

Because, as you say, there is that cultural alignment. I remember, was it about 3 years ago, there was a dispute between Japan and China over territorial waters between the two. And because of this dispute there was almost a groundswell of rejecting Japanese brands.

It’s interesting how political disputes can have a flow-on effect so quickly into the consumers’ perception. Suddenly, there was a swinging away from Japanese automobiles to the Chinese equivalent or from electronics like from Canon cameras to Korean and other brands that were seen as more desirable because of a political dispute.

It’s interesting because you wouldn’t see that so much in the West these days.

Ophenia:

Well, we need to respect patriotism, not just for China but for India and for a lot of nationalities as well. Patriotism, as marketers or brands you need to respect that if you’re operating in certain countries. You need to respect their values and what they believe.

And personally, about 10 years ago, I was in China and there was tension between China and Japan at that time as well and there were parades protesting against Japanese products and people even destroying Japanese cars on the street. But still today there are a lot of Japanese brands operating in China.

And not just Japan but Korea with China, there was some tension politically as well and consumers wanted to boycott Korean products but again still there are a lot of very successful Korean brands in China. And even some Western brands like Dolce and Gabbana and the mistake they made led to quite a lot of loss in China for them.

Darren:

I’m glad you raised that because we’ve had a few examples recently where western brands thought they were being humorous or funny but they’ve actually alienated the very people they’re trying to market to.

I guess this is where the work you do helps marketers understand the sensitivities and the nuance that what may seem funny from a Western perspective could be deeply offensive in India or China or even Japan. It’s important to actually understand that.

Ophenia:

Yes, that’s one of the most important aspects of our work; to translate brand culturally when they’re entering a different market and make sure that we still capture the brand essence—where it’s come from, its values, and what it stands for but can resonate and localise for the market they’re in, China, India or Japan or South East Asia.

They all have their cultural environment and the way they think and operate are very different.

Darren:

We do a lot of work in Europe and the UK, which at the moment is still part of Europe but people in Europe are inclined to think that that is quite a complex set of markets, except they have the European Union, which is at least unified currency, even though there are different languages and things like that.

But in actual fact, you’ve chosen to operate in a part of the world that represents a 3rd of the world’s population, India, China, South East Asia, Japan. You couldn’t have picked a more culturally and politically and economically diverse part of the world to operate in. Did you do this because you and  your partner are masochists or because you just wanted a challenge that kept you engaged and interested?

Ophenia:

I think both; you’re on point. I love a challenge. But also we’ve always been in digital marketing and both me and my partner have worked collectively in 5 or 6 countries and that’s what we see in the market.

It’s so difficult for a western brand to get into India or China and we see the struggle they have. And, of course, as an entrepreneur I see opportunity to help them. It’s because of the differences between the West and Asia; that makes our existence valuable.

Darren:

And the reason I ask that is because the work you do must be sometimes frustrating because you do need to get alignment don’t you? People are inclined to look at big markets like China and India and just think there’s big opportunity.

But in actual fact you have to take a long-term view. I was once told that ‘you have to remember that China has been a trading economy for 5,000 years; don’t expect to be able to dominate it in one to two years.’

Is that part of the issue that western companies must confront when they’re looking at India and China; that it is a long-term strategy not a short-term win?

Ophenia:

Absolutely. We always ask a client, how committed are you in this market? Are you planning to be here for 3, 5, 10 years? Otherwise, if you want to try and enter China for 3 months to test the waters it won’t work because it takes 3 months to set up a company.

That’s always the first step with the client; are you there for the long run? When you’re ready you come back.

Darren:

And part of it is, and this is not just for Asia; it is so much about building relationships and trust. I always find in the West we do business and then we build the relationship by doing business whereas in Asia it’s the other way; you build the relationship and then you do business.

That’s why the long-term has to be the play that you make. You can’t do the shot-term win.

Ophenia:

And you need to find partners in all these places that you want to be, and partners in all aspects. It could be practically an in-house employee, a business partner, or a joint venture or a local partner accountant, lawyer, branding partner. You need to build all these relationships in order to navigate the complexity in all these markets.

And you travel to an exotic location; you might want to hire a local guide and it is the same in business.

Darren:

Does that mean you see Digital Crew as the tour guide for business? Is that a metaphor?

Ophenia:

For brand owners, metaphorically yes. That’s how we help you navigate that complex environment and represent and generate ROIs and revenues and build brand, establish, build and thrive for a western brand in Asia.

Darren:

Ophenia, we’ve run out of time. It’s been a fascinating conversation. There is so much more I know we should cover but thanks for coming by and sitting down to have a chat about marketing to Asia, particularly China, India and Japan. Thank you for your time.

Ophenia:

Thank you for having me; it’s been a lovely chat.

Darren:

One last question before we go. Of all the markets that you operate in, which is your favourite?

Ideal for marketers, advertisers, media and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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