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Email And The Chinese Market: One Billion Opportunities, One Billion Potential Pitfalls

By May 05, 2011

There's a temptation for direct marketers to approach mainland China as just another collection of 1.34 billion potential customers. The English language has a word that describes this tactic.

Failure.

To illustrate a simple yet significant difference between Chinese consumers and westerners, consider how the U.S. direct industry would fare if people didn't have ready access to credit cards. In China credit cards are relatively new, according to Frederic Jouve, CEO of Acxiom China, which was one of the founding organizations in the China Direct Marketing Association.

"A lot of payment is done C.O.D.," Jouve says. "Ecommerce is developing fast in China, but it's not pure ecommerce. The Chinese consumer looks online, calls a call center for more information, places an order and pays on delivery. Usually the delivery company cashes in the payment and passes money back to the seller."

Direct marketing is relatively new on the mainland. According to Jouve, it was more or less unknown a decade ago, as it was perceived as cost-ineffective: Sales force labor was cheaper than the materials needed to generate collateral.

Channels Less Siloed
The comparative newness of direct marketing has given China an advantage in terms of integrated marketing, as DM's emergence has been in all channels simultaneously. As a result, the channels are much less siloed, according to Jouve.

"I think China is more multichannel than the U.S.," says Jouve. "Look at the top three communication channels: Number one is mobile, second is e-mail and third is direct mail."

In fact, mobile phones are used by 61% of Chinese consumers who access the Web, a figure more or less on par with that of U.S. consumers.

That said, Internet penetration as a percentage of China's population lags that of other countries. Less than 30% of consumers use the Internet, compared with around three-quarters of the U.S. population. Then again, that 30% in China is, in raw numbers, greater than the total number of U.S. users.

While multichannel marketing tactics may be more advanced in terms of integration, China lags developed markets in other ways. "The U.S. is data rich, and China is relatively poor," says Jouve. "It's not that there's no data, it's that there is not a lot of quality data. If you are used to having some very sophisticated modeling, that may not be something you can apply in China."

There are other mechanisms western direct marketers take for granted which, when applied to China, present problems. Written Chinese is a mixture of pictographs, ideographs and phonetic sounds. This means database hygiene functions such as merge/purge and householding are considerably trickier than in countries that use alphabets exclusively.

To get around this, marketers can translate data elements into pin yin, a simplified version of its written language. This method isn't foolproof, however.

"The complex usage of characters and many iterations of writing street, building, floor and room numbers limit the ability for optimal data cleansing," Nick Barton, VP of sales and marketing for Intercontinental Hotels Group (IHG) Greater China wrote in an email.

Eastern Inboxes
One solution would seem to be pushing English-speaking consumers to accept English-language messages. That would be a mistake. Chinese mailbox providers tend to treat messages in English as spam, regardless of whether the recipient has requested them. Being adamant about having recipients add senders to mailbox whitelists goes a long way toward helping deliverability of English-language messages.

Despite these hurdles, email marketing into China can be done. Barton's company is broadening its reach within the Chinese market with cultural sensitivity and smarts. IHG anticipates more than doubling the 145 hotels it currently operates within China during the next five years.

A familiarity with the simplified language isn't just a good idea for data hygiene. As Kevin Hickey, IHG's global manager for email marketing notes, "There is a government mandate that subject lines support simplified Chinese. And all commercial email must have a subject line header of AD for advertisement, or the Chinese equivalent."

Acknowledging in-culture names is only the beginning of effective entry into this market, however. Hickey carefully monitors how Chinese consumers within various regions and demographics interact with his company's email messages.

At times IHG has encountered "historically low open and delivery rates," and working with various Internet Service Providers has proven an essential, as opposed to occasionally necessary, activity, especially given recent trends of Chinese ISPs routinely blocking images within emails.

There are other differences between Chinese and western consumers email use. In China, emailboxes are often provided by Web portal, instant message and related service firms, and consumers can be assigned e-mailboxes without having requested them. As a result, a Chinese consumer who is engaged online will have far more email addresses than a westerner.

Reputation Concerns
IHG has been working with email certification and reputation monitoring firm Return Path to facilitate its electronic messaging delivery. "Whether or not [given email addresses] are active or are being used is debatable," says Jake Curtis, corporate development analyst at Return Path. "Only the individual ISPs know for sure."

That can be problematic. While sender reputation hasn't caught on in China the way it has in the west, Chinese ISPs don't necessarily have automatic feedback loops which alert marketers when an email recipient has branded a message spam. Often companies or their intermediaries have to initiate contact with the Chinese ISPs to determine when this has been done.

Marketers also need to be aware that, in addition to individuals blocking their content, the Chinese government will block messages it deems adult, including references to gambling, tobacco or various salacious activities. Additionally, the government provides keywords to mailbox providers of unacceptable terms. While these lists aren't public, anything that has to do with dissent or protest, even if in an innocent context, should be reconsidered.

But merely being able to deliver messages into China doesn't mean consumers will respond to them. "Marketers need to have some sort of representation of commitment to the Chinese market for the consumers to trust you," says Curtis. "Consider setting up a branch office in China, or having a Chinese name for your company. They need to know they can access your services close at home. It's a very face-to-face kind of country"

Return Path's work with the biggest ISPs on IHG's behalf has paid off: "Customers now have images and links routinely downloaded for them," Hickey says. "That's a big win, one less step they have to take with our emails."

IHG earned this trust, and cut down on complaints, by localizing its content, and Hickey swears by using regional translators. China is large enough, and its provinces diverse enough, that acknowledging regional differences can have a tangible impact on a mailing's success rate.

Beyond Email
IHG has made several changes to its overall marketing materials which reflect China's diverse markets. Ever mindful of direct and literal translation of English content, IHG changed the Chinese name for Holiday Inn Express, its mid-tier brand, to read Zhi Xuan Jia Ri, or "smart choice."

According to ChinaDaily.com, the new name eliminates the words "Kuai Jie"—literally, "Express"—from its moniker. This may seem like a small change, but within mainland China "Express" hotels are considered lower-end properties. IHG has positioned this brand to compete with the country's three- and four-star hotels, ChinaDaily says.

IHG's modifications go beyond a name, however. "Research and market trends indicate that Chinese consumers seek more tangibility in hotel or holiday-related marketing material," writes Barton. To this end, IHG's collateral often features iconic destinations with corresponding visuals of the hotel property. This, according to Barton, is essential to making the connection between travel and hotel stays.

Flashy is also good. Return Path's Curtis notes that the Chinese have a word—renao—which loosely translates to flashy, noisy enjoyment.

"You see that on Chinese Web sites," says Curtis. "They're super busy, with java and flashes."

This is odd, given how Curtis characterizes Chinese broadband speed of 857/kilobytes per second speed as "much faster than the dial-up days". For most marketers this shouldn't be a problem, he adds, unless their e-mail messages incorporate a lot of java and video.