The trainer was Mr. Mark Lee (Center for Advancement of e-Commerce Technologies, CUHK) and his topic included “The Rise of the Middle Class”, “Embrace of Internet”, “Segmentation of Internet Market”, “7 Guidelines for Strategy Planning” and “Group Discussion”.
The Rise of the Middle Class
Mr. Lee said that the growth of middle class was much larger than GDP. Middle class was defined the income reached RMB 60,000 (US$9,000) per household.
The following table showed the definition.
Moreover, the Lower Affluent was predicted to be increased 4 times within ten years (from 2010 to 2020).
It was obviously in Nike case. The headquarter office was changed from Hong Kong (Asia Pacific) to Shanghai (Greater China) in 2010. Another example was BSI that Hong Kong office reduced the size and reported to Shanghai.
Embrace of Internet
Mr. Lee introduced the Breath and Depth of China Internet Market. Number of internet users in China was 384 million which was more than US and Japan combined. Moreover, further growth opportunity and mobile internet opportunity were observed.
User of the internet in China spent average 2.7 hour online per day in 2009.
Some examples were showed such as Taobao.com. It was observed consumer-to-consumer (C2C) transactions were far more developed than business-to-consumer (B2C) sales in China.
Segmentation of Internet Market
The major user segment was found 75% in aged 35 & under; with 80% online hours.
Six Chinese internet user segmentations were briefed. They were separated into two classes. For Middle Class, they were ‘Young professionals’, ‘Active middle-age’ and ‘University students’. For Average Class, they were ‘Young gamers’, ‘Teenagers’ and ‘Passive middle-age’.
The following table analyzed the characteristic of the Middle Class.
7 Guidelines for Strategy Planning
Mr. Lee mentioned the 7 guideline below.
1. Allocate Sufficient Funding to Internet Marketing
2. Understand China Specific Behavior and Preference
3. Never Under-estimate of User Advancement in China
4. Align Internet into Buying-Decisions Process
5. Use Multiple Sources to Gain Customer Trust
6. Leverage on the Mobility Hidden Potential
7. Develop Localized Innovation
1. Allocate Sufficient Funding to Internet Marketing
It was because internet became to the most important medium in the lives of consumers. They were reached through social media (Web 2.0), online advertising, web properties and search management (Search Engine Optimization).
2. Understand China Specific Behavior and Preference
It was very interested findings that the highest online service activities percentage in China was instant messaging and then was online music. Why? It was because cheap mobile technology and free music download (MP3 format).
3. Never Under-estimate of User Advancement in China
Chinese user jumped into Web 3.0 using internet on mobile phone. They were more advanced but were early adopters. Moreover, they felt most strongly about incorporating online research into the decision.
4. Align Internet into Buying-Decisions Process
Internet was an important and reliable research and communication tools. Search engines were critical to the online decision-making process. It was because search engines served as the link between users and blogs, company web pages, government-sponsored sites or social networking tools.
5. Use Multiple Sources to Gain Customer Trust
Chinese users would look at many sources when seeking information and they did not rely on one source (Self-assembly of information).
It was obviously in Nike case. The headquarter office was changed from Hong Kong (Asia Pacific) to Shanghai (Greater China) in 2010. Another example was BSI that Hong Kong office reduced the size and reported to Shanghai.
Embrace of Internet
Mr. Lee introduced the Breath and Depth of China Internet Market. Number of internet users in China was 384 million which was more than US and Japan combined. Moreover, further growth opportunity and mobile internet opportunity were observed.
User of the internet in China spent average 2.7 hour online per day in 2009.
Some examples were showed such as Taobao.com. It was observed consumer-to-consumer (C2C) transactions were far more developed than business-to-consumer (B2C) sales in China.
Segmentation of Internet Market
The major user segment was found 75% in aged 35 & under; with 80% online hours.
Six Chinese internet user segmentations were briefed. They were separated into two classes. For Middle Class, they were ‘Young professionals’, ‘Active middle-age’ and ‘University students’. For Average Class, they were ‘Young gamers’, ‘Teenagers’ and ‘Passive middle-age’.
The following table analyzed the characteristic of the Middle Class.
7 Guidelines for Strategy Planning
Mr. Lee mentioned the 7 guideline below.
1. Allocate Sufficient Funding to Internet Marketing
2. Understand China Specific Behavior and Preference
3. Never Under-estimate of User Advancement in China
4. Align Internet into Buying-Decisions Process
5. Use Multiple Sources to Gain Customer Trust
6. Leverage on the Mobility Hidden Potential
7. Develop Localized Innovation
1. Allocate Sufficient Funding to Internet Marketing
It was because internet became to the most important medium in the lives of consumers. They were reached through social media (Web 2.0), online advertising, web properties and search management (Search Engine Optimization).
2. Understand China Specific Behavior and Preference
It was very interested findings that the highest online service activities percentage in China was instant messaging and then was online music. Why? It was because cheap mobile technology and free music download (MP3 format).
3. Never Under-estimate of User Advancement in China
Chinese user jumped into Web 3.0 using internet on mobile phone. They were more advanced but were early adopters. Moreover, they felt most strongly about incorporating online research into the decision.
4. Align Internet into Buying-Decisions Process
Internet was an important and reliable research and communication tools. Search engines were critical to the online decision-making process. It was because search engines served as the link between users and blogs, company web pages, government-sponsored sites or social networking tools.
5. Use Multiple Sources to Gain Customer Trust
Chinese users would look at many sources when seeking information and they did not rely on one source (Self-assembly of information).
Mr. Lee used Obama Election Website as example. One page was Obama Everywhere that included Facebook, Twitter, Youtube, Flicker, MySpace, LinkedIn, etc. However, the most important thing was message consistency on each source.
6. Leverage on the Mobility Hidden Potential
Smart Phone was mainly for telephone call. The gap existed and the adoption level on many features of smart phone remained low. But more and more customers were relying on their mobile devices to communicate, gather, and manage information in their lives.
7. Develop Localized Innovation
It was observed many localized companies success in China. It must have deep understanding of Chinese consumers by innovative approaches to meeting their needs.
During Discussion Session, Mr. Lee asked us to pick two of the most important and one of the least important within 7 guidelines. Then summary was written down on the board for further discussion.
6. Leverage on the Mobility Hidden Potential
Smart Phone was mainly for telephone call. The gap existed and the adoption level on many features of smart phone remained low. But more and more customers were relying on their mobile devices to communicate, gather, and manage information in their lives.
7. Develop Localized Innovation
It was observed many localized companies success in China. It must have deep understanding of Chinese consumers by innovative approaches to meeting their needs.
During Discussion Session, Mr. Lee asked us to pick two of the most important and one of the least important within 7 guidelines. Then summary was written down on the board for further discussion.
For more information:
The Centre for Logistics Technologies and Supply Chain Optimization, CUHK: http://www.logitsco.cuhk.edu.hk/
The Centre for Logistics Technologies and Supply Chain Optimization, CUHK: http://www.logitsco.cuhk.edu.hk/
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