We are proud once again to be a part of Roland Berger China’s Chinese Consumer Report. Just like last year, this year’s report provides an in depth view of the Chinese consumer, with a particular focus on how the Internet both a part of and impacting the consumer landscape.

This year’s paper EN version and CN version &  last year’s paper here.

Why does it make sense for a leading management consultancy like Roland Berger work with CIC, the leading China social media research and consulting firm? Because social media is changing not only changing communications, it is changing business.

From my intro:

There is much hype in the West about how the Internet, and in particular, Internet Word of Mouth (IWOM), has the potential to transform the relationship between brands and consumers. In China, where there are more people online, more people talking online, more places to talk and those who are talking are more engaged than any other market, this hyped potential is in fact a reality and has been for some time now. Chinese consumers use native social media channels like Xcar BBS (bulletin board service) community, Sina microblog and social networking site Kaixin to share opinions and experiences about brands by the millions. On automobile BBS sites alone, over 13 million consumer comments are published every month by 500,000 consumers. More than just talk, consumers are even organizing themselves for group purchasing discounts and online/offline protests against poor customer service. Many such phenomena impacting the brand/consumer relationship that are just beginning to happen in the West have been happening in China for years.

IWOM’s transformation of the relationship between brands and consumers means that it has relevance across the entire organization, including advertising, PR, marketing, sales, human resources, and customer service. The fact that it impacts so many areas of the organization means that it should not be “siloed” in any one of them. We already see IWOM putting pressure on such traditional functions as customer service and PR, where the scale and pressure of IWOM is making it difficult for brands to develop an effective strategy or even structure to respond. While we think it absolutely essential that brands use firms like CIC to listen to IWOM, we also believe that listening is not enough. Brands need to fully understand the implications that this listening has on their organizations. We believe that the Roland Berger – CIC partnership can help businesses not only listen to the buzz, but ultimately leverage the buzz for unique competitive advantage that enables them to thrive in this increasingly complex environment.

There are many angles of analysis in the report, but my favorite one is the “Value for Money”  or “Price Performance Ratio” (性价比) tracking within the automotive industry. This is a key, and perhaps unique, primary factor in purchase decision in China. If you read Chinese social media, you will often find these terms in product comparison discussion. From our analysis below, we can see that there was a noticeable increase from Q4 2008, which is about the time that the financial crisis was perceived by consumers to be hitting China.

Quarterly Buzz Volume Trends on “Value for Money” term in Automotive Industry (2008-2009)

Finally, value for money is another important component of brand. While price in itself is not the foremost factor, customers still want to get the most out of their purchase. This is evident in auto purchases, as value is the second criterion after brand attractiveness (see Figure C.1.7). On the web, it is even more evident that people care heavily about value for money, as many bloggers and forum users evaluate and compare products based on their performance vs. the price. In the automobile industry, mentions of “value for money” increased 60% from 2008 to 2009.

Hope you like the report.

For more CIC white papers (both Chinese and English), you can go to our Slideshare here and here.

This week, we have Bawang making waves with its use of Weibo as a crisis comm channel.

For more on social media and crisis in China, check out our archives here.

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For the last couple of weeks, famous local Chinese shampoo brand Bawang has been embroiled in a crisis around the chemical cancer causing ingredient, and its alleged use in the shampoo at unsafe levels. Beginning on July 14, Hong Kong and mainland China media reported extensively about the issue.

Any issue that involves chemicals in products that you put in or on your body are especially buzz worthy in China and have been for many years as a quick review of some of the biggest internet driven crisis in China’s history shows:

• Teflon and cancer in 2004
• KFC chicken wings and sudan red coloring and cancer in 2005
• SKI-II and chromium in 2006
• Sanlu infant milk formula and melamine in 2008

Bawang has the added ‘benefit’ of having Jackie Chan and Faye Wang strongly associated with the brand, appearing on ads and packaging. Questions of their responsibilities further fueled discussion.

What’s most interesting in this particular crisis is the role of microblogs, in particular Sina Weibo, the ‘Twitter’ of China.

Within hours of the crisis hitting the Chinese web, Bawang set up an official Weibo account which it used as its primary crisis communications channel.

The importance of Weibo as the key viral component of the crisis, as well as Bawang’s use of Weibo can be seen in the fact that Weibo accounted for over half of the mentions, according to CIC’s IWOMdiscover tracking tool.

Whether Weibo is actually an effective choice as a crisis communications tool is questionable, but clearly the influence of Weibo is there and brands will need to consider how to track and utilise in the ever evolving Chinese social media landscape.

Details can be found here. I will be speaking along with many distinguished speakers. Hope you can make it!

With this in mind, CIC and Wunderman are happy to be hosting a panel that will address these very issues for the China market.  As part of the panel, we are truly privileged to have Jeremiah Owyang from Altimeter Group, one of the preeminent analysts that looks at how social media is linking to communications. We will also have Nicolas Zurstrassen, GM of Nike Action Sports, to share about Nike’s experience in China.

Consider this a “Chinese Social Media 201” course…not meant for beginners, but really meant for current practitioners and senior level directors.

We will cover:

• Chinese social media landscape (the full picture)
• Case studies of companies strategically leveraging social media in China
• Nike China case study
• How to prepare the organization for social media (from a change management, strategic planning)

More details can be found here. Please do check it out. It will be worth your while.

Listening to what was being said by our consumers, and combining it with our own information, insights and ideation in our marketing communications, allows us to effectively engage with these users.

Such a statement perfectly supports what we believe is the mission of social media analysis: distilling and communicating actionable intelligence and insight from Chinese consumer digital expression  for more informed and smarter strategic decisions and planning.

In March, I had the absolute pleasure to speak on a panel at SXSW called “Social Media and China: Different than You Think”

The panel was moderated by Jacqui Zhou from Dell and the other panelist was Benjamin Joffe, Principle of Plus8Star.

Basically, I don’t have to summarize it here, because it has been summarized in so many other places, and with much better quality and depth than I could ever write myself.

So here you go:

Articles Summarizing the Panel

• Social media and China: What you need to know; Smartblogs
• Social Media and China: It’s Not What You Think: Notes from SxSW; Ignite Social Media (Chinese translation here)
• Social Media and China: Different Than You Think! (by fellow panelist Benjamin) Plus8Star

Other material:

• Here is the Deck from the panel.
• The feedback on the panel from Twitter can be found here (PDF).
• WebProNews did a video interview of me talking on social media in China.

Though I would like it to be so, I think not. However, social media research is a nice complement to traditional market research for traditional consumer insight. It also provides the additional benefit of providing context (who is talking, where the talk is, and the nature/style of the talk) that can’t be matched by any other approach and should be a key element of digital media/strategy planning.

Two recent articles:

• Comparative Surveys in China Reveal Minimal Differences in Data Collected Online vs. CATI, New Study from Survey Sampling International and Ipsos Confirms; PR Newswire
• Web-Tracking Research Emerging From Surveys’ Shadow; Adage

From the Ad Age article, note this quote from Kim Dedeker, chair of WPP’s Kantar Americas (Millward Brown, TNS among other WPP TNS firms):

Five years ago, while at P&G, Ms. Dedeker expressed skepticism about blogs as research tools, noting that bloggers weren’t really representative of typical P&G consumers. But asked last week whether it might be possible for marketers to replace tracking research with online sentiment monitoring, she said, “It’s very possible. We need to find better ways to enable it.”

The debate is certainly not new, dating back to 2006:

• Is There Something Rotten in CGM Research?; Marketing Profs
• Is There Really Something Rotten in CGM Research, AttentionMax (rebuttal)

The Role of Humans in “making sense of the buzz”

Thoughts/phrasings that have been bouncing around my head in the last month:

• A dashboard is a tool.
• A human provides insight and meaning. 
• A human uses a dashboard to generate insight and meaning.
• If your tool sucks, your insight will suck.
• Even with a good tool, your insight might suck.
• A good tool is necessary, but not sufficient for good insight.
• A good ‘human’ is necessary but not sufficient for good insight.

Perhaps this is obvious, but you would be surprised that clients/agencies for get such subtle, but very important facts.  Do you have the right person who knows how to use the dashboard? Does the person know how to generate AND communicate insight? Recent articles from the echo chamber of social media analytics (I’m a proud member) suggest that insight as human driven is finally beginning to resonate.

• Monitoring Social Media Bootcamp, London – The Story of the Day; Our Social Times
• Listening Platforms and Professional Services Net-Savvy.com
• On the Non-Automation of Insight Net-Savvy.com
• Brand Monitoring is Not Research; HumanVoice
• Social Media Monitoring And Human Business; Brandsavant

I do think there are two levels of “analysts” that are often missed. One level is the analyst who is a researcher, i.e. ‘makes sense of the buzz.” The above articles refer to this type of analyst.

Another level of analyst is the one who knows how to use the tool. One of the key challenges, for example, is to input terms to represent a topic to be analyzed. As Nathan points out, even such tasks are not easy, and cites this example from using Boolean logic to track mobile phone operator “Orange”:

(Orange OR subject:Orange -subject:light -light -”Clockwork Orange” -subject:”Clockwork Orange” -”orange box” -subject:”orange box” -juice -subject:juice -fruit -subject:fruit -peel -subject:peel -”Orange Wednesday” -subject:”Orange Wednesday” -”orange county” -subject:”orange county” -”clock work orange” -subject:”clock work orange” -”orange ink” -subject:”orange ink” -”bright orange” -subject:”bright orange” -”dark orange” -subject:”dark orange” -”light orange” -subject:”light orange” -(“color orange”~3) -subject:(“color orange”~3) – (“style orange”~3) -subject:(“style orange”~3)) AND ( (SMS OR MMS OR HDSPA OR “Mobile Phone” OR GSM OR GPRS OR 3G OR SIM OR handset OR “Sony Ericsson” OR Nokia OR HTC OR Motorola OR BlackBerry OR iPhone OR PAYG OR “pay-as-you-go” OR “Network Provider” OR UMTS OR WAP OR PDA OR “PAC Code” OR Cellphone OR OFCOM OR phones4u OR voda OR vodafone OR tmobile OR tmob OR “T-mobile” OR T-Mob) OR subject:(SMS OR MMS OR HDSPA OR “Mobile Phone” OR GSM OR GPRS OR 3G OR SIM OR handset OR “Sony Ericsson” OR Nokia OR HTC OR Motorola OR BlackBerry OR iPhone OR PAYG OR “pay-as-you-go” OR “Network Provider” OR UMTS OR WAP OR PDA OR “PAC Code” OR Cellphone OR OFCOM OR phones4u OR voda OR vodafone OR tmobile OR tmob OR “T-mobile” OR T-Mob) )

Now, try adding a level of language/cultural nuance, say, for Chinese. Like many markets, Chinese net language/slang is vivid, dynamic and essential to make sure you are finding appropriate references (see example with Ford here and here for background on overall Chinese net language).

See also:
Recent reads from February 2010
Recent reads from January 2010

SHANGHAI (AdAgeChina.com) — Toyota Motor Corp.’s recall of millions of cars globally has created a PR fiasco for the Japanese car company. In China, the company now has one more thing to worry about.

Negative feelings towards Toyota are bubbling just as World Consumer Rights Day is popping up on the calendar. Every year on March 15, brands are regularly taken to task by both media and netizens for poor service.

World Consumer Rights Day started in 1983 and today is only faintly observed in many countries, but China’s vocal consumers take it seriously.

Given the problems it is already facing this year, Toyota could be headed for a perfect storm in the mainland — and things are likely to get worse for the company before they get better.

For the rest of us though, important lessons can be learned in analyzing how Toyota’s problems are playing out, especially regarding the role of the internet and social media.

Japanese products already had image problems
First, unlike in other markets, the Japanese auto industry absolutely does not have a good reputation for quality. Chinese conventional wisdom believes Japanese companies use lower quality materials and processes when they manufacture products for the Chinese market in comparison to other markets, including the use of thinner paint and thinner body materials.

This belief is so pervasive that even Toyota President Akio Toyoda acknowledged it in his speech to the Chinese people on March 2, 2010.

The internet and social media are not playing a new role in the Toyota recall issue developing in China, but rather a very familiar one. Going back seven years, China’s crises have been initiated or significantly amplified on the internet.

The trend started with the Teflon cancer scare in 2004, and continued with KFC’s use of a cancer-causing food coloring, Sudan (2005), the SK-II chromium scare (2006), Starbucks’ presence in Beijing’s Forbidden City (2007), the tragedies caused by powdered infant formula tainted by melamine (2008), the Johnson Baby cream problem (2009), and the Sprite mercury scare (2010).

Taking the problem full circle, Toyota has the unenviable distinction of having started the trend of netizen involvement in a crisis with its 2003 Land Cruiser ads, one of the first cases globally in which netizens’ reactions to offensive ads were picked up by traditional media. In one ad, two stone lions, Chinese symbols of authority, salute as a Prado passes. Another shows a Toyota Land Cruiser towing what appears to be a Chinese military vehicle.

Toyota is just recovering from another more recent issue that was widely discussed online in China, the so-called “Climbing-Abilitygate” incident involving its Highlander SUV. A frustrated car owner made and distributed a video online of his Highlander, which was unable to climb a 30 degree incline, a slope easily handled by other SUVs and even Chery’s tiny QQ compact car. The Highlander has become the standard against which other SUV’s are measured for failure.

Advertisers should pay attention to microblogs
Blogs and social networking sites serve as a sort of “copy and paste” news distribution, and bulletin board sites (BBS) are the battlefield of rival car owners’ groups. News portals serve to aggregate, amplify and add fuel to the fire.

Relatively new on the landscape is the microblog, which suddenly is playing a bigger role. For example, Sina’s microblog accounted for almost 40% of all messages discussing Toyota’s recall, ahead of all other sources. Having a clear picture of where the crisis is playing out online is important for any crisis manager.

Key players in any crisis are the brand fans. In China, car brand fans come in the form of owners’ groups. Unlike bloggers in the U.S., Chinese do not organize themselves on social networking sites, but rather on BBS and in private groups on Tencent’s QQ.com social networking portal.

Car brand fans are particularly passionate and connected in China. For example, the Toyota Camry group on XCar alone has 2,082 members who generate 9,326 comments every month. They organize offline meet-ups, design logos for the group, organize group purchases and even design customized accessories like key chains.

For most Chinese, the car they have now is the first car they or anyone in their family has ever owned, and that car is very much a part of their identity. As such, they are fiercely loyal and protective of the brand, defending any attacks or slurs from rival brand owners.

Manipulating online conversations is a turn-off
Some advertisers are developing “social CRM’ initiatives that can mobilize these fans in times of need. Unfortunately, most marketers currently do not view these active owners as friends, but rather as the enemy.

Bloggers have complained online, for instance, that Toyota deletes negative posts through so-called “e-PR” agencies. Chinese netizens are very savvy to such manipulation. While such an approach may make the PR manager feel better, it only enrages the very constituents that should be rallied to support the brand they love.

We see brand fans across all industries mobilizing protests for Consumer Day over far less serious issues than what Toyota is facing now in China. This is a real crisis, with documented safety problems, for a brand that already has issues.

In the U.S., the much-loved brand is being knocked off a pedestal, but in China, it’s digging into a deeper hole. Actions such as manipulating online conversations will only serve as a catalyst for already angry and passionate owners.

Brands that fail to recognize the sophistication and complexity of the Chinese social media landscape during crisis communications not only miss opportunities to minimize the crisis but, more seriously, can further damage the brand.

Toyota’s brand will recover, but the question is how fast. A transparent, proactive communication which leverages the passion of Toyota’s online consumers, can, even more than Mr. Toyoda’s tears in front of the U.S. Congress, facilitate sincere and powerful word-of-mouth that will supplement and be more convincing than any traditional media communications.

The article source: Adage <Consumer Day Is One More Thing Toyota Should Worry About>

In time with Consumer Day, we are pleased to announce the upgrade of IWOMmaster, China’s first online service platform on IWOM intelligence and insight, click here to get your own IWOMmaster ID now.

Furthermore, we have launched our IWOMdiscover, an online buzz tracking engine covering Chinese social media sites. Utilizing CIC’s patent pending semantic analysis technique, IWOMdiscover provides timely buzz tracking service and high quality content. You can see now see 3 hot topics for free: Chinese Consumer Day, Toyota’s Recall Issue and the 2010 Shanghai Expo.

As I pointed in my IWOM Summit post late last year, the current phase of IWOM/social media development is seeing how organizations are adapting around social media. I am attending Dachis’ Social Business Summit in a couple of weeks which addresses this topic on a larger scale and I can’t wait. BTW, Hyku blog is a must read for anyone who wants to have a practical understanding of social media from someone who is right in the middle of the “last mile” of “installing” strategic social media within organizations. 

• Centralized Control of Social vs. Spreading Social Throughout the Organization (Social Media Today)
• Social Media is the ‘Last Mile’ - Part 1, Part 2 The Internal War, Part 3 Scaling (Hyku Blog)
• Listening to the Future (Visible Technologies)

The Internet Does Not Rise Above Nations and Cultures

Google’s threatened pull out in China has inspired reflection on the larger role of the Internet’s place within Society.

• The Internet Does Not Rise Above Nations and Cultures (David Wolf/Ad Age)
• Another look at China’s Internet (The Statesman)
• The Digital Dictatorship (Wall Street Journal) 

Behind the Scenes of Chinese Social Media Operations

These surprisingly candid articles demonstrate again that you need a nuanced understanding of the Chinese web.

• Publish and be deleted (Global Times)
• Invisible footprints of online commentators (Global Times)

Social Media for Categories

Just as there are specialized communications and research agencies for certain categories like healthcare, so will there be specialized social media agencies.

• Social Media Monitoring Goes Niche (Our Social Times)
• Understanding Luxury Brands and Social Media (Mashable)