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Cause What Happens In China Doesn’t Stay In China. (chinalawblog.com)
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- Marketers Heed Chinas Social Media Explosion (adage.com)
Cause What Happens In China Doesn’t Stay In China. (chinalawblog.com)By Dan Harris on March 3rd, 2013 http://www.chinalawblog.com/2013/03/cause-what-happens-in-china-doesnt-stay-in-china.html More than seven years ago (that has to be the blogosphere equivalent of an eternity, right?), in a post entitled, Is China Going Green? we wrote admiringly about a big company that had one high environmental standard for the entire world: We are aware of a large Fortune 500 retail company that is opening units in China that meet or exceed the toughest United States environmental laws. I estimate this company’s environmental sensitivity will cost them at least an additional $25,000 per retail unit, yet I am firmly convinced this company is doing the right thing. This company’s actions make sense because the odds are good that China’s environmental laws and enforcement will get tougher over time, and building environmentally sound units now will almost certainly cost less than having to retrofit existing units a few years from now. On top of this, people often get very emotional about the environment and I can see Chinese citizens getting very angry with a foreign company whose units in China are less environmentally sound than their units in the United States or elsewhere. This is obviously even more likely to be the case if there were to be some sort of environmental disaster. Whenever I talk about ways to protect Intellectual Property from China, I always mention the option of providing “last year’s model” to China but in the last few years, I have stared adding how this is getting much more difficult as Chinese buyers are now very much aware of what is and is not a current model and they are more and more demanding the latest. Today’s Financial Times has an article on how Samsung is suffering on the PR front and being sued in France for the way its China subcontractors treat (or mistreat) their employees. The article is entitled, “Samsung code of conduct put to test” and it does a really good job discussing how companies whose pitches to the public/investors differ from reality are setting themselves up for potential PR and legal problems. The money quote is definitely the following: The case highlights intensifying international scrutiny of working conditions in China, as well as growing concerns about multinational groups’ control over their complex supply chains. If successful, the lawsuit could open a new legal risk for companies whose suppliers breach labour laws. When I was a legal pup, I handled the international litigation/arbitration for a multinational truck manufacturer (long ago sold off to any even bigger multinational truck manufacturer). My client’s literature described its trucks as “ultra heavy duty” and also as “the best built truck in the world.” I actually think both of these things were pretty much true, but after arbitrating against a top-flight lawyer who whenever I would talk about how you have to expect some initial problems with any massive truck (as opposed to a luxury car) would point out how that might be true for some trucks, but his client really expected more from an “ultra heavy duty truck” that is “the best built in the world.” Though the client did shockingly well at the arbitration, I was able to prevail upon them to change their marketing to better suit legal realities. I am NOT saying that is what Samsung should do here because I have no more knowledge of Samsung’s marketing or its employee handling than is contained in this one FT article, but I am saying that every company doing business in China to start realizing that what happens in China doesn’t stay in China. This means recognizing that your China supply chain is your supply chain, no ifs ands or buts. Not anymore. What do you think? Marketers Heed China's Social Media Explosion (adage.com)Pressure Is On To Up Spending And Use Opinion Leaders Effectively; Beware Fake Fans By: Normandy Madden Published: March 01, 2013 http://adage.com/article/global-news/marketers-heed-china-s-social-media-explosion/240093/ The explosion of social media in China is putting pressure on marketers to increase their spending, learn to navigate key platforms like Tencent and Sina, and forge alliances online with local key opinion leaders, known in China as KOLs. "One fascinating aspect of China's digital landscape is how openly netizens take to the cyber-streets to offer thoughts, opinions and guidance. Of China's 500 million online users, half claim to be active bloggers," said Chris Maier, Millward Brown's director, media & digital solutions, Greater China this week on "Thoughtful China," an online marketing-affairs talk show produced in Shanghai. (View the full episode ). China now has 580 million people active on that country's top social network, Tencent's QZone, out of 712 million registered users. QZone is followed in popularity by Twitter-like Tencent Weibo, with 507 million registered users, and Sina Weibo, with 400 million. Next are PengYou, also owned by Tencent, with 259 million users, and Facebook-like RenRen at 172 million, according to We Are Social. "Brands are looking to develop their own brand fans at a more practical level rather than just purely looking at weibo queens like [Chinese actress] Yao Chen. We are looking at KOLs from a down-to-earth point of view," said Tina Hu, general manager and head of consulting service at CIC, "but the way brands are using KOLs has evolved." China has four main types of key opinion leaders, according to Jesse Goranson, SVP, Media & Telecom at Nielsen Greater China. "[They are] celebrities, commercial accounts, grassroots folks [who] are building a name for themselves, then industry experts in a particular field." Microblogs called weibo are one of the fast-growing activities, along with e-commerce. Fashion and luxury brands are among the most active industries using social media. The leading players on Sina Weibo today include brands like Cadillac, BMW, Mercedes-Benz, Coach, Dior, Burberry, Audi, Louis Vuitton, Chanel, and Ferrari, but most Western brands are eager to expand their social media presence and align with opinion leaders who act as brand ambassadors. "Many brands have been working with KOLs for at least a couple years now and we have learned the good and bad along the way. I think that some brands are pretty good at finding the right KOLs and working with them in the best possible ways now," said Angie Au-Yeung, national digital manager, China at Lee jean's owner VF Corp. The coveted opinion leaders are also getting better at working with brands, she said. "We usually measure the effectiveness of our KOLs both qualitatively and quantitatively and it relates back to the way we choose our KOLs from the beginning. We look at the content our KOLs generate for us, no matter whether it's copy or visuals or music. Quantitatively, we will go about using the usual metrics, the number of interactions on the digital platforms [and] the traffic they can lead to our destinations." One challenge for advertisers is the rise of fake fans sold by vendors exploiting a quick business opportunity--selling virtual "followers" that artificially inflate the fan base of bloggers and brands. Market pressure pushes bloggers to drive more followers if that is the key indicator as to whether or not they are influential. "We see it all the time," said Andrew Collins, founder and CEO of the social media company Mailman Group. "Most importantly, you have to consider the context of what they are talking about, the level of engagement, re-tweets, comments. Then you have got to look into [the people] who are following those people, how many have not just fans, but a significant level of fans, and the amount of interaction they have with those fans." Normandy Madden is senior VP-content development, Asia/Pacific at Thoughtful China, and Ad Age's former Asia Editor. See earlier episodes of Thoughtful China. 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