The Chinese market is one of the largest and most dynamic economic markets in the world, which is prompting more and more European companies to gain a foothold there. But these companies face a variety of challenges, especially in the area of marketing. From intense competition to an uneven playing field to strict regulatory hurdles - success in the Chinese digital space requires more than just a well-thought-out strategy. In this blog article, we address the key problems that European companies face and show how they can successfully overcome them.
Why Global Companies Must Prioritize Marketing in China
China remains the world's largest e-commerce market. According to Shopify's Global eCommerce Report, China's e-commerce market is projected to reach $3.3 trillion in 2024, accounting for a significant portion of global e-commerce sales. China's e-commerce sector continues to grow. For global companies, China's massive consumer base of over 800 million online shoppers and its advanced digital infrastructure make it a crucial market for long-term growth strategies.
Another important factor is China's rapidly growing middle class. According to McKinsey & Company, the middle class in China is expected to grow to over 550 million people by 2025. This demographic development creates enormous demand for international products and services, which companies can tap into through targeted marketing. Adapting to local preferences and cultural characteristics is essential to effectively use this purchasing power.
In addition, China plays a central role in the global innovation landscape, especially in the area of digital technologies and platforms. Apps such as WeChat and Douyin (TikTok) set trends worldwide and offer companies innovative channels to interact with consumers. Success in China can therefore serve as a blueprint for entering other Asian markets, which often have similar digital preferences and consumer habits.
In summary, China is an indispensable market for global companies due to its economic importance, growing middle class and innovative strength. A successful marketing strategy in China not only contributes to immediate business success, but can also significantly strengthen global brand awareness and market position.
Challenges of marketing in China
Digital marketing in China is crucial, but also one of the most demanding challenges for international companies. The Chinese market is very different from Western standards, and understanding the unique digital landscape is essential. With a huge population and a wide range of digital platforms such as WeChat, Baidu and Douyin, there are huge opportunities. At the same time, cultural sensitivity and understanding of strict regulations require a careful strategy. Successful online marketing and effective digital advertising in China require in-depth knowledge of the Chinese market, expertise in digital tools and up-to-date digital marketing solutions.
1. Strict Internet control
The Chinese cyberspace environment poses significant challenges for foreign companies, as strict internet controls, such as the Great Firewall, can significantly impact the performance of corporate networks and access to global services. These measures restrict the free flow of data and make it difficult to plan and maintain digital infrastructure, which can lead to delays in the implementation of marketing strategies and business development.
Solution: Using a reverse proxy server is an effective solution to circumvent the limitations caused by internet controls. A reverse proxy improves network performance, increases security, and ensures that content is delivered to Chinese users more efficiently without violating local regulations.
Do you need help implementing a reverse proxy server? We can help you!
2. Tough economic environment
The economic environment in China is complex and characterized by increasing politicization, which significantly influences the decision-making and strategic direction of companies. European companies often face unequal treatment, which can reduce their competitiveness. In addition, economic policy decisions that are unpredictable can force companies to reconsider or even reduce their investments and activities in China.
Solution: A strategic partnership with local companies or cooperation with established consulting firms can help to minimize political risks and create a more stable basis for market entry and business development.
3. The COVID-19 Pandemic
The COVID-19 pandemic has hit the Chinese economy hard and significantly affected the business activities of many companies. The strict zero-Covid measures led to massive restrictions that negatively affected not only consumption but also production and supply chains. Many European companies are hesitant to expand or continue their activities in China due to these uncertainties.
Solution: Companies should develop flexible business models that rely on digital and contactless services. Implementing e-commerce strategies that do not require physical presence and diversifying supply chains can help minimize the risks posed by future pandemic-related restrictions.
4. Protectionism
Protectionism, an economic policy measure aimed at protecting domestic industry from foreign competition, makes it difficult for foreign companies to effectively deploy digital solutions in China. These policies can take the form of import quotas, tariffs and other restrictions that significantly increase the cost and effort of entering the market. Companies often face additional regulatory hurdles that limit their ability to enter the market and remain competitive.
Solution: Establishing a joint venture with a Chinese partner or establishing a local subsidiary can help overcome protectionist barriers. These approaches make it possible to better adapt to local market conditions and meet regulatory requirements.
5. Cultural differences and consumer behavior
Chinese consumers differ significantly from Western consumers in their behavior and expectations. These differences include not only preferences in products and services, but also the way they interact with brands and make purchasing decisions. For example, the concept of “mianzi” (saving face) plays an important role in consumer behavior, and the emphasis on status and prestige is often crucial. In addition, Chinese consumers are more inclined to trust recommendations from friends and family, increasing the importance of word-of-mouth and social networks.
Solution: Working with a local expert from China is crucial to successfully navigate these cultural differences. At W4, we have a local team of Chinese natives who have a deep understanding of the culture and consumption habits in China. Our team can help you develop marketing strategies tailored to the specific needs and expectations of the Chinese market, significantly increasing your chances of success.
6. Technological and platform challenges
The Chinese digital market is highly fragmented and dominated by a variety of local platforms that differ from those used worldwide. WeChat, Douyin (TikTok), and Baidu are some of the leading platforms that are essential for successful online marketing in China. Each of these platforms has its own technological requirements, advertising formats, and usage habits that companies must understand and master to be effective. In addition, integrating Western technologies into these platforms often presents technical challenges.
Solution: Working with local technology partners and agencies that have deep knowledge of how these platforms work can counteract the technical challenges. An adapted technology and platform strategy that takes into account the specifics of the Chinese infrastructure is crucial for success.
7. Regulatory compliance and data protection
China has significantly tightened its data protection and cybersecurity laws in recent years, making it more difficult for foreign companies to adapt their business models and marketing strategies. Compliance with these regulations is not only complex but also essential, as violations of data protection policies can result in significant penalties and restrictions. In addition, Chinese data protection laws require that data collected in China is also stored there, which creates additional challenges in data management and security.
Solution: Companies should invest in comprehensive compliance programs that ensure all data protection requirements are met. Implementing local data centers and working with specialized compliance consultants in China can help meet legal requirements while minimizing risks.
Future forecasts for online marketing in China
The digital market in China will go through a transformative phase in the coming years, posing both challenges and offering enormous opportunities for global companies. With over a billion internet users and a constantly growing digital infrastructure, China is becoming an epicenter for technological innovation and digital marketing strategies.
One of the most notable developments is the increasing importance of artificial intelligence (AI) and machine learning in marketing. By 2025, China is expected to be the world leader in the implementation of AI technologies in marketing, enabling companies to develop personalized and hyper-targeted campaigns on a scale never seen before. Companies that embrace these technologies early on will be able to better adapt their marketing strategies to the specific needs and behavior patterns of Chinese consumers.
At the same time, the influence of the Chinese digital ecosystem on global trends will continue to grow. Platforms such as WeChat Mini Programs and Douyin (TikTok) will not only gain importance within China, but will also set standards internationally. Forecasts suggest that by 2026, more than 85% of Chinese consumers will use at least one of these platforms daily . This strong user engagement provides companies with a unique opportunity to delve deep into the Chinese consumer landscape and build brand loyalty.
The e-commerce space will also continue to diversify, particularly with the growth of new forms of commerce such as livestreaming e-commerce, which already accounts for a significant share of total online sales. By 2025, more than 20% of all e-commerce sales in China are expected to be generated through livestreaming platforms. For companies, this means that integrating livestreaming into their marketing strategies will become essential to remain competitive.
In addition, the regulatory framework in China will continue to impose strict requirements on companies operating in the digital space. By 2024, new data protection laws and tighter controls on digital content could be introduced, forcing foreign companies to continuously adapt their strategies and technologies . Companies that respond flexibly to these regulatory changes while investing in compliance initiatives will benefit in the long term.
Overall, these trends indicate that the Chinese digital market will remain dynamic and challenging. Companies that recognize these developments early and act accordingly will be able to assert themselves in this competitive environment and strengthen their global market position.
Case study reverse proxy
BMG LABTECH, a global leader in biotechnology known for its innovative microplate readers, was faced with the challenge of improving its digital presence in China. As European websites in China often suffer from slow loading times and limited visibility, BMG LABTECH needed a solution to make its website optimally accessible for the Chinese market.
To meet these needs, W4 implemented a reverse proxy that was specifically designed to reduce loading times and improve website accessibility in China. This measure was crucial to ensure that BMG LABTECH's content in China not only loads quickly and reliably, but also provides local users with a seamless and positive user experience. This technical solution enabled BMG LABTECH to consolidate its market position in China and significantly increase its digital reach in this important market segment.
Overcome challenges with our expert help
For companies operating in China, the support of experts is essential as they have a deep understanding of the local market, culture and regulatory framework. Through their expertise, they can help companies develop successful marketing strategies, avoid legal pitfalls and build relationships with local partners.
Discover the diverse possibilities of marketing in China with our customized services and expert help. W4 B2B marketing agency offers comprehensive support and expertise to successfully establish and grow your brand in the Chinese market. From culturally adapting your marketing strategy to leveraging digital platforms, our experts will help you achieve your goals in China and grow your business. We also provide tailored E-Commerce solutions to help companies sell their products online in China.
