Intranet user in China

China does not have the Internet, they have an Intranet. Household name sites that I use to connect to people worldwide like Twitter and Facebook, to name a few, are blocked by China’s rigorous censors.

Yesterday I attended an interesting lecture about China’s recent wave of innovation held by Kairos Future together with the Sweden China Trade Council. I learned that it apparently takes 24 hours for an idea in Silicon Valley to reach China. This got me thinking…..

The C2C (Copy to China) phenomenon is widespread in China. Smart Chinese entrepreneurs take an idea from the garages and labs of Silicon Valley and make their own slightly altered (and often improved) versions for China. The list of Chinese C2C concepts is long and includes Taobao (Ebay), Weibo (Twitter), Renren (Facebook), QQ (MSN Messenger) etc.

If China had access to Facebook and Twitter and subsequently had exposure to all the smart applications and programs that use these platforms as a login to create new accounts and quickly spread their concept to the friends of the person that logs in, my guess is that a global idea would take only 24 seconds to reach China.

Take a company like Wrapp which makes electronic gift cards.  Smart concept. These Wrappers have intelligently used Facebook for new users of their app to login and create accounts. Once a user has logged in, they are informed which friends have upcoming birthdays and can choose among suitable gift cards. Simple yet powerful. Facebook allows Wrapp to function like a pyramid scheme with one user signing up providing acces to millions of other users.

Chinese companies with smart applications also use Weibo or other external account based platforms for users to log in, but not being able to access Facebook hampers the global reach of these applications. This not only limits  the number of users but also prevents local Chinese applications to become global names.

The Intranet of China protects foreign entrepreneurs from having their beta versions of smart applications instantly copied to and tailored to China. So far there is no C2C version of Wrapp available in China but my guess is that when this application launches in the US, China will be wrapping gift cards like never before and selling them as plugins on Taobao.

In my view, China’s internet censorship hampers Chinese innovation and stifles programming creativity. Luckily it protects the remaining Western knowledge workers (entrepreneurs), whom unlike the manual workers have already lost their jobs to Chinese workers who take double factory shifts.

/Magnus – Chintrepreneur

New Year Firecrackers

We have just entered the year of the dragon! The dragon is considered a powerful and successful zodiac to be born in and hence Chinese couples are speeding up their efforts to bring little dragons to the world. In other words, China is facing a babyboom.

In 2012,  China will experience a statistical peak in an already existing Chinese babyboom. This boom will contine until 2015-18 and represents a fourth and final contemporary Chinese babyboom.

The main reason behind this boom is purely demographic but there will be an extra boost as celibatic couples whom have patiently slept back to back, now finally enter the right zodiac for conceiving dragons.

There is money in Babylon

The statistics vary but an estimated 17-19 million children will be born in 2012, in China. Lets focus on what this means for companies scrambling to profit from the patter of small feet. A baby boom can be profitable but only for companies and brands that focus on the right target groups.

Forget the mass market for baby durables. Competition is fierce and there are few opportunities. Try to compete with a company like Goodbaby that manufactures one baby stroller every five seconds. Last time I visited Toys R Us in China I counted 50 different types of baby bibs at prices so low you might think they are for single use.

For durables, companies that instead target the higher income segments have a great opportunity. But it still wont be easy, this is a totally new generation of Chinese parents. Parents that despite hectic schedules, increasingly will chose to raise their children themselves instead of outsourcing parenting to an “ayi” (maid) or their grandparents.

They need convenience, quality and good style that allows for a fast lifestyle with a baby in tow. Who would want to be seen with a “Hello Kitty” inspired baby stroller without a collapsible frame?

They have also experienced tainted milk powder scandals and are aware of harmful PVCs and chemicals which could affect their babies health. Look at the Taobao parallel importers whom peddle their imported brands, they really know how to market their stuff. Oekotex, no PVC, made in Europe etc…

I am still to find a foreign baby durables brand in China, that has managed to explain to this new generation of parents why they should be the first choice baby product. The ones who manage to do so, will be very successful.

/Magnus – Born in year of the dragon

Sights like this will become more common outside of Shanghai as well.

The CEO of the Ministry of Fashion, H&M was recently interviewed in the Wall Street Journal about coming global store openings. Contrary to my earlier post about another company, Electrolux, H&M was all for China. H&M plans to focus their expansion to China aiming for the growing middle class in China’s Second and Third Tier Cities. These are cities which are often further inland and not as big nor as developed as the larger cities of Shanghai and Beijing.  That’s one Swedish cosumer oriented company that is doing the right thing! The middle class in the middle kingdom is the target for a brand like H&M and this segment is growing fastest in tier 3 and tier 2 cities.

Most CEOs can not even locate Tier 2 cities on a map but Karl-Johan Persson manages to both point out cities like Kunming and hence at the same time the right strategy for sales growth. But there will also be great challenges when opening stores in regions and cities which are very different to the established markets of Shanghai or Beijing.

1. The right expectations

Often when expanding to new cities, management assumes that Nanjing or Kunming will be similar to other Chinese cities, just smaller. Hence sales are based on projections from other Chinese cities. For exampler, one assumes that sales in Kunming will be x% of Shanghai based on the spend of present store visitors in Shanghai. This creates lofty sales expectations.

China is very diverse and the shopping behavior between provinces differ greatly. It took brands like IKEA and Decathlon years to build up brand awareness in Shanghai and Beijing. When entering these new cities retailers need three things. Local competence to understand local tastes and needs, greater  marketing budgets as launching in a new province is almost like launching in a new country and most important lots of patience, as it will take time to build awarness and generate market share.

2. From gawking to shopping
All retailers worldwide have ”gawkers” people who just come for a look and this is especially true for big box retailers. In China, with so many new brands and concepts the gawking phenomenon is even greater. People come to the store to visit and explore but hold their wallets tightly. This is true also in the larger cities. At the IKEA store in Shanghai, free venue and coffee has resulted in an involuntary senior citizen dating service.
Retailers entering China’s inland provinces need to convince gawkers to become shoppers or ensure the target the right customers from the beginning.

3. Competition
Price competition is tough in China and despite fewer competing retailers in the inland provinces, in my view H&M is already a little late. Unless H&M gets their price right and realizes the aspirational aspect of their brand quickly, it will take time for them  to generate meaningful sales. All the brands are heading into China’s interior as well as all major online shopping portals.

4. Operations
Companies that delivery consistency in China are king. In a country as large and diverse as China it is difficult to manage store operations and ensure  a consistent experience. This is especially true when all the retailers are fighting for the same staff which has created salary inflation among experienced shopkeepers.

I have worked on several mystery shopping projects in China where we have checked everything from if a receipt was provided at the cashier to if the staff was able to explain the difference between two t-shirts. The in-store experience often varies greatly between provinces. To succeed in the interior provinces, companies need to implement training and follow up from the start to ensure the visitor experiences the brand correctly and consistently.

/Magnus – Retailtainer

Home appliance company, Electrolux recently published results for the third quarter of 2011. The main focus of analysts and journalists was the continued global cost saving program and attempts to increase purchasing efficiency. This led to a 8% drop of the Electrolux stock on the Stockholm Stock Exchange.

In the CEO commentary for the presented figures, there is more detail of the decline in mature markets, the cost saving programs and how Electrolux will optimize global purchasing. There is one bright spot: strong sales  in “growth markets”. These are grouped together as Latin America, East Europe and Southeast Asia.

But where is China? There is no mention of how China’s booming consumer market presents an opportunity for Electrolux. If not for the continued rapid growth in emerging economies like China and India, the world might easily have descended into a real depression in 2008.

There is no mention of how global purchasing can be steered to China for the Chinese market. Electroulx has a strong brand in China and this is in my view the market with the largest potential. Forget Chicago, look at Chengdu.

Of course, there is tough competition from domestic players like Haier but I still think Electrolux could create a stronger strategy for China.

So can several other companies. Companies need to realize the obvious. Growth is down in mature markets and China and other emerging markets hold the key. But to grasp this opportunity companies need to redefine their strategies for China, with products innovated in, designed for and both made in and made for China. China’s strong base for manufacturing need to be linked with the strong growth in the domestic market.

/Magnus

“Generation G”. G as in Growth

Investors examining market trends in China should of course consider the growing consumer market and the spin off products and services that will grow in tandem. The US has a GDP of 15 trillion USD and consumer spending is 70% of that. China has a GDP of 6 trillion USD and 36% of that is consumer spending. The Chinese government has set a target to increase that to 45% of GDP in their next five year plan. This represents 540 USD billion increased spending on consumer products and services! And that does not even include the anticipated increased spending due to China’s GDP growth of 9% annually. China is in for a consumer market boom.

Chinese people of my age, that is, 30 plus, represent a very different generation compared to that of their parents. Born during the start of the “open door policy” which was proclaimed in 1978 they are a generation that have most only experienced economic growth, rising property prices, growing salaries, booming stock markets and of course increased possibilities. The only way has been up.

This generation, which I call Generation G, is less likely to save their salaries and be as thrifty as their parents and grandparents (who typically saved 35-40% of their salaries). Their increasing salaries and consumption expenditure has created a scramble, with domestic and foreign brands fighting for a slice of the market.

At the same time the wide variety of and available information about new products and services has turned Generation G into savvier and smarter consumers. This generation will be difficult to please. Generation G demands quality products and are very informed. On top of this, they are very demanding in terms of service and convenience and expect next or even same day delivery when ordering products.

Luxury brands will benefit. However, at the same time this generation has not only more choice but also greater access to information and possibilities to travel. They are more likely to check the prices of luxury products online, on taobao.com or in Hong Kong and buy the item tax free during a trip there, rather than in a fancy store on Huaihai road in Shanghai. Luxury consumption in China will grow but mainly due to the excess purchases of slightly older Chinese entrepreneurs and the few Generation G members that have already built up fortunes. I believe Hong Kong and popular travel destinations for Generation G will experience the largest growth in luxury consumption attributed to this generation, not mainland China.

In my view, the main beneficiaries of Generation G’s increased spending in mainland China are non luxury brands that manage to build a story and deliver “normal” prices for the broader market. They will need to offer aspirational products with brand attributes that create connections and a feeling of community. Buy a t-shirt in a Nike store in Beijing and the staff is likely to tell you about which basketball star wore the same t-shirt in the NBA finals. Starbucks is not selling coffee, they sell a white collar lifestyle. H&M offers products made by famous designers but at affordable prices. The lists goes on….

Another benefactor of Generation G’s rise are the companies that provide the services they demand. Just like the during the US gold rush, the ones who made the most money were the ones who sold picks and shovels to the miners. In China the companies that “sell the shovels” are express delivery companies, internet retailers like 360buy.com which has built an infrastructure to allow same day delivery, banks that can provide credit and information companies like Weibo which feed the thirst for product information and connecting with like minded individuals.

If I would invest in China today I would look for well positioned brands that can both deliver on the aspirations of and the services required by, Generation G.

/Magnus – Brand Activist in China

IKEA for the poor?

No. It takes more than just a four letter company name and a Scandinavian concept to succeed in the Chinese home furnishing market. Lets look at some different home furnishing retailers in China.

Swedish retailer IKEA  entered China in 1998 and expanded slowly, building their China strategy on careful market research and a consistent concept. Today they are a very popular brand in China and are running a successful business.

To succeed in China IKEA did not only focus on lowering their prices. Instead IKEA aimed to be the number one reference in China for home furnishing inspiration via their OWN concept, OWN products and OWN staff. IKEA stayed true to their brand and avoided trying to only lower their prices to compete in China.

IKEA has no product adaptations for the Chinese market (except perhaps chopsticks), instead IKEA has tailored how they combine their products for inspirational home solutions. The concept is global but how the products are combined and displayed with a focus on real Chinese homes, both in external marketing and inspirational room settings in the stores has been key to success. On top of that, dedicated staff, a strong corporate culture and good management has given IKEA a strong base in China.

Today, other home retailers want to emulate the IKEA concept and have entered China aiming to profit from China’s rising middle class and growing consumption. Few are doing it right.

B&Q has failed to impress Chinese consumers and despite having several outlets they are struggling in China to gain popularity. In 2009 they decided to close a third of their stores in China.

Chinese consumers are already reluctant towards DIY and simply opening a big store with low (but not lowest) prices, without engaged staff nor inspirational solutions or products will not lead to success.

In January this year, Home Depot shut its last Beijing store, the fifth Home Depot closure in China in the past two years, and leaving just seven of the 12 stores it acquired in 2006. Home Depot made the same mistakes as B&Q. Just another boring retailer of DIY products.  Also, often the staff is provided by the brands that are sold in the stores. This keeps cost down but does not give shoppers unbiased advice, as shopkeepers only want to push their own products. On the contrary IKEA only sells their own products via their own staff.

http://www.usatoday.com/money/industries/retail/2011-02-23-bestbuy23_ST_N.htm

The most recent example with a four letter name and Scandinavian roots is JYSK.

My bet is that JYSK will either close their China operations very soon or revamp their whole strategy for China. JYSK has made more mistakes than any other home retailer entering China.

In China, JYSK is not an aspirational brand. A visit to JYSK will show a store with more staff than customers.  It seems as if JYSK has focused on selling non-unique, low priced items in poorly managed stores. Why would anyone want to buy something that can be bought online or in another store at a lower price, just because it is sold in a Scandinavian store with a four letter name?

The mistakes JYSK made in China:

1. “IKEA for the poor”

JYSK tried to copy IKEA and created an “IKEA for the poor”. Simply offering copies of IKEA products will not build uniqueness. This might work in other countries, but In China there are already Chinese companies that have done with more success. The “copy IKEA products train” left long ago.

2. First store in Shanghai.

Shanghai has the most savvy and picky consumers. If you are going to focus on low priced items to low income earners, choose another city.

3. No unique range.

JYSK does not bring anything new to China, except perhaps their textiles which are well priced. But this is not communicated externally nor in the stores.

4. What is JYSK?

There is no clear communication about what JYSK offers. JYSK does not even have a proper Chinese website. Their thin product flyers with foreign models and slashed prices does not stand a chance against other retailer catalogues. In order to succeed one must build awareness and explain the brand. It is also unclear who JYSK is targeting in China. They have opened outlets in locations where affluent consumers may shop (often requiring car ownership), but offer items these consumers do not want.

On Weibo, which is the most popular micro blog in China similar to Twitter, JYSK does not even have an official page. IKEA on the other hand has over 121,000 fans on their IKEA weibo page

5. Store display

When visiting a JYSK store it appears as if the products have just been scattered across the outlet. This could work as it gives the feeling of being able to find bargains, but then again, if other retailers sell the items at lower prices, it will not work.

A booming housing market, increased home furnishing consumption and high demand for foreign items make China an attractive location for home furnishing retailers. But simply opening a store with a four letter foreign name and a four minute strategy will not lead to success.

Magnus – Home Furnishing Activist

Tegge with integrity?

Can you recognize any of these brands? Callisto, Leo, Lozio, Ahsnil, Sierly, My Feno, Lancy from 25, Mioni Rosa, 1436 Erdos, Tegge or Senda.

A growing trend in China is a phenomenon I call “Blending with the Globals”.  In brief, this consists of Chinese fashion brands that mimic the style and image of well known global brands under their OWN brand name. During my earlier years in China, in airports, I would often find stores with brands I had never heard of right next to Gucci and Prada stores. Interestingly the clothes in these “Blending with the Globals” stores were rather similar and to be frank, quite boring. The only thing they had in common with the more stylish foreign brands were the high prices. Many of them also include a European city below the name, usually London.

The idea is of course to build a fashion brand with a global image and hence benefit from Chinese luxury consumers’ thirst for things foreign. The typical traveler with cash to spend might not be able to tell the difference between Prada and Callisto. The margins of the items are high and unlike the foreign brands no luxury import taxes are needed as the items sold are made in China. Next time you fly a Chinese airline, check the in-flight magazine, these “Blending with the Globals” companies often advertise there.

I have now noticed that this phenomenon has spread outside the airports to fancy shopping malls. Again the same foreign sounding names and foreign models but quite boring clothes (in myview). I first thought I was perhaps getting old and could not recognize all the new fancy brand names, but visits to the stores confirmed the “Blending with the Globals” phenomenon.

All the global brands are already present in or moving into China and in the past two decades the average Chinese consumer has been bombarded with choice. At the same time Chinese entrepreneurs have quickly caught up and launched their own brands and fashion groups. It is of course difficult to keep up with all the new brands and what they represent. Also, some Chinese entrepreneurs have purchased rights to use a foreign brand and promote it in China.

The trend is that Chinese companies are to a lesser extent copying foreign brand names with fakes or obvious “look a likes” but instead creating own brands that appear global but actually are locally produced brands. I am sure we will soon see the styles and varieties of clothing increase as well and in the future some brands will become real globals.

Question: Is this originally a foreign brand?

Tegge

1436 Erdos

Lancy

Senda

/Magnus

Made in Italy or Made in Dong Guan?

I have recently noticed more and more consumer complaints against companies that claim to sell imported products that in fact were made in China. Here is how it works. The company produces items in China, ships them to Hong Kong (or even Italy or to a bonded warehouse in China) and then imports them again. In this way they receive an official import stamp for their products. Of course to dupe their potential customers they also need an international sounding name, a website with pictures of Italian craftsmen making products by hand and a claimed partner overseas.

The Chinese company Da Vinci Furniture http://www.davincichina.com/cn.asp has come under increased scrutiny in Chinese media. Full article in Chinese here: http://news.sina.com.cn/c/sd/2011-07-10/133222788486.shtml

Da Vinci claims to have only 100% natural wood in their products and furniture that has been hand made in Italy. Obviously with the aim of making the brand more attractive for China’s growing number of millionaires. The brand becomes unique and expensive and will hence raise the status of the owner. Moreover they can claim that the wood and material used in production is natural and due to EU regulations not laden with chemicals. This is another area that Chinese consumers are concerned about. With the increasing number of chemicals used in production the consumer feels security when buying an imported product.

The investigation leads reporters to a factory in Dong Guan, Guandong province which makes the Da Vinci furniture. The materials are not 100% natural but also polymer resin material is used. No hand carving is used, instead all items are made from molds. Obviously this is fraud but Da Vinci still insists that their items are made in Italy.

Da Vinci sells their products at, what the Chinese call “天价” (Sky Prices). A wooden TV cabinet costs ca 120,000 Euro and a bed can go for as much as 3 million Euro.  Of course with Dong Guan being the furniture production capital of the world with over 3,000 furniture factories the production cost is probably below 10% of the retail price. No wonder Da Vinci is such a profitable company.

I think this story is interesting for many reasons.

1. Chinese consumers are gaining clout and are becoming increasingly interested in the origin of the products they buy. You can fool the people sometimes, but you can’t fool all the people all the time.

2. Wealthy Chinese consumers prefer to buy expensive items and it appears they are more attracted by the high price of the item rather than the quality or function.

3. The “Not Made in China” stamp is still important in China. People still associate foreign products with high quality.

Point three is interesting as it poses many questions for overseas companies and their strategies for China. When targeting both consumers and businesses as buyers for products or services, will a “Not Made in China” product be more attractive? Or is “Researched in India, Designed in Sweden and Made in China”  just as attractive?

In a flat world it becomes harder to define where a product is actually made and where its roots are. I think it all boils down to the quality of the product and the strength of the brand. If it is an international brand that represents high quality regardless of where the product has been made, one can succeed in China. The brand also needs innovative or unique attributes that offer an experience beyond the product itself. The best strategy is to attach certain values to the brand whilst at the same time maintaining high quality worldwide and hence minimizing the importance of where the product was manufactured. Like Apple. Designed by Apple in California made in China.

Designed in Älmhult, carried in China.

Magnus – Trendspotting in Shanghai

Photograph by Andreas Larson

It is interesting to read about the “fake” IKEA store in Kunming, China on Reuters website.

When I was working at IKEA China we encountered several fake products and many stores would copy parts of a working concept. But this is the first time the whole concept is copied.

When visiting competitors I would often find smaller stores that for a lower than IKEA price would make a copy of most any IKEA product. In these stores the IKEA catalogue was offered as a source of inspiration and one could choose among the different designs.

The IKEA catalogue is a very valuable item in China as it has 284 pages of inspiration. It happened that people would pick up extra copies in the IKEA stores, steal from mailboxes or the post office and then sell them in newspaper stands.

I discovered some IKEA catalogues for sale in Nanjing, right there among all the other home decoration magazines. At present there was no IKEA store in Nanjing but the catalogue was still in high demand as a source of home design inspiration.

Eventually, copies of products and concepts will disappear in China. Not due to legislation but Chinese entrepreneurs will want to build their own brands and products. Otherwise one will always be a copy of something better. Of course, in cities like Kunming where there are no IKEA stores and fewer other Western brands, copies will fill the gap.

/Magnus

Executive Summary

I recently wrote a report with an overview of the main Social Networking Sites (SNS) in China and how Swedish companies enagaged with these. We here present a brief version of the findings from an analysis of the amount of fans[1] Swedish[2] consumer oriented brands have on Chinese SNS.

The main sites examined were the Chinese equivalents of Facebook and Twitter, namely Renren,Weibo, Douban and Kaixin. The study was conducted in August 2011.

The idea of the survey was to examine how Swedish brands engage in Chinese social media as well as to discover which brand has the most fans. There are several reasons behind the amount of fans for each brand including how the companies chose to work on Chinese SNS, marketing activities and overall presence in China; hence this is not an objective study of the awareness of each brand in China.  However, the amount of fans still reflects the popularity of the brand in China as well as the success each company has had in using social media.

Mobile phone company Sony Ericsson, dominated with around 400,000 fans across the four different sites, followed by home retailer IKEA (240,000), car company Volvo (224,000) and educational company EF (298,000).

Sony Ericsson had company pages and hence fans on all the main SNS in China whilst IKEA and H&M had focused their SNS presence to Weibo. As a comparison, the largest IKEA page on Facebook is the IKEA US Facebook page with 364,304 fans in total.

The study highlights that there are differences between the studied Swedish companies engagement in Chinese social media.

Introduction

I recently read an article in Swedish about the presence of global brands on Social Networking Sites (SNS), specifically Facebook. I wanted to survey the same phenomenon on the Chinese equivalents to Facebook and Twitter as these media are not accessible in China.

Hence I analyzed the presence of Swedish companies which target Chinese consumers on Chinese Networking Sites. How many fans do Swedish consumer oriented brands have on the Chinese equivalents of Facebook and Twitter, Renren,Weibo, Douban and Kaixin

“Swedish” Brands in China

Although we kept a wide definition of “Swedish” to include Joint Ventures, the list of companies that are targeting the Chinese consumer market is short:

1. IKEA

2. H&M

3. EF

4. Sony Ericsson (Japanese/Swedish)

5. Volvo Cars (Swedish/Chinese)

6. Saab (Swedish/Chinese)

7. Oriflame

8. Electrolux

9. Kosta Boda

Social Networking Sites in China

We focused the survey on Weibo, Douban, Kaixin and Renren since apart from being the largest

SNS they have:

-Mostly adult users aged from 20~35

-Mainly users in first tier cities such as Beijing, Shanghai and Guangzhou

-Have a high engagement rate with daily updates

Graph 1: SNS in China

Social Networking Sites and users

Chinas Social Network Universe. (The study did not include Qzone which is mainly a platform for online chatting.)

1. RenRen www.renren.com

– RenRen is China’s leading real-name social media. It’s setting the standard for SNS in China, but still faces challenges from other social networks.

2. Sina Weibo www.weibo.com

– Sina Weibo is a microblogging service that threatens China’s social networks with a new model. Its features now far surpass those of Twitter, including threaded comments, pictures, videos, and Instant Messenger services.

3. Kaixin001 www.kaixin001.com

– Kaixin001 is popular among white-collars via its social games and post-forwarding features.

4. Douban www.douban.com

– Douban has perhaps the strongest community of any social network in China. It attracts young urban Chinese to discuss movies, books, music, and events.

What is a Fan?

We focused on fans or friends of official pages/groups created by the companies themselves but on some SNS it was hard to tell which the official page was, as fans had themselves created pages or there were pages that broke down the brand into stores or cities. Some brands had broken down their groups into sub-brands such as EFs online language learning concept. Likewise, IKEA has different pages for each of their stores as well as a specific activity page for Guangzhou. For this survey we focused on fans belonging to the “main” page and to pages created by the companies themselves.

There are of course several reasons behind the amount of fans for each brand and this study can hence not be seen as an objective study of the awareness or popularity of each brand in China. Some brands have a strong official presence on the SNS, has invested heavily in online marketing activities or they may have many stores across the country. IKEA has 8 stores in China whilst HM has 40 (and counting). Still, it is interesting to study how the brands engage in social media.

Graph 2: Swedish Brands on Chinese SNS

The graph shows for each brand how many fans they have across all 4 researched sites.

Summary

Sony Ericsson dominated with almost 400,000 fans across the different SNS. Sony Ericsson has enagaged smartly with all four SNS and established official pages. Moreover, mobile phones are a hot topic in China and phones can themselves be used to access pages, hence a strong link there between.

IKEA took second place at almost 240,000 fans followed by Volvo Cars and EF both with around 224,000 fans. EF has strong platforms on both Weibo and Kaixin but have few fans on the other SNS. IKEA has a similar approach but also has a strong following on Douban.

Volvo cars has a strong following with almost 225,000 fans and outclassed the other Chinese Swedish car company, with only 111 fans on Douban except some followers on unofficial pages (often made by fans themselves). Volvo has established a strong presence on Weibo with over 100,000 fans. However, compared to Volkswagen, Volvo has a long way to go. Volkswagen has over 2,5 million fans on Kaixin alone.

HM, Electrolux and Oriflame have less fans since they have no presence on Kaixin or RenRen at all. Electrolux has focused only on Weibo and have over 111,000 fans there. They have created a designed page with many updates and product information. This could give them an edge over Chinese white goods retailer Haier, which has no official page on Weibo.

Still, Electrolux would gain greater brand awareness by also creating an official page and an updated page on Douban. There is an Electrolux page on Douban but with only 10 fans it does not appear to be an official page.

HM has focused on Douban and Weibo and their pages there feature links to clips on youku.com (Chinese equivalent to youtube.com) with interviews with designers etc. Despite having few stores compared to the most successful foreign clothes retailer in China, Jack & Jones, H&M has a much stronger SNS and online presence. It is hard to even find a website for Jack & Jones in China.

Kosta Boda has very few fans and only exist on Douban and Weibo. In comparison Swarovski which is a well known brand in China has almost 20,000 fans on Weibo. Kosta Boda is hence a brand that could invest more into Chinese social media in their marketing efforts.

Interestingly, new Swedish entrants to the Chinese consumer market like for example Efva Attling, which makes premium jewelry still has 143 posts on Weibo, despite not having an official presence on Weibo. This is mainly due to their cooperation with the jewelry retailer I Do which has over 400,000 fans on Weibo. Most posts about Efva Attling are made by or related to I Do.

In conclusion, Swedish brands do have a presence on Chinese SNS, but the efforts should be increased to cover more sites and to build larger fan bases. Some brands have such a low following that a social media network strategy needs to be put in place as the Chinese consumer increasingly goes online. Of course one needs a clear strategy for the content that goes on the SNS but that is a different survey all together.

Graph 3: Fans for each brand and each SNS platform.

The graph divides the fans into each platform.

 In a market like China with both strong local competitors and constant new foreign entrants it is difficult for brands to stand out and explain what they stand for and what makes their products and/or services different. Engaging with customers and potential customers via SNS is one way to create awareness and explain the brand products and services.

Magnus