US Internet companies' top 10 mistakes in China (3)

(Read part1 and part2 of this article)


7. Passive and gentleman-style v.s. proactive and mandatory market promotion

American style marketing strategy is to focus on establishing brands (such as using outdoor ad sign). It’s hard to pull the market forward in that way. Chinese websites seldom do any advertisement solely for their brands. They like pull-style proactive promotions in order to create speculations, direct revenue, and popularity. And in many cases, users are forced to view ads.

Chinese marketing specialist Mr Gong, Wenxing (the author of this article) has studied the difference between Taobo.com and eBay China's advertisement. Both of them use similar banner ads to promote products from their inventory. With the same expense, Taobo is 10 times more productive than eBay China. Why?

Because eBay lists out merchandises like iPod, Zippo, etc. But those are mainly for high end market. Most people don't read English and can not afford them.

Taobo's ads include lots of eye-catching items like sexy underware, spanish fly, and etc. They also automatically pop up their ads on many "trash" websites.

Those returnees working at American sites may not understand these: they would rather invest 100 mils on a clean and fashion advertisement to bring up 10 millions users, but not spend 10 mils on a low-taste advertisement which will be visited by 100 millions users.

If US sites can only get 1/10 advertising efficiency as their Chinese competitors, they are destined to fail. (YeeDing: shouldn’t it be 1/100 instead of 1/10 from the example above, haha?)


8 Email+MSN v.s. Phone+Fac-to-Face communication

90% of the communication between US site employees are done by emails. And they feel too good to use English. Even a simple matter which can be done within 1 min on the phone will require 10 emails back and force. In many cases, email and msn are not efficient at all. After Mr. Zhou, Hongyi took over the management of Yahoo China, there was a serious conflict between two cultures. Most of the original Yahoo employees use email to communicate with customers and partners, instead of meeting and dinnering with them. After getting rid of those people, Yahoo's business went better.

It's said that in a US based Chinese company, if there is one American in a meeting with 20 or 30 Chinese, everybody will talk English. It's completely not practical. They have to understand that they are doing business in China, so that you have to use Chinese language to communicate.

9. Clean and elegant v.s. Crowded and noisy appearance.

By the first look at a website, you can usually guess the origin of the site even without knowing its background. US websites are clean, simple, arrogant but beautiful. They hide the good stuff inside, and believe the concept of "don't be afraid of letting customer find you good stuff". It seems to be the taste of an international company. Although loved by 20% of the hign-end users, 80% of average users will just exit after a quick view of its cold and calm design.

Their Chinese competitors, on the other side, put vivid banners floating around, pile upo all the good stuff into the front page, and disregard the importance of elegant design.

Even today, the ex-Yahoo employees show no respect to hao123.com-a simple to death page with a horrible design of putting tons of links all together. But only a few years ago, Yahoo tried to make a portal with 1 billion bucks, dozens of MBA and returnee, elites from HK and TW. But they were pathetically defeated by a junior high graduate in Guangdong. He single handed created and maintained hao123.com with zero marketing expense. A few years ago, it leads in all PVs, UVs, and advertising metrics way ahead of Yahoo.


10. Hire managerial material with similar background v.s. Recruit entrepreneur type of person

US websites focus too much on communication and teamwork during recruiting. So they hire all those stereotypes persons: diligent, careful, cooperative, never messing up puncturation in emails, and making perfect power point presentation. They always prefer candidates from HK, TW, or oversea returnees. They formed a closed circle not letting others in. Therefore, they naturally agree on website style, products and promotions. From management point of view, they only like smooth and easy.

Chinese websites hire any decisive, risk-taking, and hard working type of people. Although they have different skill sets and experiences, they are all full of entrepreneurial spirit. They stretch to the maximums do business aggressively and build winner website.

In addition to those big sharks, many smaller US websites perform the same while doing business in China. They spend tens of millions to get barely 10’s of thousands visitor everyday to their sites, but their Chinese competitors can accomplish the same result with only a few hundred of thousands.

It is true that many US websites have huge reputation and fame in China. Their products are also great. Even before they enter the Chinese market, there have already lots of press releases. Who doesn't know eBay or Google? A native Chinese website however has to spend 1 billion to get to the same level. But Chinese Internet market is not about branding yet. It's still in an early but pragmatic phase. It's useless to only talk about abstract concepts. Those who work for US website have to firmly correct these 10 mistakes of their own, and turn the thinking to fit in the Chinese market: first satisfy Chinese customer with their special culture, and do more business development with government. Then, they can expect to see great growth.