Censorship and tea drinking: how the Russian built a successful business in China

China is a huge and growing consumer market attracting companies from all over the world. To succeed, you need not only to beat the competition, but also to know the local peculiarities of doing business. The marketing platform ExpoPromoter (sells tickets to professional exhibitions) has been operating in China since the fall of 2015, and in less than a year has become a notable player. Her clients include the Canton Fair, the Shanghai Auto Shanghai, the SIAL and IFE food industry exhibitions. The company's revenue in the Chinese market reached $ 2 million, and the number of partner sites for the sale of tickets exceeded 6 thousands. ExpoPromoter founder Gennady Netyaga told Inc.how to conduct marketing with tough Internet censorship, protect your technology from copying and gain the trust of the Chinese (recommendations and tea drinking).

Фото: Depositphotos

How not to stuff cones in China

In China, everything is built on trust. It is possible in the United States, coming "from the street," to conclude a mutually beneficial deal. In China, if they do not know about you, the odds are minimal.

To earn the trust of the Chinese, personal recommendations are needed. It makes sense to join a large industry association - for us it is the Global Association of the Exhibition Industry (UFI). Eminent clients - this is a plus, but they can not get without recommendations. We established business with the Shanghai Auto Show (Auto Shanghai) for half a year - half a year for meetings and tea parties. Our colleagues' recommendations helped us - we met at the presentations when we first came to China, and worked remotely for more than 2 years.

ExpoPromoter in numbers

$ 2 million - the company's revenue in the Chinese market for 2016 a year.

800 Chinese exhibitions collaborates with ExpoPromoter.

20 – 100% - the company's commission for each ticket sold.

12 869 events were held with the participation of ExpoPromoter.

Source: company data

Affiliate marketing in China practically does not work. To convince the Chinese to work with us - a foreign company - we first conduct an advertising campaign with our own money. The exhibition organizer receives the result (visitors and exhibitors) and only then pays for our services. The client does not risk anything: a thousand visitors came - paying, no one came - not paying.

The penetration of the mobile Internet in China is simply huge. Therefore, advertising should be primarily focused on mobile platforms.

Forget about Facebook and YouTube as tools for promotion - they don’t open in China. Google AdWords and Yandex.Direct are blocked there, and therefore do not exist. Focus your marketing campaign on Chinese resources. You can find a buyer using the WeChat messenger, buy clicks in the Baidu search engine, and sell goods on Alibaba.

Features of the Chinese Internet

China has one of the toughest Internet censorship systems in the world — the Great Chinese Firewall. It closes access to hundreds of popular online resources worldwide (including Facebook, Google, Instagram, YouTube) and a number of international media.

Since 2014, China’s Gmail and other Google resources have been completely blocked in China, and in July of this year, Whatsapp was partially banned (Chinese authorities have banned sending photos, videos and voice messages). Of the instant messengers in the country, the WeChat platform is popular - more than 900 million users - but Chinese intelligence services are actively monitoring the contents of their conversations. From 2018, the Chinese authorities plan to force providers to block VPNs (virtual private networks), which are used to bypass the blocking.

WeChat in the Chinese market is a real monster, covering more than 90% of the audience. If you are dealing with user-generated content, instead of a mobile application, it is much easier to create a page based on WeChat and develop it. The way of promotion depends on the product, but in our case the messenger allows you to achieve results faster and cheaper than the web.

Online marketing is very well developed in China using QR codes. This code is automatically created within the WeChat platform and is available to almost every person and any company. It is possible at the exhibition to paste the QR code of your page everywhere - this is an effective way to attract customers.

To buy clicks on Baidu and other advertising media, you need to go through a series of procedures. For example, if you are dealing with user data (in our case it is an online user registration), you will have to prove to the provider that your company is registered in China and runs on local servers.

In China, foreign companies are not allowed to engage in promotional activities. The exception is a few free economic zones: Shanghai, Chengdu, Shenzhen (China’s Silicon Valley). We chose Shanghai - this is one of the largest exhibition cities in the country and the most comfortable for work and life. In addition, from it is convenient to travel to Beijing, Guangzhou and other metropolitan areas.

There are many advertisers in the Chinese market with huge budgets - so be prepared for spending. Click in Baidu is not much more expensive than in Yandex, but the threshold for entering this advertising platform is higher. Unlike Yandex.Direct, where you can start an advertising campaign for $ 200-300, Baidu will need at least $ 20-30 thousands to work directly with Baidu. This money is needed to have access to statistics and not to work with intermediaries. Baidu is a huge company that is not ready to trade small things: conditions are worse with a small budget.

For the year of work in China, we spent a little less than $ 2 million on B1B marketing to attract exhibitions and partners and establish ourselves in the market.

Get ready to overcome the language barrier. Even in Shanghai, where 600 is thousands of foreigners, the penetration of English is minimal. At the household level, applications and software for translations help, but they are not enough to do business. If you want to work in China - hire local staff who have the same mentality and speak with clients in their own language. Today we have 15 local staff.

About opportunities and risks

The Chinese exhibition market is highly developed in terms of technology, and its volume is $ 10 billion per year. Internal competition is very high: 2-3 exhibitions can be held in the city on the same dates and with the same name. Since this is a dynamically growing market, large marketing budgets are needed: while in Europe or the USA, this is about 20% of the total exhibition turnover, in China it is up to 50%.

The sales period for making a deal (the time from the first acquaintance or presentation to the signing of the contract) in China can even be half an hour. For comparison: in the USA it usually takes up to six months. Such a high speed is due to fierce competition and high growth dynamics of the Chinese market - some exhibitions grow by more than 100% per year in the exhibition area. Whereas in Europe, for example, more than 3% no one grows at all.

From abroad to organize work with the Chinese is almost impossible. In addition, there is a risk of late settlement or lack of settlement by the client. In 2011, at the start of the project, we drove through Beijing, Shanghai and Guangzhou and made presentations of our services for exhibition companies (before registering a company in China). The interest in the eyes was quite lively, but this did not turn into deals, not counting single orders. We offered our customers a post-payment: some agreed, but later we encountered several defaults.

To sue a Chinese company from Kiev or from Moscow is practically useless. Chances of success tend to zero. It makes sense to try if the contract is prepared correctly (that is, in Chinese and with the participation of your lawyers). But if the default is $ 1000, it's cheaper to forget than to spend on legal fees.

The best way to reduce risks is to enter a prepayment. We had a relationship of trust with clients in other countries (for example, in Europe), but in China we transferred our clients to obligatory prepayment. At the same time, they reduced the check - they were given the opportunity to pay 50-100 for several leads (contacts of potential customers - Inc.) for €. Thus, we taught the market and made it clear that you can work with us. Convinced of the effectiveness of our platform, customers gradually increased the budget. For example, after a series of personal meetings, we could hardly persuade the Canton Fair to give us € thousands of 2 for the beginning. Today, this fair spends more on marketing through our platform at 100.

Фото: Depositphotos

Attack of the Clones

It is almost impossible to protect against copying technology in China. Copy everything and everyone. There are, for example, in Shanghai a Mobike startup - it rents bicycles without permanent parking: with the help of geolocation you can take them anywhere. Immediately after the launch of Mobike, 6 of the same startups appeared in the country - and they all work.

Both imported and local technologies are copied. An example from our practice: one organizer arranged an overseas property exhibition. Someone saw that this was a good topic, and the following year, three such exhibitions under the same name were held in the neighboring pavilions. But China is such a huge market that each of them was visited by 30 thousands of people, and from 300 to 700 exhibitors participated. However, we, as a marketing platform, it was only on hand: customers come and arrange an auction - who will pay the most for attracting a visitor.

Help in the fight against competitors can good recommendations and a unique model. Our idea of ​​promoting exhibitions through affiliate networks turned out to be in demand in the market. Previously, any website that posted information and advertisements about the exhibition could earn, at best, a thousand dollars. We now have contracts on which clients can earn, for example, on $ 2 million. It’s already unprofitable for them to switch to other partners - they earn more from us due to the size of contracts and the high commission we can afford due to the large volume of orders and exhibitions. Therefore, it is now cheaper to buy us than to do something like that.

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