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Competitive Advantages Blog Post

 Global IT Marketing

IT Marketing in China

In the wake of China’s 30 year economic boom, the country has also emerged as a global technology consumer. According to management consultancy McKinsey & Co. "Since 1980, China’s economy has grown by more than 9% per year. The country now manufactures 75% of the world’s toys, 58% of the clothes, and 29% of the mobile phones. More than $1 billion in direct foreign investment arrives each week. By 2008, China will be the world’s largest exporter, and by the decade’s end, its economy will be larger than that of either France or the United Kingdom."

Second only to Japan, China’s IT consumption has brought new found attention to the Asia Pacific marketplace. For example, China’s PC shipments, one of the bellwether indicators for IT growth, shows annual shipments rising approximately 15% according to analyst firm Gartner. This estimate further excludes Hong Kong, part of China since 1999, which realizes growth in PC shipments of nearly 12%.

There are strong indications that the IT market in China will continue to expand throughout the remainder of the year. Beijing-based CCW Research, whose IT research reports are marketed in the U.S. through Analyst Views (AnalystViews.com), reported that China’s total IT spend will grow approximately 15% annually. CCW Research predicts robust IT investment in several key economic sectors:

  • Telecom: Total IT spend may exceed $6 billion in the current year and grow approximately 13% annually, thanks in large part to government commitments for continued construction of 3G networks and applications.

  • Finance: Total IT spend is forecast to exceed $4 billion this year. Banking, which is the single largest category within the financial services sector, is projected see IT spending grow nearly 8% annually due in large part to increased technology expenditures by the country’s four state-owned banks.

  • Manufacturing: This sector's total IT spend will exceed $5 billion and shows no signs of decline despite the global economic recession.

While the economic opportunity for exporters of IT hardware, software and services is significant, marketing IT solutions in China is very challenging, even for multi-national companies with existing subsidiaries and distribution channels. Decision makers are difficult to identify, even more difficult to meet and show favoritism toward local alliances and recognized brands. Marketing channels are less mature and many Chinese technology media publications do not offer audited circulation. Online IT publications and social media networks are still very small and often failing without notice. Seminars and local executive round tables deliver mixed results and trade shows tend to be extremely broad and in many cases mix both B2B and B2C solutions.

Despite the difficulties, experience demonstrates that several fundamental strategies which work in the rest of the Asia Pacific region can work for China. Highly focused marketing vehicles, targeted audiences, role sensitive nurture campaigns and remarkable content are even more relevant in China where failing to identify your customer is seen as abusive. Experts who have previously navigated the China IT market also suggest China does not respond well to a one country marketing approach. The country is diverse and localized marketing by region will certainly deliver increased success.

Those IT solution providers who can navigate China’s complexity, continued growth and quest for IT solutions will be financially rewarded. However, those who approach China without local knowledge and a keen understanding of both the culture and the persona of the Chinese IT buyer will likely see their investments turned to losses and write-offs. A journey of a thousand miles begins with a single step. Consider making that step with Vantive if you are contemplating an IT marketing strategy for China.

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