How to Dominate Online in China with Nicolas Chu

Transcript

Nicolas, it’s great to have you on the show.

Thanks for having me.

It’s been a long time since we’ve last chatted, worked together or anything back when you were running Expedia Australia, Expedia New Zealand. What other Expedias were you running? Japan or what other markets?

It has been years. I was involved in quite a few different ones. We launched Expedia India and also I launched packages in Japan. I was in-charge of product for Expedia Japan for quite some time and then I just focused on Expedia Australia and New Zealand towards the end.

We worked together. You were my client and we were helping you with SEO for Expedia Australia and New Zealand. The business had a big shift and there were some acquisitions and things that happened. There is a big shift for you personally and now you are running a startup. I’d love to start out with our audience hearing your origin story and how you’ve gotten to where you’re at now.

Since we worked together, I left Expedia in 2012 to join another online travel group, Orbitz Worldwide as the global president for their international brands. It is taking care of HotelClub and ebookers worldwide. Two companies in very different markets with a turnover of $2.5 billion US and it was great. I had a lot of interactions with China. I am the one who launched the market entry for Orbitz into China. I’m the first one to sign a global deal with Alipay, the major form of payment to China. I started to realize something that I noticed when I was at Expedia and interacting a lot with our joint venture eLong at that time. What I noticed was this explosion of demand coming from China for overseas product and services and also the demand coming from Western companies trying to tap into this market but struggling. I experienced this firsthand when I was at Expedia, when I was at Orbitz. I said to myself, “This is crazy. There won’t be another market like China.” It used to be the internet, the online space that you and I have been evolving for the last several years have been led by the US. There’s a shift now that is coming and China now represents 40% of the eCommerce worldwide, when a decade ago it was only 1%.

 

To put that back into perspective, the Chinese eCommerce market is larger than the US eCommerce market, the French one, the British one, the German, the Japanese one all put together and it’s still growing. China represents now 25% of the world’s internet population. A quarter of the world’s internet population is in China. I said to myself, “This is crazy.” While it is by far the largest market, it is also one of the most difficult ones to crack. It’s difficult because of the business culture. Things are done differently, the language, but also because of this great firewall. This regulation in China has been blocking popular channels that we have been using for years to promote our brands, products and services online such as Google, Facebook, Wikipedia and Twitter. All of these are not accessible in China. It also has favored the emergence of a completely different online ecosystem where you don’t have Google, you have Baidu, Sogou, 360, Shenma as their search engines. Where you don’t have Facebook or Twitter, you have WeChat, which is a completely different online ecosystem.

You see an opportunity like this is and say this is crazy that no one tried to close this gap between the Chinese demand and the rest of the world through technology. Allowing Western companies to go after this market in a similar way to how you go when you decide to expand overseas from the US to Europe for instance. This time, rather than saying it’s crazy, I decided to create everything and to launch this company, Sinorbis, in order to address this problem.

What are some of the important things for people who are interested in cracking that China market to understand and to implement so that they can seize this opportunity?

Going back to what I was saying, the fact that it’s a completely different online ecosystem, the impact is that even having a website that’s visible in China is not a given unless your site has been built in a way that is 100% compliant, it will probably take three to five minutes to be loaded. I always give examples. The Eiffel Tower website, which is the largest and most popular travel attraction in the world, their website takes five minutes to be loaded out of Shanghai not because their content is blocked. It’s simply because the website hasn’t been built for China. I always say if you want to have this huge market, you need to rethink how you do things. You need to build your foundations. You need to have a website that is 100% compliant.

You need to probably have what we call a WeChat official account, which is the equivalent of a Facebook page, but it’s a bit more than that. WeChat is a completely different online ecosystem. You can do everything through WeChat. You can pay for your rents. You can order food. You can chat. You can review. You can have access to the website. You can unlock bikes in the street. You can do everything through WeChat. There’s no similar app in the West. It’s difficult for us to understand but WeChat is more of a separate online ecosystem. My advice is you need to build your foundations. Get this right either by using a significant amount of time or money and using agencies on the ground or by leveraging a technology like ours, which will allow you to correct your website, optimize it for all the search engines such as Baidu, Sogou, 360, Shenma and managing your followers on WeChat, managing your accounts and all this.

Let’s dive into a lot of this because it’s fascinating. Let’s talk about the fact that it takes five minutes for the Eiffel Tower website to load for people in China. What needs to be different and why is this happening?

The official name of this project is called The Golden Shield Project in China. We also call it The Great Firewall. To build this firewall around China, it’s more as transforming the internet in China more like an internet and mainly to make sure that that information was controlled by the government in China. That’s the reason why you don’t have access to all those sites such as Facebook, Twitter or social media in general and also Google. Google pulled out from China in 2010 because they didn’t want to be compliant with their censorship in China. The main reason why most websites are not visible in China and take a lot of time to be loaded is that those sites have been built for the West. In terms of hosting, in terms of scripts that are used, in terms of optimization, it’s for Google.

A lot of people are using Google APIs or Google Maps APIs. All these are blocked. Each time that someone from China is trying to load the elements of your pages, it will slow down the whole thing unless it has been built with APIs and sensors that are 100% compliant with the Chinese environment. That’s a big difference. Obviously, it goes beyond just making sure you don’t use Google and making sure you have the right hosting. The way how you code your pages is also important. That will be the main ones, making sure that there are not too many calls outside of the firewall because each time that there’s a call or query, it will slow down the whole thing. The majority is that when you use Google services, all of them are blocked and it will add 30 seconds in loading time.

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Does that mean you have to give up on having Facebook widgets?

Yes, but instead you can have WeChat widget and you have QQ, Weibo and all those social networks in China because, at the end of the day, those are not used in China anyway. There’s no point of offering these to your Chinese audience. On top of that from a technical perspective, you need to remove all of these.

You wouldn’t do that necessarily to your main global website because you have hopefully a large audience that’s using Facebook and all that?

Yes, 100% and I think you’re getting where a lot of people are realizing unfortunately afterwards. You need almost like the second website in China because the way how you optimize it to Google, where a lot of things are working in a similar way between Google and Baidu but it’s still different. The way how you optimize your website of Google would be different how you optimize it for Baidu. Even from a pure SEO perspective, which I know is your expertise, you need you to do things slightly differently. From a technical perspective, you absolutely need to have a separate website, a separate domain name, that’s an easy thing but separate websites, separate hosting. That’s where a lot of Western companies struggle especially international global companies because they do have usually all these on one single platform. I’m well-positioned to know that because I used to work for companies like these. It is difficult because they had to usually branch the code, recreate the whole thing in an environment that is 100% compliant with the Chinese. The market being so big and the price is so high that usually they don’t do that.

Would you recommend a domain name that ends in .cn so people know that it’s a China-specific website or is .com okay?

The .com is fine. It’s always a little bit better to have a .cn or a .com.cn. You do have a lot of .com. The .cn is always a bit better. It does literally add on the localized flavor. We never know all the elements that are taken into account by Baidu, but this is contributing a little bit. I don’t think in a similar way like a .fi, if you are in France, would be a bit better than a .com, but the .com would still work. The .com.au in Australia would be a little bit better as well. It’s the same thing here.

I’m curious, do you speak Mandarin?

I’m learning Mandarin. I order some dishes in Cantonese. I started to learn Mandarin. My business partners are both Chinese and based in Shanghai and Beijing, which is important. You need some people on the ground.

That’s the key thing. It’s very hard for somebody who doesn’t have somebody on the ground. How do you find somebody that you can trust that’s halfway around the world? It’s pretty scary.

One of them, you know very well, it’s Allen, who used to work with your company. He’s an amazing guy, like everyone who were working with you. He set up his company China. I’ve been working with him for quite some time as you. The other person is Dandan Cheng. She used to be my VP of China when I was at Orbitz. She’s an amazing person. She has been doing cross-border between China and the rest of the world for the last several years. She was the managing director of eBay China as well and she worked for quite a few management consulting firms. I was lucky to have these people that I’ve been working with quite some time that I know, that I trust. When I came up with this idea, they jumped on the wagon and said it was great.

I’ve had Allen on this podcast. We had an episode about Baidu primarily. Let’s talk a bit about the cultural issues and things like layout and design and how users think differently and navigate differently and what their expectations are based on their culture and what normal Chinese websites look like and how they function.

I can give you a few examples to illustrate how different it is. I would also be adding that things are changing in China. I’ve been working with this market for the last few years and I can definitely see that there are fewer differences between China and the West, which is interesting because four years ago, I would have never said that. There are still some differences. I believe it’s also because the whole online and digital space in China is fairly recent when you think about it. Search marketing started ten years ago, which is pretty young, and also eCommerce as well. It started to be more mature much more almost ten years after the US. This has contributed to the way how things were done differently. I don’t know if you remember twenty years ago, it was quite common to have all the results of your search opening in a new window. We didn’t have tabs at that time because the loading time was very slow and at the end of the session, you had how many windows open. It’s still the case in China. It has become like a browsing behavior in China to get this. That’s one of the big differences.

 

It’s not uncommon at the end of the browsing session in China the way you will have ten to twelve tabs open because each time that you click on the link it opens a new tab. This is coming from this experience of the loading time that was slow and in order to wait for the page to be loaded, they just keep browsing on the previous page. This has become a browsing behavior in China and that’s something that we don’t have here anymore. You never open a new tab unless you open a new website from the US perspective. Here within the same websites, you will have links that are opening in a new tab all the time. The colors will be different. The way the information is structured as well.

Usually, when you look at a Chinese website, you will probably notice that it looks busier. The simplified Chinese characters are playing a role there. There’s also not that much space for images, images being related to advertising in China. Until very recently, most sites were full of text, not a lot of images and extremely busy. This is changing because also a couple of years ago, China was not responsive. You had to have two different types of websites, one for mobile and another one for web. Now, this has become a common practice and China is moving to the responsive area. You’re starting to see more and more websites that have a similar structure to the one that we have in the West. This stripe structure where you have information that is below each structure. You have your horizontal sections. Now you have more and more websites like this in China. That’s where I can see some similarities.

Culturally, you will always have some differences like for instance, the CTA button form in China, it’s not uncommon that the latter would be in red. Something that is counterintuitive for us obviously because it would be more likely in green. Those elements remain because red is a nice color in China. These are some elements that you need to be aware of. The browsing behavior is different. The search as well, people are now typing but they are searching through links. It’s better to have access to the different categories through links rather than letting people who are searching. There are a bunch of different things that you need to be aware of when you adapt your website because localizing a website for China goes beyond just translating it into simplified Chinese. It is to adapt the colors, the usual behavior, the browsing behavior and so forth.

People are not typing in keywords into the search engines as much, they’re following links more in the Western world?

The way how they do it is similar to other countries in Asia where it’s phonetic. That’s the way how you usually use a keyword in China. They would be using Pinyin, which is the phonetic part of the Chinese characters. They won’t be typing the characters, they will be tapping the sound related to its characters. Then this will transform automatically into a simplified Chinese character. The problem is that sometimes, the phonetic doesn’t correspond to the character. For instance, I will give the example of Paris. It’s the same in Japan. I had this issue in Japan where Paris is Paris, but if you phonetically type in Paris, they will have Baly as the characters, which is different from Paris. Even from a travel environment that I’m very familiar with, to allow people to search phonetically is difficult because the name of the country or a city phonetically can be very similar but not the same character in either simplified Chinese in China or Katakana or Hiragana in Japan. That’s where the difference is.

You’re better off following a navigation structure where you start with choosing Asia or Europe and then going to the country and then going to the city, rather than typing it in phonetically?

Yes. That’s a reason why if you go on travel websites in China, whatever it is, Ctrip, Qunar or Mafengwo, you would have both because you still have some typing and you have tools that allow you to do that to transform the Pinyin into characters. You still have the older generation, my generation who would still be using the links in terms of browsing because that’s the behavior that they have been using for years.

Where does voice search fit in here? This is an up and coming area in the Western world and I would imagine that that’s going to be a way to get around the phonetic issues.

It’s even more popular than WeChat. It started as WhatsApp and now it’s much more than that. Originally it was WhatsApp, but people were not typing for the same reason, but they were recording the messages. Even before having the option on WhatsApp, you have it on WeChat and it was not uncommon to have people in the street talking to the phone to do messages and listening to what they were saying. This has evolved into search as well. It’s quite popular in China. One thing that has even went a bit further in terms of AI which is another topic but in terms of AI, the US is leading the way on every field compared to China except one, which is facial recognition.

China is far advanced from anyone else in terms of facial recognition. This is crazy and that’s the next stage of search of everything in China. Even payment, now you can pay with your face in China and then the vending machine. You have a lot of systems like these that have this facial recognition. Alipay, WeChat Pay, having their facial recognition and it’s working, which is very interesting. The main reason is the government has invested billion dollars in terms of AI facial recognition with all the surveillance systems that exist in China. That’s one of the domains where in terms of search, in terms of how you are interacting with the machine, the facial recognition is very advanced as well in China.

 

AI, in general, is something that the Chinese government is investing massively in.

If you look at all the different fields, the US is still ahead in most of them but one where you can see a gap between China and the rest of the world is AI facial recognition, which is super advanced. The facial recognition analyzed by artificial intelligence. AI is very important in China. From a tech and innovation perspective, that’s where the money goes right now in China.

It’s pretty scary though too because China’s human rights record is not very impressive. When they’re investing in facial recognition, people in the West like me are concerned. How is that going to be used to do things that are not very kind to its population? It makes me pause and think like, “Do I want to do some venture in China and be subjected to the scrutiny and potential for having my business shut down if they don’t like what I’m saying?” I’m sure it’s a sensitive topic and something that you would want to probably shy away from seeing as you operate in China.

I understand the concern and I think it is bad in the sense where if you decide to go after this market, you would have to comply with the laws and the regulations of this market. People like us, Westerners, we have been used to an environment with freedom of speech and access to information freely. It’s always a bit difficult for us to be aligned with that and completely appreciate it. I understand the concerns of many companies that are not willing to go after this market because they are not willing to comply with it. Like any market, you have to comply with the laws and the regulations if you want to work with this market. It is a sensitive topic and it does exist, and the surveillance and censorship exist in China. That’s the reason why you have a firewall. Even if you want to work in China but you are in one of those areas that are highly regulated, it is unlikely that you would be able to have information accessible from China. I always say for instance our technology allows you to be in China but if you are in media or newspapers, it is unlikely that you will be able to be in China because this is one of the most regulated areas in China. Those things exist.

What are some of the other more regulated industries in China besides newspapers and media?

There’s regulation. There are things that are forbidden as well. Gambling is forbidden in China. Pornography is also forbidden in China. It is impossible to access all this when you’re from China. Everything is blocked. There are areas that are highly-regulated so information and everything that’s content-related is highly regulated and you have other things that are completely forbidden.

What are the rules that you have to follow in terms of compliance? Is there a set of rules that are published on the web somewhere and you just have to tick all the boxes like, “Yes, I’ve done that, I’ve done that, I’ve done that,” or is it more complex than that?

It’s a little more complex than that. If you want to be 100% compliant, you usually need to go through the process of having what we call an ICP license, an Internet Content Provider license that allows you to publish in China. Having an ICP means that you complied with the Chinese regulation and you follow the rule. You do have terms that are sensitive in China and depending if you use them on WeChat or Weibo for instance on those platforms, it’s most likely that these contents can trigger alerts and the post can disappear from nowhere because they are topics that are highly regulated. I wouldn’t say that you can find those leads everywhere, but those terms are usually known and it’s not difficult. If China, for instance, has a disagreement with one country, then obviously those terms will be more sensitive and you need to be aware of it if you want your content to be published in China.

Is an ICP license something that you have to pay for? Is it something you have to renew every year?

You have to apply for it. Usually, you need to have a Chinese business license. You need to set up an entity in China. It used to be very difficult to do that but it’s easier now. You have what we call the WOLFE, Wholly-Owned Foreign Entity in the free trade zones organized by China in Shanghai or Beijing. You can apply for those licenses. Once you have a Chinese business license, you can apply for these ICP and once you have these ICP, you can display these on your websites. If you go on a Chinese website, you will have an ICP number, which is the license that you need to have in order to publish content in China. If you are outside of China, you are not obliged to have an ICP. This is only when you are within China. You don’t have a guarantee that your content will be published if you’re outside of China. That’s the thing. They can be blocked by the firewall.

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Would you recommend that if somebody is outside of China, they don’t need the ICP license but they should probably get hosting in China?

You can’t be hosted in China if you don’t have an ICP license. That’s one thing. The only alternative is to go through a platform like ours, which is 100% optimized and compliant with the regulation in China in order to be published in China. We can host our clients in China because we have a company in China but we are not allowed to do it if you don’t have an ICP. We can’t host you in China if you don’t have an ICP. That’s illegal to do that.

In order to use your technology, do you need to apply for an ICP license then?

No, you don’t because it’s not hosted in China. You can and in this case, we could host you in China. If you don’t have an ICP license, then we will host you in servers that are outside China, in South Korea or Hong Kong for instance.

If somebody could apply for an ICP license and they get hosted in China using your technology platform, would you encourage that or would you say, “No, it’s totally fine to be hosting in South Korea or Hong Kong?”

It’s always better to be hosted in China because you would always be visible. The best is to be hosted in China. The best is to go through the whole process, but a lot of companies don’t have the time or money to do that. It costs a certain amount of money to set up your business license, you need to apply for an ICP license. Then you need to have servers in China. You need to engage with the agency on the ground. Building just a simple website can cost you a total of $50,000 and a lot of companies like SMEs and SMBs in particular, don’t have this type of budget to test the waters and see if China could be a potential market for them.

From a performance perspective, it’s the best. If you are 100% in China, there shouldn’t be any problem but only big companies can afford it when you put all this together. Sometimes there’s no choice than not be who is in-charge because they simply don’t have time and money to do it. If you do, my advice would be to do it because it’s better you’re in China. At the end of the day, if you want to go after this market, you probably will have to do at a certain stage because companies that are sending a lot to Chinese customers will need to do it from inside China and they will need to go through this process of applying for the right licenses.

Let’s talk about the technology platform that you have.

The idea was originally to recreate all the marketing tools that we have access to, online digital marketing tools that we had access to in the US or elsewhere. When you want to create a website, nowadays you can use Wix or SquareSpace. When you want to track your performance and optimize it for Google, you go to Moz or BrightEdge. When you want to run your campaigns and manage your followers and your content on social, you could use HootSuite. You have tools like these that have been helping and democratizing the whole thing towards SMEs in the West. As soon as you want to go into China, the only tools that you have are Chinese and for a Chinese audience and not adapted to countries like the US or Australia. I said to myself, “How can we have something where we will be recreating all those tools but combining it into a single marketing platform where you don’t have to jump from one tool to another one?” This is Sinorbis.com. This is what we are offering.

We recreated all those tools into one single marketing platform that allows you to create your website very easily with the drag and drop interface similar to the names that I mentioned, Squarespace or Wix. These websites are surely not available in China. They’re not working in China. We recreated the same thing as Moz but for China and it works for Baidu, Sogou, 360 and Shenma. The four major search engines and on desktop and mobile. We recreated also a platform for WeChat where you can manage your content. You can create your chatbots. You can manage your followers. You could target the audience. Things that you can do outside of China, you can now do it within China through our platform. Western companies, we have tools that are for Westerners. The whole interface is in English. We are the first all-in-one digital marketing platform for China.

You can build a site like Wix and SquareSpace with a drag and drop interface and not speak Chinese?

Yes, you can. My advice would be that it’s better because at the end of the day, automated translation is not 100% accurate. We do offer automated translation as well. Depending on the context, if at a keyword level or if you don’t have a lot of contexts, it is quite easy and quite accurate to use a platform. If you like poems or long text, long-form post, we always advise having a native speaker who could read and put this back into context. For instance, I wanted to prove the concept about myself. I’m learning Chinese but I’m definitely not putting it to work. I can write or read easily. My sister who is a movie director wanted to have a website that was visible in China so I built it using my platform. If you go on her website, you will see that she gave me the content in Chinese and I was able to do the whole thing very easily. It is possible to do it. It’s better to have someone who speaks Chinese and can read what you are doing but it is possible.

 

Would you mind sharing the URL for your sister’s website that you built and made available in China?

It’s CarolineChu.cn

Thanks for sharing that. Let’s say that you want to take payments, WeChat platform has what we call WePay.

The official name is Tencent Pay but everyone in China calls it WeChat Pay. WeChat Pay and Tencent Pay is the same thing.

Does your platform facilitate receiving payments with that too?

Not yet. We launched that platform a year ago and what we allow now is web search and social. Then we would be adding a component for lead generation and eCommerce next year because there’s a huge demand for that. Right now, we don’t. What our content is doing is they’re redirecting to one of those marketplaces in China such as Tmall, Vip or Jingdong. Those are the equivalent of Amazon in China. We don’t accept, but we will in the near future.

Let’s go back to this topic of optimizing for Baidu because we didn’t really dig into any of the details on that. How different is it in your mind from optimizing for Google?

The basics are the same between Baidu and Google. The on-page optimization elements would be very similar like having your keyword phrases across your headings and contents and alt tags. Everything that you do to optimize your pages and your URLs. All of these would be very similar. The loading time is very important. If you are hosted outside of China without being optimized, it’s most likely that you’re not going to rank very well. If you have an ICP for instance and you displayed the ICP on your page, it will be also taken into account by Baidu as an element of being localized from China. You would be ranking higher. Being in simplified Chinese and not having any English on your website will be another element, .cn will be another element. Those are quite similar to Google but obviously, there are some specificities to China.

One difference is Baidu still put a lot of emphasis on the number of links rather than the authority of the sites that are linking back to your sites. That’s also one of the reasons why it is better to have a different site for China because Baidu would consider this as positive if you have a ton of links back. If you do too much, Google would consider that as indexing. I experienced this in one of my first sites where we had to do things differently because it’s quite a good thing to have a load of links back to your site and Baidu whatever the quality of those things. Obviously, it’s something that you should be very careful with Google. You have some differences like this that are quite important to be aware of.

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Is there an equivalent to The Art of SEO in China? An equivalent to my book that somebody who wants to optimize for Baidu can just read and follow the instructions.

Yes, there’s one. I believe that Allen contributed to the translation. I don’t know if he mentioned this while he was talking to you but he shared it to me last time I was in Beijing. There’s a book that was translated and adapted to China, which would be the equivalent of yours I believe but obviously not reading Chinese, I haven’t been able to confirm that. That is something that you could ask Allen for.

This is possibly a The Art of SEO translation in Chinese. If I can find it, I’ll talk to Allen about it. I just got a copy of The Art of SEO translated into Russian as the third edition. It’s got the orange cover with the hummingbird instead of the green cover. It’s in Russian. I have no idea what it says but assuming that it’s good stuff. What about social media marketing and social media optimization? How is that different and what are some best practices in regards to that?

The big difference being in environments such as WeChat, WeChat is not Facebook. WeChat has everything. WeChat released WeChat Search and it allows you to search across all the different environments of WeChat. You can search across all the posts, the moments. The moments are the equivalent of the walls but also their WeChat accounts which are official accounts that I incorporate into their Facebook pages and across the mini-programs. The mini-programs are mini apps that you can use and play within the WeChat environment without having to download anything. That’s unique to these environments. You use WeChat so you can actually search across that. They created this massive search that is actually competing against the web search. It’s competing against Baidu.

The purpose of companies such as WeChat is to create what I believe has always been the objective of Facebook. Facebook never managed to create a separate completely different online ecosystem to the web. You still have a lot of interaction between the web and Facebook. While in WeChat, you can stay your whole day on WeChat without having to leave yet because it’s a different ecosystem. Now they added Search and now people are able to search through WeChat without having to go on Baidu. This is a big thing, and this is quite different from what we see in the West. In terms of social media optimization, you need to understand this is fairly new again. You do have a lot of experimentation right now but nothing that it’s completely firm and known.

You have people like us who are analyzing and trying to understand better and better how the algorithm works on WeChat because what is displayed first when you look for friends. Digital marketing in Chinese on WeChat, what is displayed first? Usually, it’s always an official account verified that is your official account that was officially created by the company. These are very important because in China, with all these issues that we have around fakes and trust, having a verified official account is very important. Chinese consumers know that this happens a lot in China and they would always be checking who you are, what you’re doing and if all this is legit because you can have ten fake accounts or one official. They will definitely check that.

This is definitely taken into account on the search results. Only the verified official accounts will be displayed on the social search results. The content usually, they first scan your inner circle, the guys who are connected to you through WeChat and their moments and see if the keywords that you are searching for are displayed in those moments. There’s a way how you can understand what is displayed and usually, there’s an occasional slot. Let’s say that you have ten results on the results page for your WeChat search, the first few would be the official accounts. One would be your inner-circle moments and then you would have a sponsor. You can understand it’s working differently than the web environment. It’s still new but you have a different way to optimize it.

Is WeChat the only game in town as far as social media or should you do other social media optimizations like Facebook and LinkedIn and Twitter over here?

WeChat is by far the largest. They have 1.1 billion users. It was representing 30% of all the time spent on mobile in China in 2017. It contributed to 1.7 billion in lifestyle spending in China. It is by far the largest, but you do have Weibo that is very popular. They have around 400 million users. They’re still a significant player. Weibo is the equivalent of Twitter. I don’t like actually you say that it’s the Chinese Twitter. I find it more like Twitter on steroids. It’s more a hybrid between Facebook and Twitter. You’re still limited in terms of a number of characters in your post, which is similar to Twitter, but you can do much more things than Twitter. You have different ways to optimize it on Weibo for instance or other social networks similar to the web.

 

One thing that is extremely popular in China and is coming in the West as well. I don’t think it as democratized as it is in China. They’re social influencers and KOLs. You can use the social influencers and people are using it here and you have a few platforms. In China, you have literally marketplaces with millions of KOLs and you categorize it by the amount that you want to spend, topics, followers that they have. It is extremely sophisticated and KOLs are extremely used in China. It’s one way you can promote and optimize your content for social. You have Qzone and that is another social network similar to the ones that I mentioned. It belongs to Tencent as well. It’s from the original chat app called QQ. If you have a QQ account, you could have a Qzone page that would be similar to Myspace, I would say. You have quite a few ones. You have Xiao Hong Shu, which is Little Red Book where it’s like Pinterest/Content social network. You have quite a few different ones and each of them has different ways how you need to optimize or what’s the best way to promote your content.

Video streaming is getting there as well in China now. It’s extremely popular and it’s something that people are looking at more and more to target Chinese consumers. You have the equivalent of Musical.ly that exists in the US. You have that in China that is really popular now in the younger generation, the next generation after the Millennials. It’s a whole new world. It requires to analyze everything and understand how it works. What is also overwhelming is that you have something new every quarter. It’s an environment that is evolving so fast and quickly. Even for someone like me who has been in the digital space for twenty years, I need to keep up with what’s happening in China. It is crazy and mind-blowing how fast things go in China.

You said the keywords are everything on social platforms like Weibo. You’re referring to like hashtags essentially, right?

Yes.

Is there some marketplace to find influencers and how much they charge and what you get for that?

It’s what I was explaining. It’s very advanced and very sophisticated in China. We call the influencers KOLs. It stands for Key Opinion Leaders. You have a keyword for everything and you can find those through marketplaces and those are much more advanced than the ones that I’ve seen in the West. It’s like a search engine marketplace where you can find any type of KOLs everywhere in China depending on the topic, your amount of money and the type of followers. You can segment it. It’s very advanced and you have quite a few of them. You have three or four big platforms in China that are offering that. Every agency in China is leveraging to find KOLs. Obviously, you have the top KOLs such as Fan Bingbing, the actress or Huang Xiaoming, the actor, but these guys are like Ashton Kutcher in the US. You don’t go through a platform to have access to them. They have their own marketing teams. For the rest, you have those marketplaces and it’s very advanced and used by everyone. It’s a common practice. If you want to post something, you can find the right KOLs to promote your content.

That clarifies things because when you were saying KOLs, I didn’t know that term. I was thinking you are saying keywords and hashtags but you’re talking about key opinion leaders and that’s the influencer that you want to essentially pay to hack your product. What’s the name of one of those platforms?

They are particularly Chinese names. There are one or two that are international but they’re very small. The big ones that are using are Chinese.

 

You mentioned video streaming and services that are equivalent to Musical.ly, which is a site here in the states that have a lot of teenagers are into. Is there a service like Rev.com for getting transcriptions done on videos and audios? Is there an equivalence in China for that? If I sent something that was in Chinese, I’d get a transcript back or even better, a translation so I could send it in English? It wouldn’t be automated, it would be humans who are doing the translation. In Rev.com, there are humans behind that who are doing the transcription, not an algorithm. Is there an equivalent?

Yes, there are quite a few and I know that because we use them. What is interesting is that you will always have a similar service in China, but then at the beginning, it’s the same and then after a few years, it becomes like its own service. They start adding things that you can’t have in the US. That’s what I’ve noticed over the last two years. Each time, it’s the same pattern. You have the service in the US and then the same service is launched in China. After a few years, then it becomes a completely different system and then the service in the US is now trying to look into what is happening in China, which is interesting. WeChat is another example. It used to be like a WhatsApp and now Facebook Messenger and Facebook are trying to recreate what’s happening in the WeChat environment. There are a lot of features that were added over the last few years on Facebook were coming from WeChat. It’s quite interesting to see that. Going back to your question, absolutely there are. I’m not using them that much, but I know that we used some in the past, so I can confirm they exist. I know that they would most likely evolve into different ways to the ones that you are using in the US after a few years. That’s what is really exciting and interesting to see.

How does one get WeChat-verified? If it’s so important to your position and the WeChat search results, if it’s very important to build trust and comfort with the consumers that you are verified, is that an easy process? With getting Facebook-verified or Twitter-verified, it’s almost impossible unless you are a big-name influencer. It was a huge deal for me to get Twitter-verified. I’m excited that I am but I’m still not Facebook-verified, and I don’t even know who I would tap to get that help to get Facebook-verified. What’s the process for WeChat verification?

Before you had the possibility to create only either a domestic official WeChat account or an international one, the domestic one is one that you can create only if you have a Chinese business license. With this domestic WeChat official account, you can target both WeChat users in China or the ones who are outside of China. By the way, out of the 1.1 billion users, you already have 300 million outside of China. You have quite a few uses out of China now. You can have access to all the features. It is very easy. It takes a couple of weeks to do it and doesn’t cost much but you need to have a Chinese business license. Most Western companies don’t. Until very recently, the only other option was to create what we call an international account. The international account you can credit with your American business license number. The problem is that you’re limited in terms of features. You don’t have a lot of features. You need to have at least 500 followers to be verified. If you saw a lot of companies that are starting that don’t even have that number of followers. Three, you can’t target Chinese consumers in China but only the Chinese users of WeChat outside of China. It was quite limited, and a lot of people were willing to go or the domestic path but because they didn’t have a license, you could borrow things from a third-party company in China. You could use that. That was not obviously legal but a lot of people did that. Tencent released a new type of account called the universal accounts and those are accounts where you can open with your international business license, but you can still target domestic users in China.

The differences are that you are limited in terms of features but it’s still quite good compared to the international ones. The process is a little bit more cumbersome. It takes up to two to three months in order to go through to do paperwork verification. It’s quite a lengthy process and you need to go through a certified partner of Tencent. For instance, we are one of them. That’s what we do as part of when someone is subscribing to our platform and have access to the WeChat tool, on top that, what they can do is open a universal official account for them with their business license. It is a little bit easier than Facebook and Twitter, depending if you have a Chinese business license or not. As most international companies, they don’t. It is not that easy. It’s more expensive. It takes more time and you have to go through third parties to do it. You can’t do it yourself.

What a different world this is. This is an exciting time to be alive.

I don’t know if you heard from the first Google CEO, which is very relevant. He was saying that over the next ten years, things are going to shift and people we will have to get used to two internets. There would be the American-led internet. The one that we’ve been used to for the last twenty years and you have the Chinese-led internet. I believe in it because I’m obviously experiencing this every day. China is so big that you can’t just do without. If people are willing to go out of this market, then they will have to make sure that they are visible, and they understand this ecosystem that is really different from what we have been using for years.

 

If somebody wanted to work with you, sign up with your platform or get assistance with getting into the Chinese market, how would they get in touch?

I’m in Sinorbis.com. You have everything on our website. You can even subscribe and you can request it online. We already have 30% of our clients that are coming from outside of Australia despite the fact that we launched a year ago. We have quite a few clients from the US who joined. It’s very easy. You can go into Sinorbis.com. You can request a demo. Someone will do a demo of the platform. You can subscribe. If you want some help, you will be on-boarded and trained on the platform but if you need some help to build pages or create an account or manage your followers or configure your chatbots, we will offer some premium services on top as well.

The idea is that at the end of the day, we want to make it easy, as easy as if it was in the US. I always say to our clients, if you can do it yourself, you can use a platform and do it and that’s it. If you want us to do a part of it, we can. If you want us to do everything, we can. We are not trying to do as much as possible because we are first and foremost a software company, but we realized that if we want our customers to be successful in China, usually we need to provide some services on top and that’s what we’re doing. Because we had the expertise through my own experience, Allen’s or Dandan, we restarted to provide those premium services on top of the platform to help our clients.

What a lot of people are doing is the first year they say, “We want to go after China. It’s a test market right now and we’re not going to hire a full team here. Can you take care of the first year and if it works, then I would be hiring people and then bringing everything in-house and still using the platform?” That’s a model that we like because that’s the best way to go to this market at a fraction of the cost within weeks where it was taking months and years before and be fully in control and full visibility, which is the most important thing when you go after China.

You don’t have to be in China. Like I would never move to China, but I might want to have a Chinese presence and this is the bridge that makes it happen.

We are closing the gap between China and the rest of the world and you don’t need to be in China. That’s a big plus of our technology.

Thank you, Nicolas. Thank you, everyone. It’s time to take what you’ve learned and apply it in your business or in whatever venture you’re doing so that you can reach this second internet and a huge market of billions of people. We’ll catch you on the next episode of Marketing Speak.

Important Links:

Your Checklist of Actions to Take

☑ Gain visibility in China’s online market by building a website that’s 100% compliant. I can go through the process of having the ICP license, Internet Content Provider license. Having this license allows me to publish in China and also means that I have complied with the Chinese rules and regulations.
☑ Build my website’s foundation using my resources or leveraging technology that Nicolas’ company offers to optimize it for all the search engines such as Baidu, Sogou, 360, Shenma and managing your followers on WeChat.
☑Have an understanding of the reason why most websites don’t have the visibility in China concerning hosting, regarding scripts that are being used, regarding optimization for Google.
☑Recognize that there’s a difference in optimizing a website for Google and Baidu. Nicolas says that from a technical viewpoint, you must have a separate website and a separate hosting.
☑ Don’t just focus on merely translating my website into simplified Chinese. It must be able to adapt the colors, the usual behavior, the browsing behavior and many more.
☑ Have an open mind should I decide to go forth with this venture wherein I have to comply with the laws and the regulations of this market.
☑ Be informed of the regulated industries in China which are newspapers, media, gambling, and pornography. Nicolas mentions that it is impossible to access all this when you’re from China.
☑ Set up an entity and have a business license to apply for the ICP license. Alternatively, I can host on Nicolas’ platform called Sinorbis.com where they would have the capacity to use servers that are outside of China, like South Korea or Hong Kong.
☑ Know the importance of keywords on social platforms like Weibo. I can also find influencers to promote my content called KOLs or Key Opinion Leaders.
☑ Be aware of WeChat verification processes. To create a domestic account, I must have a Chinese business license. To have an international account, I can use my American business license number but with limited features and requires at least 500 followers to be verified. I also can’t look for Chinese consumers in China but only the Chinese users of WeChat outside of China.

About Nicolas Chu

A global digital thought-leader, Nicolas Chu has extensive experience in managing technology businesses, from start-ups to large corporates in Europe, the US and Asia Pacific. He is the CEO and founder of Sinorbis, the multi-award-winning company that revolutionizes the way businesses and organizations enter the Chinese market through technology. He is an active investor and mentor for a number of technology and digital initiatives in Australia and also serves as a board director of several companies and organizations. Recently, he was the global President of HotelClub and Ebookers, two leading global online companies operating in more than 30 markets with an annual turnover of US$2.5 billion. HotelClub and Ebookers were part of Orbitz Worldwide, which was recently acquired by Expedia Inc. for US1.6bn.