International Digital Marketing in China

Regional Characteristics and Global Challenges
Palgrave Pivot (Verlag)
  • erscheint ca. am 31. März 2021
  • Buch
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  • Softcover
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  • XV, 99 Seiten
978-3-030-38162-2 (ISBN)

This book examines key issues in international digital marketing in China from a theoretical and empirical perspective. Divided into two main parts, it begins with an analysis of China's cultural characteristics and business environment, with a particular emphasis on the Chinese digital context. The book goes on to present original empirical studies and an investigation into recent challenges and opportunities for international firms in the fashion sector.

With nearly 900 million internet users and an e-commerce market volume of over one thousand billion US dollars, China is the world's largest digital market. While this creates significant opportunities for international firms, there are many factors to consider when approaching this market. In order to understand the Chinese digital scenario, the book analyzes the characteristics of local internet platforms and consumer patterns.

The book also presents a real-world case study on a luxury retail firm operating in China,
Florentia Village, and the results from a questionnaire on Chinese mobile shoppers. On this basis, it provides a conceptual framework and discusses the theoretical and managerial implications for international firms operating in China, making it an enlightening book for scholars, students, and practitioners alike.

1st ed. 2020
  • Englisch
  • Cham
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  • Schweiz
Springer International Publishing
  • Für Beruf und Forschung
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  • Für höhere Schule und Studium
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  • Für die Erwachsenenbildung
  • 5
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  • 5 s/w Abbildungen, 5 farbige Abbildungen
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  • 5 Illustrations, color; 5 Illustrations, black and white; XV, 99 p. 10 illus., 5 illus. in color.
  • Höhe: 21 cm
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  • Breite: 14.8 cm
978-3-030-38162-2 (9783030381622)
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Lala Hu is Assistant Professor of Marketing at the Catholic University of Milan, Italy, where she teaches Marketing, Marketing Management, and International Marketing. Previously, Dr. Hu was Postdoctoral Researcher and Adjunct Professor at Ca' Foscari University of Venice.

She has been a Visiting Scholar at several universities worldwide, including the Kellogg School of Management (Northwestern University, USA), Tongji University (Shanghai), and UIBE Beijing. She has been an Invited Lecturer at King's College London, Department of Digital Humanities.

Her research has been published in book chapters and peer-reviewed journals, including the European Business Review, the British Food Journal, the International Journal of Emerging Markets, and the Australasian Marketing Journal. She also writes for the online editions of WIRED and the leading Italian newspaper Corriere della Sera.

- Introduction

The introduction will present the subject and the structure of the book, and will make the case for the study of China in international marketing. It will contain a brief summary of each chapter in order to provide context and offer the interpretation key to the book.

China is the first digital market in the world, offering many opportunities for international firms from various sectors. However, it still represents a complex market from the international marketing point of view due to the uniqueness of its digital scenario, cultural and environmental characteristics, including local institutional voids and regional heterogeneity (Hu, 2018; Jiang & Prater, 2002). Moreover, in China competition has recently increased due to the slowing economy and the emergence of Chinese firms, which are becoming innovation leaders, in particular in the digital sector.

The relevance and specificity of the Chinese market motivate this project, which aims at discussing the main characteristics of the cultural and business environment in China under an international marketing perspective. Moreover, the recent empirical studies will provide managerial implications for international firms that operate in this market. Despite the growing importance of online platforms (mobile platforms, in particular), digital tools as well as physical stores should be managed within a coherent international marketing strategy, which keeps into consideration the specific characteristics and channels of the market.

- Chapter 1: China's marketing macro environment : Cultural characteristics and regional heterogeneity

This chapter analyses the relevant literature concerning the main environmental characteristics of contemporary Chinese market that impact its distribution system and hinder the international marketing strategies of foreign firms in China.

They include: institutional voids, internal heterogeneity, and a fragmented system (Hu, 2018; Jiang & Prater, 2002; Khanna & Palepu, 2000). Institutional voids depend on the lack of reliable information on the market, an inefficient system of intermediaries and unpredictable government actions (Khanna and Palepu, 2000); the internal heterogeneity (Ma, Tong, & Fitza, 2013) has been influenced by an unequal development within the territory, which has favoured the Eastern coastal areas over the rural and Western regions (Cui & Liu, 2000; Walters & Samiee, 2003); regarding fragmentation, it is influenced by the centrally planned city-tier system (Jiang & Prater, 2002).

A more recent characteristic is represented by the fact that China has become the setting for reverse innovation (Govindarajan & Ramamurti, 2011). Over the past few decades, Chinese firms have leapfrogged to the technologically mature phase of the web by surpassing foreign rivals from more traditional markets (Checchinato et al., 2017). Chinese firms, digital firms in particular, have introduced innovation technologies (for example, online payment systems or face scanning systems) ahead of Western competitors. As consequence, even Western multinationals - including Silicon Valley giants such as Apple and Facebook - have started to imitate some of these innovations (Lin, 2017). These innovations pose opportunities for foreign firms as digital channels create opportunities to communicate with their target, however, they also create challenges due to their specificity, which will be analysed in Chapter 3.

Major headings:

· Main characteristics of the Chinese distribution system

o Institutional voids

o Regional heterogeneity

o A fragmented distribution system

· China as innovation leader

- Chapter 2: The characteristics of the Chinese digital market

China's digital economy represents a leading global force (Woetzel et al., 2017). It is the country with the highest number of Internet users in the world and also the largest e-commerce market with revenues of 718 billion USD (Statista, 2019). As of December 2017, China had 802 million Internet users, of which 98.25% of the total (788 million users) was mobile users (CNNIC, 2018). Regarding online sales, in 2018 they reached about $1.33 trillion, an increase of 23.90% compared with 2017 (National Bureau of Statistics of China, 2019).

The relevance of the Chinese digital sector is given by the opportunities but also challenges for foreign firms that want to approach this market.

As Western platforms are blocked, the Chinese Internet sector is dominated by local firms (for example, Tencent and Alibaba), which are characterised by different consumer interactions and tools (Negro, 2017). However, censorship of Western Internet players is not the only reason of the differences encountered in the Chinese digital environment. A main role is played by the national culture, which influences firms' promotional practices and communication (Men & Tsai, 2012) and consumer behaviour. For example, Chinese users strongly rely on e-WOM information and share their experiences because of the social pressure (Besbes et al., 2016; Christodoulides et al., 2012). Chinese culture is analysed using Hofstede's (1990) cultural dimensions' theory.

Culture also has an impact on the Chinese distribution system, which is considered to be one of the most critical determinants of business success due to its fragmentation and complexity (Hu, 2018; Jiang & Prater, 2002). While the Internet has helped to overcome some shortcomings of the Chinese distribution system particularly in rural areas, relationships (guanxi) still facilitate e-commerce availability of products (Towers & Xu, 2016)

Major headings:

China: A digital global force

The characteristics of the Chinese Internet

The role of culture

Distribution channels in China

- Chapter 3: Chinese digital and mobile platforms

The third chapter will focus on the Chinese digital sector, in particular it will analyse the role of online platforms to communicate international brands to Chinese consumers.

Over the past few years, the Internet has profoundly affected customer experience and how customers interact with and respond to offerings (Kumar & Anjaly, 2017). Nowadays, digital and social media represent relevant touch points that contribute to shape the customer journey and allow consumers to engage more with firms (Leeflang et al., 2014; Kim & Ko, 2012; Verhoef, Reinartz, & Krafft, 2010).

In particular, digital media play a primary role in China, which has the highest revenues in the e-commerce sector worldwide. Indeed, China's e-commerce value is S$718.389bn as opposed to the United States' volume of $547.690bn (Statista, 2019). Another characteristic of the Chinese market is represented by mobile retailing, which accounts for 75.35% of total Internet sales as of 2017 (Euromonitor International, 2018). Foreign firms that want to approach Chinese consumers must take into consideration the specificity of the Chinese Internet in order to develop effective marketing strategies.

An analysis of the Chinese digital landscape and main actors (e.g., Alibaba, Tencent, Baidu etc.) will be carried out, considering local and foreign platforms and the main characteristics of Chinese Internet users.

A particular focus will be devoted to mobile Internet, as 98.25% of total Chinese users access the Internet through mobile devices (CNNIC, 2018), analysing mobile commerce (m-commerce) characteristics and mobile payments systems.

Compared to traditional marketing, mobile marketing has specific features, such as interactivity, convenience, personalisation, and effectiveness (Huang et al., 2019). Moreover, mobile payments can improve the purchase efficiency and convenience as consumers can purchase anytime and anywhere, resulting in a more flexible and fluent experience (Chi, 2018; McLean et al., 2018).

Major headings:

· Main players of the Chinese digital sector

o Local platforms

o Foreign platforms

o Chinese netizens

Mobile Internet in China

o M-commerce

o Mobile payments

- Chapter 4: Luxury and fashion retailing in China: The case of Florentia Village

The chapter represents an empirical study on customer journey and m-commerce in the fashion sector in China.

Despite the relevance of China in the global commerce, studies on the customer journey in such market are still scant. Therefore, the present research aims at analysing the role and the impact of digital touch points (and mobile touch points, in particular) on the customer journey in China focusing on the fashion sector, the segment with the highest e-commerce revenues in 2018 (Statista, 2019).

In order to understand the role of digital platforms in the marketing strategies of international firms in China, an empirical research was carried out interviewing managers working for leading Chinese digital platforms, including Alibaba Italy, a trusted partner of Tencent, and another Chinese digital platform. Then, to investigate the impact of mobile touch points, a consumer survey was collected.

For the consumer-side, the main research questions are: 1. What are the drivers of the use of mobile commerce in China? 2. What are the effects of the use of m-commerce in China?

The technology acceptance model (TAM) (Davis, 1989) is adopted in order to investigate antecedents of m-commerce adoption. The items used derive from recent studies on e-commerce and m-commerce and include: utilitarian factors - i.e. customization, convenience, and ease of use, and enjoyment (Kumar & Anjaly, 2017; McLean et al., 2018; Natarajan et al., 2017; Rose et al., 2012).

As consumers, especially Millennials, are willing to share their experience through personal evaluations of purchased products on online platforms, thus facilitating word-of-mouth communication (Chen, Fay, & Wang, 2013; Mangold & Smith, 2012), e-WOM (electronic word-of-mouth) effects are also investigated.

A survey among Chinese consumers is carried out focusing on fashion products and results are analysed using Structural equation modeling (SEM).

Major headings:

The customer journey in China

The role of digital and mobile touch points

Chinese consumers and m-commerce

  • Introduction to the survey
  • Methodology and data collection
  • Results

- Chapter 5: Mobile commerce in the fashion sector in China

While the previous chapter mainly focuses on the consumer side, Chapter 5 deals with the retailing strategies adopted by international fashion firms operating in China discussing an original case study, Florentia Village.

The aim of this chapter is to analyse the issues for retailers in a highly digitalized market such as China, which represents the most growing market for luxury products at the same time (Bain & Company, 2018). Over the past few decades, retailing has been revolutionized by technology innovations, which have introduced new ways of selling products and engage consumers (Grewal, Roggeveen, & Nordfält, 2017). There is been a move from multi-channel retailing, where channels are developed and managed separately within firms, to omni-channel retailing, where customer experience is modelled across different touchpoints and channels (Verhoef, Kannan, & Inman, 2015).

Scholars have pointed out that even if some sectors such as the fashion industry have been slow in e-commerce adoption as it is difficult to translate the in-store experience to the online environment (Blázquez, 2014), nowadays fashion brands adopt an omni-channel vision that customers to research and shop anytime and anywhere (Hansen & Sia, 2015). A case study of a successful Italian luxury designer outlet operating in Mainland China and Hong Kong, Florentia Village, is analysed. Data consist of semi-structured interviews with the firm's managers and store visits between 2012 and 2018, triangulated with secondary data.

The study contributes to the literature on retailing as previous studies have not analysed the effect of the growing Internet retailing on the strategies of luxury retailers in the Chinese market.

Major headings:

Retailing in China

The Florentia Village case study

  • Overview of the company
  • Country of origin and the Italian style

Omni-channel strategies

- Chapter 6: The mobile customer journey in China: Implications and future research

The final chapter will outline the conclusions from the empirical studies of the previous two chapters. It will discuss main managerial implications for international companies operating in China, in particular concerning the management of digital and mobile channels within a marketing strategy.

Based on the studies' results, the authors presents a conceptual framework for the development of international marketing strategies' of fashion firms in China, which identifies the key issues to be considered in managing effective marketing activities in the Chinese market. The empirical studies suggest that despite the growing relevance of the Internet, international marketing strategies should focus on building a strong brand image that leverages on the integration of online and offline channels, including physical stores that enhance consumer engagement and mobile platforms that facilitate personalisation the customer experience and eWOM diffusion. Moreover, despite the growing similarity between Chinese and Western consumers (especially among young generations), strategies should consider the specificity of the market (from environmental and cultural perspectives) and an increasing competitive environment, in which Chinese firms have become innovation leaders. The project also contributes to the recent literature on the customer journey in China, a setting little investigated so far yet with a vast growth potential (Jiang et al., 2017).

The book also sets the ground for future research in the field of international marketing and digital marketing. As one weakness of this proposal is represented by the fact that it does not analyse firms' international strategies and consumers in markets other than China, in the future research findings from these studies should be compared with the ones from Western markets, but also from other Asian countries, where consumers share more similar cultural characteristics with Chinese ones'.

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