The VUCA behind China Consumer Market – The change & impact on Info Connection

It is critical to accumulate ‘competitive edge’ for anyone who want to win in business. In consumer goods, the ability of producing products and managing offline distribution is something relatively easy to codify, scale up and hold. But ability on understand consumer needs and ‘control shopping traffic’ is different. The first one sits with talented individuals while the other belongs to ‘platform’ (or say, ‘market’). In offline world there is a layer called ‘relationship’ for company to leverage. When things get digitalized, it turns to ‘algorithm’ which the platform has much more power to control. This is also the reason those who blindly believed eCom platform’s brand building propaganda quickly lost their business once there is little ‘shopping traffic tide’ to play with.

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For consumer goods manufactures, the leverage sits with ‘brand’ more than any time before, but due to the big change on the other half of “connection side”, it seems even more difficult to figure out. Answer sits in the evolvement of “information connection”, as it sets the physical playground for advertising, which is the most important brand building method for many categories.

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Again let’s take a look on major events happened in China in this area. Color TV became popular at western world since 1950s, and enter into China at 80s. This is a period when the key word for information connection is “BROADCAST”. At 1994 the establishment of CNNIC marks the day China move into digital. Following that first wave of digital giants started right before millennium. Most of them provides information connection service through ‘SEARCH’. Such connection still much less than broadcasting in terms of volume, but peaks when one has a particular need to address – say buying something surfaces in his mind. Seeing this, Taobao started 2003 & Tmall established at 2008. Then during 2005-2015 the digital ‘BRODCAST’ players raised and overtook traditional TV station (due to both tech & corp governance system reason). Later at 2014/15 China start to promote 4G/5G, enables a bit boost of smartphone. With such platforms like Douyin(China Tiktok), Red & Tencent Vlog start to thrive – they all build on connect through an algorithm based on interest with some search.

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So key points regarding how info connects in China:

till 2015 – BROADCAST, with a digital upgrade at last 10 years

SEARCH starts from 2000, raise like crazy since ~2010 with shopping need better addressed, look like going to wash out everything, till…

From 2015, INTEREST algorithm became popular and put SEARCH to where it should belong to – when one has a very specific functional need; and unleash the needs seeking tailored content from BROADCAST

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The foundation for Advertising – How info Connects – now split into 3: BROADCAST, SEARCH, INTEREST; all with huge scale but cut into same 1.4 billion population. This creates big challenges like judge the strategic fitness with business nature (consumer needs), and a clear & firm mind regarding marketing philosophy. On how to realize advertising and marketing on top of this, it actually knocks down existing player’s company structure, which is also the root issue resulting most 4As and consumer goods giants’ soft performance in China market recent years. But before start explain that in detail, it is necessary to re-look how the classical 4Ps or 6Ps connects in real business context, instead of just marketing context.