Social Commerce in China Teaches Advertisers to STOP THINKING ABOUT THE #BRAND

Image by Getty Images via @daylifeThe Re-wired group and I were talking on a call today about some of the changes taking place in the China social media space, and how they could herald changes to e-commerce, advertising and marketing here in the United States.  When it comes to social tech, and the social networking that happens on platforms like Sina weibo, Tencent's QQ IM service, and with companies like Alibaba's alipay service, China often appears to have a leg up. Those companies are led by aggressive first movers, who have a lot of government support.

I brought up the fact that it looked like Alibaba CEO Jack Ma's aggressive push to tie services into a social e-commerce bundle looked like a big play for changing the way consumers shop and how consumers are marketed to.  It seems a simple gesture, but Bob Moesta and Chris Spiek pointed out a few things, and I think they are worth bringing up today.

Bob said that the aggressive push to use social media technology was a big sign that China didn't have to spend millions (or maybe billions) on traditional forms of advertising.  If the social layer is well embedded, then advertising and marketing becomes a very granular enterprise.  He said it is about "building influence through credibility and bypassing thirty years of marketing and advertising and selling with underlying technology." What that means: if you can find the people that influence their friends the most to purchase goods, why do you have to come up with a million dollar advertising narrative? Just give them the product, make them feel they are part of a community, and let them make up the rest.

Chris added, cogently, that this technique obviously "lowered the advertising and selling costs. You can cut that in half becuause you are getting product to market through people, not through advertising, per se."

What Chinese social media companies and what I will now begin to call social e-commerce companies are doing is creating the next layer of seeing who is influencing what product purchase in what category. As Bob said on the call, "It's about measuring the direction and magnitude of specific topics. It's really about making connections, so you you know each other, you must influence each other. Your friend in one area may influence you in one way, but then again, your other friend might influence you in other areas."

It kind of turns the world of advertising demographics on its head. You can't say anymore, if the above is true, that a person aged xx to xx with two cars, living in xxx city will live a lifestyle closely resembling other males in that area. You now have to drill down into the relatinoship. So what job does advertising and marketing begin to do? It begins to be about researching your life history, not researching what you own and where you shop, what you like and what you don't like. It's about the emotional narrative that YOU create for your life.

If you want to be a successful advertising team, you need to have people on your team who can research people, who can listen to people, and who can help them tell THEIR stories, not the brand stories. It's not about the brand anymore. It really never was, but what made us think it was? Well, the structure of the media.

The online media and social web structure we have now, as it is currently being used, will unseat the most powerful of advertising and marketing companies, IF they keep doing what they have always been doing --- telling a story about the brand. Stop thinking about the brand.

"There is a calculus that has not been invented yet, but the guy in China will be best positioned to help and know this,"says Bob. But I think it's not even that complicated. Watch how China puts together the tools for listening, and then lets buyers, sellers, marketers and the whole community take care of itself.  I close with a quote from Ma, who recently told an annual Alibaba conference in China that he's out to do more than make his competitors Baidu and Tencent, or RenRen stay awake at night. He wants to disrupt the entire financial system.

Mr. Ma also said Alibaba Group wants to take on state-owned enterprises. He said Alipay, an affiliate providing online-payment services that was recently transferred out of Alibaba Group to a separate company controlled by Mr. Ma, already has made a contribution to Internet users by challenging banking services.
“If banks don’t change, we will change banks,” he said. Mr. Ma has been criticized for his decision to transfer Alipay’s ownership because he didn’t seek approval from Alibaba Group’s board of directors, on which Yahoo has a seat. But he has said the transfer was necessary because of restrictions by the People’s Bank of China on foreign control of online-payment companies seeking new licenses would have prevented Alipay from obtaining one, because of Yahoo’s involvement. 

image from Fool's Mountain: Blogging for China.

Jack Ma Wants to Buy Yahoo! What's the Marketing Plan, Now?

Image by World Economic Forum via Flickr
How would you market your company if this was happening?

TechCrunch reports that at a conference in San Francisco, Jack Ma, CEO of China Yahoo! subsidiary Alibaba, revealed that he has a strong interest in buying Yahoo! and spinning off its core assets. Most likely this is to protect himself and to rescue an ailing company.

There is not much more to add to this story, other than to say that it now has legs, as they say in the news business.

About a week ago, a report at Hexun, a Chinese media site said that Ma was serious about at buying Yahoo!. The purchase would allow Ma more control over Alibaba and it would also enable him to take some of the core features of the Yahoo! e-commerce infrastructure and use it for his own venture, Alipay. The stories on the recent Alipay fiasco are many but in short, Ma took the liberty of using his interest in Alipay to spin that company off from Yahoo!. In fact, Yahoo! didn't know it was coming.

I think that there's a strong likelihood that social e-commerce is the next giant wave of building web companies in China. All the major social networks are doing something about it. Web companies in China are buying properties that they can tie onto the back of a social media camel, and they are whipping their networks into shape and building strong e-commerce capabilities.

So, you are Yahoo!. You have a very large Chinese suitor. What is your marketing and innovation plan for this content engine that was once the darling of the Internet world?

Alibaba Is Making Like Bandits in China's Online Shopping Frenzy

Alibaba, China's home grown eBay sales platform will handle US$157 billlion in sales this year, according to the company's chairman, Jack Ma.

Makes you kind of wonder whether China will be the world's future manufacturer or future consumption engine. I defend the notion that we need to rethink how China operates in the context of a globally tapped in world.

Rather than think of the country as a nest of threats to our jobs, we could think of them as a lucrative market of people who would like to buy things.

In a report in the Wall Street Journal, Ma announced the figures as part of a series of challenges to local and state-owned enterprises in China.

Ma also said that Alibaba had state-owned enterprises in its sights, saying that his group Alipay would be a threat to banks that were not changing as fast to fulfill consumer needs as web enterprises.

The company is launching a series of aggressive investigations into Alipay users who are suspected of fraud, in an operation that looks as much like a public relations cleaning up as it does something any business owner would want to do to make sure the company is healthy.

The string of Alibaba news comes at the same time as an intriguing China finance ministry announcement that the central government has changed its opinion on funding VCs to advance high tech ambitions in the country.

The Chinese Ministry of Finance announced early Sunday it would allow the central government to contribute up to 20 percent as a minority investor in local venture capital funds if the purpose of those funds was to bolster startups in innovation sectors, including technology and internet, according to Reuters.

The 20 percent devoted to a central fund would be supported by financing given through local governments and other investors, the report said. Funds that receive government money must invest at least 60 percent of the money into small start-ups in designated industries.

The finance ministry's list is said to be extensive, but it was unclear how many of those verticals contained web-based enterprises. However, given the massive growth of innovations like Sina's Weibo service and the Alibaba news, a compelling case could be made that china VCs are whetting their appetite for greater web growth in 2012.