Word of mouth marketing is the oldest and most fundamental marketing tactic possible – get customers talking about your product or service to their social circle. It’s also one of the most effective marketing tactics if done appropriately.
The success of any marketing strategy comes down to two factors – reach and impact. Unlike mass media advertising which has wide reach and low impact, word of mouth marketing generally has lower reach but much higher impact. When we hear about products from people we have a personal relationship with, such as friends or family, the messaging stays with us as it comes from a personal source.
According to a 2020 survey from Kantar Media, 93% of consumers from Argentina, Brazil, China, France, Germany, Spain, the UK, and the USA said they trust information on brands and services based on friends and family, compared to only 38% from advertising.
The importance of word-of-mouth marketing is reflected in numbers – according to Semrush, word-of-mouth marketing is responsible for $6 trillion USD of global spending annually and 13% of all sales.
In this article, we’ll explore how to leverage word-of-mouth marketing in China to grow your brand’s market share in the world’s largest consumer economy.
How is Word-of-Mouth Marketing Different in China?
Historically, China has long been a collectivist culture. While individualism is spreading in larger cities with more Western influences, collectivism and its impact on consumer mentality still hold sway over most of the country.
This is reflected in the effectiveness of word-of-mouth marketing in China. According to 2021 survey from Statista, word-of-mouth was the number one way Chinese internet users discovered brands, coming in at close to 24% of respondents’ top choices, beating out search engines, brand websites, and consumer review sites.
With the rise of social media and ecommerce, the reach for word-of-mouth marketing has grown exponentially. Nowhere has this shift been more apparent than in China, where the convergent development of social media and ecommerce platforms in recent years has blurred clear distinctions between the two types of platforms. This has led to the rise of social ecommerce as the logical outcome of word-of-mouth marketing model in the age of ecommerce.
Today, breaking into the Chinese market requires establishing a strong presence on Chinese digital platforms to incentivize customers to spread the word about your brand. Currently, the top social media platforms in China for word-of-mouth marketing include WeChat, Weibo, Xiaohongshu (RED), and Douyin (Tik Tok’s Chinese counterpart), all of which also have their own ecommerce functions built in.
However, while word-of-mouth marketing strategies might be different in China compared to the West, a fundamental principle still holds true – the goal of word-of-mouth marketing is essentially to generate positive buzz about your product.
Word-of-Mouth Marketing Strategies
The paradigm shift to online marketing and ecommerce in recent years has created fertile ground for the emergence of many innovative executions of word-of-mouth marketing in China. Below, we explore a few of these models:
Otherwise known as a key opinion consumer, the term KOC was coined in contrast to KOL, or key opinion leader. KOCs are regular consumers, socially active in their immediate communities, whose online following consist mostly of friends, family, and acquaintances. Unlike KOLs, who are aspirational figures for their followers, KOCs are relatable figures for their followers.
Falling under the umbrella of word-of-mouth marketing, KOC marketing campaigns operate through product seeding to various consumers who have been identified as resonating with the brand. These KOCs then post their reviews of the brand’s product or service on their social media, spreading the word to their immediate social circle. Not only are those in their social circle are more likely to see this messaging as organic and trustworthy, this form of advertising is more targeted as those in their social circle are more likely to share similar values and lifestyles.
As others in their social circle try out products or services from your brand, they then share their experiences on their social media, creating a feedback loop within their social network.
Makeup brand Perfect Diary was one of the first brands to showcase the effectiveness of KOC marketing in China. By seeding their products to various KOCs on Xiaohongshu, Perfect Diary became one of the most talked about brands in 2019. Xiaohongshu’s algorithms helped create the perfect environment for this KOC strategy – its recommendation engine set it apart from other social media platforms, prioritizing in depth content over follower count.
The DTC, or direct to customer, model was made possible with the advent of social media. By generating buzz on social media through shareable advertisement messages, the DTC model leverages word-of-mouth marketing to enable sales directly to customers, bypassing reliance on department stores and platform recommendation algorithms.
Unlike in the West, brands pursing the DTC model in China still host their goods on ecommerce platforms such as Tmall and JD.com and take advantage of their advanced logistics. However, instead of optimizing for platform recommendation, their marketing tactics focus on creating content aimed for word-of-mouth dissemination. With the DTC model, many brands opt for taking bolder messaging to inspire word-of-mouth brand discussion amongst their target niche.
Case Study: Neiwai
Neiwai, a lingerie brand launched in 2012, began with an online DTC model. To generate buzz upon the launch of their brand, Neiwai hosted “Her Voice Forum”, inviting women from different walks of life and professions to share their stories. In 2020, they launched an annual body positivity campaign “No Body is Nobody”. These campaigns feature photoshoots of a diverse array of non-professional models with aesthetics underrepresented by Chinese beauty standards. By seeding products to these models, Neiwai also turns these models into KOCs for the brand. By 2020, Neiwai had expanded to over 110 offline stores in 30 cities, with 3 million registered members.
By focusing on a brand messaging of body positivity and feminism, a bold statement in China’s cultural landscape, Neiwai was able to cultivate a loyal consumer base. The key to their successful marketing strategy was ensuring their messaging of female empowerment was a perfect fit for their product – lingerie that prioritized wearer comfort.
Pinduoduo’s meteoric rise in 2018 was an example of how word-of-mouth marketing could serve as the cornerstone of an ecommerce platform’s operations. Its group purchase model, which offers hefty discounts for consumers to gather in groups to buy products in bulk, leveraged the power of word-of-mouth to quickly grow into an ecommerce behemoth rivalling JD.com and Alibaba’s Taobao.
Pinduoduo’s success with the group purchase model was also in part due to its focus on breaking into the untapped markets of lower tier cities and rural areas, where more collectivist attitudes have a stronger impact on consumer behaviors than first tier cities in China. Consumers in these regions have tighter knit social and familial circles, creating the optimal environment for word-of-mouth marketing to flourish.
While massively successful for many brands on the platform, the Pinduoduo model might not be suitable for all brands. With its emphasis on heavy discounts and bulk ordering, the group purchase model is suited for low to middle tier consumer products. Luxury and boutique brands, where high price points are part of brand identity, will not benefit from group purchase. Take for example Tesla, which in 2020 denied Pinduoduo from selling its Model 3 vehicle on the platform.
In 2022, with the lockdown of many eastern Chinese cities, with the notable inclusion of Shanghai, the group purchase model has become a necessity for many residents. As residents in Shanghai become more familiar with the group purchase model and more and more businesses begin offering group purchases, we can expect this word-of-mouth marketing strategy to localize for first tier cities after citywide lockdowns end.
While one of the oldest marketing strategies, word-of-mouth marketing is not going anywhere. As social media and ecommerce become ever more intertwined in China’s highly competitive digital ecosystem, word-of-mouth marketing in China has evolved to take advantage of the massive reach offered by social media while retaining its strong impact on consumers.
While effective, brands should be wary of approaching word-of-mouth marketing with a one-size-fits-all mentality. An effective word-of-mouth marketing campaign takes into account brand positioning and values to convey an authentic yet shareable message to target consumers on the right platform.
HI-COM is a digital marketing agency dedicated to providing China-specific strategy, social media communication and e-commerce marketing services to businesses around the world. Working with more than 100 brands, HI-COM is the go-to partner of companies that want to enter China market! Contact us for your free consultation today!
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