n today’s fiercely competitive world, products or services are facing one common problem, the old ways of segmenting consumers along broad socio-demographic and class based lines have ceased to aptly describe the modern consumer, especially in terms of their ‘real-time’ relationship with a brand.

 

Why? Because Digital technology and ‘Big Data’ are changing the way we look at the world today. They are changing the way consumers comprehend brands, increasingly through multiple channels and in multiple ways. This, subsequently, is changing the way that consumers interact with brands, and the way they share their experiences. The relationship between business and consumers, whether it is FMCG or luxury, consumer electronics or automotive, is now, forever changed.

 

Even the very technical bedrocks that have underpinned the business world we have known for decades are changing. Sampling of a demographic segment to find brand insights often takes much longer than necessary and, in today’s world, can mean significantly less. This is because consumers surveyed have their attitudes influenced by fragmented pieces of information that reach them via ever more fragmented channels. Individuals now consume a daily diet of text, image, video and many other formats that appeal to them.

 

 

Underscoring this is how the digital world is morphing into something that demands continuous attention, continuous connection, and continuous feedback, anytime, anywhere and on any given subject. Companies now have to deal with a moving target, and it is within Big Data that we can best understand what has become most important. What aspects of your brand, including anything stemming from your brand, physical or metaphysical, have a significant impact on the consumer in a positive or negative way!

 

Though there are many challenges, we believe these are not insurmountable, and if well positioned companies today can really tap into an exciting future. In no place is this more relevant than in China.

 

In China there are now some 513 million internet users. Soon we will have a population bigger than that using intelligent mobile devices. On average these users spend four hours each day online. Over 300 million of them contribute to social networking site, Sina Weibo, and relatively new system, We-chat. 84% of all internet users say they split their time online between social networking, video uploading, photo sharing and micro-blogging; and as many as 64% say they have purchased something due to a digital marketing strategy. This number will surely rise in the future as everything moves to mobile and China will ‘own’ the largest group of users across all geographical boundaries.

 

 

The use of large data analytics in the field of Chinese consumers has rapidly gathered pace, despite a slow start. The importance of Big Data lies not just with the ability to collect but in an ability to analyze and extract tangible knowledge about your audience. Huge amounts of data are just that: data. Without an understanding of how to segment and what this means to the online habits of an audience, it will be of little use to a company.

 

In the US, the top spending companies in 2012 on average spent $24 million and those at the other end of the spectrum spent $7 million per company. In March 2013, Tata Consultancy Company, in a survey of more than 1,200 companies in the industry, highlighted that more than half (53%) last year had large data items, and the median across the industry was $10 million. Even though some companies are starting to get Big Data, and what it means to the future of global commerce, there is still plenty of way to go.

 

 

Data analytics doesn’t stop within a pure marketing sense. It expands across multiple areas from R&D to customer service. In logistics and distribution, Geographical data can show us so much more about people’s consumption habits. In China, digital and Big Data provides entry for brands into third tier and fourth tier cities where the distribution and retail cannot outreach because of the significant distribution costs. With a rapidly increasing use of mobility connection and internet use, e-commerce will push further the channels to those third tier and fourth tier cities.

 

Yet, within China, many challenges still remain. A recent Bain survey conducted across 40,000 households highlights that in theory many Chinese nationals show a vague concern about a brand. However, establishing an intrinsic relationship between ONE brand and a consumer is extremely difficult. 

 

Compared to many other markets, the Chinese consumer retains relatively low brand loyalty. Within a particular product type Chinese consumers like to try different brands and compare and discuss online with their peers and friends. This creates problems because the traditional channels of advertising and consumer interaction often fail to make adequate headway. It is here that we see, once again, the potential of data analytics. Large data can be qualified and consumers segmented, providing a truly interactive platform, which, at least, is more conducive to a depth of understanding of the ‘new’ consumer.

 

 

Market segmentation allows us to both target and position ourselves in a market. In the past doing this would give very little insight into how the online world is reshaping consumption habits. However, because of a world of data analytics we can measure huge amounts of data in a short space of time, establishing a fusion between online habits and how this correlates to geographic, demographic, psychographic and behavioral patterns and differences.

 

As it stands, the population of netizens in China is 564 million, and the users of smartphone are expected to reach 300 million by the end of this year with a strong penetration rate. The shipment of broadband, wireless Internet and mobile will double in the next 5 years. It is estimated that there will be over 700 million people connected to the Internet by 2017. Leading Chinese companies, especially those that are Internet based like Alibaba, Baidu and Tencent with over 90 million users in total, have already taken the steps to put this understanding of data into practice. 

 

As an organization, FleishmanHillard has been doing this for some time. We have developed many new data-driven research and insight capabilities, which, at its most stripped-down, is a world-class platform to help our clients solve problems. However, as an idea it centers on the notion of true. True data to understand a true consumer.

 

How we respond, when we respond, and to what extent, will shape the new consumer relationship well into the 21st century. Companies that ensure they develop the capacity to understand real time data that gives a deeper and more nuanced understanding of the consumer will be the ones that gain big from Big Data.

 

 

Li Hong, Senior Partner and President (China) of FleishmanHillard International Communications, currently leads the agency’s China offices in Beijing, Shanghai, and Guangzhou and is responsible for developing the firm and growing its operations across China. His experience includes nine years working with the government and 21 years in the private sector. He has a background and special expertise in strategy development, strategic communications, public affairs and regulatory issues, consulting, brand consulting and marketing. He has been instrumental in growing the firm’s public affairs and government relations practices in China. In the past 11.5 years, he has managed to grow the firm 11-fold. 

 

As a founder and first Managing Director of Ogilvy & Mather Public Relations in Beijing, and later as Managing Director of its advertising agency, Li Hong serviced a portfolio of corporate clients including Kodak, IBM, American Express, Allianz, National Semiconductor, BMW, China Mobile, and China Netcom, among many others. During this time he provided counsel in integrated communication campaigns. He is also experienced in the area of crisis and issues management and training in China, and from 1993 to 2002 worked with companies such as Bass Brewery, Nokia, IBM, Unilever, American Express, Mead Johnson, Pfizer Pharmaceuticals, and Pepsi Cola. 

 

Since starting with FleishmanHillard China in 2002, Li Hong has developed many new clients for their client portfolio, including Mercedes-Benz, Tiffany & Co., HP, Philips, TCL, P&G, Li Ning Company, Siemens Medical Solutions, Brilliance Auto, Volkswagen, Ricoh, Omega, Sinolink, Oracle, Singapore Tourism Board, Gome, Huawei, Master Kong and many others. In addition, Li Hong is a frequent contributor of articles to the management sections of publications including Harvard Business Review, South China Morning Post, 21st Century Economic Report, 21st Century Herald, Guang Ming Daily, Economic Observer, Business Week (China).