chapter9-China market is crash

INDIA-CHINA IT | INTERVIEW INFOCUS | CHINA-INDIA SECTOR | REPORT

China market is not a cash cow |38| India-China Chronicle  APRIL 2012

Ravi Shankar Bose is the Director of Fugumobile Ltd, a successful Shanghai based company started

by Indians. Bose possesses a rare quality that most marketers aspire for: A grounding in technology combined with a deep understanding of brands. Following stints in the IT industry in India, Bose has spent the last nine years working in the mobile marketing and gaming business in China and has grown with the nascent digital marketing industry from basic to ever evolving platforms for consumer engagement.

Proficient with both online and mobile platforms, Bose is a firm believer in the convergence of digital media and spends his free time reading about the latest technologies.

He speaks with Anchit Goel about his experiences in China.

ICC: Fugumobile is a marketing solutions provider for many leading consumer brands in China. Could you tell us more about your business and the products/services you provide?

Bose: Fugumobile is a mobile marketing and advertising agency, doing business in China for the past 10 years. Rather than being on the traditional side of advertising we are more on the digital side, which includes both internet as well as mobile advertising. We are working with many leading brands creating marketing solutions and advertisement strategy for the mobile platform.

Three-four years ago there were no smart phones or tablets. That time the dominating source of advertising on mobile was through targeted text SMS with no visuals. Now with the advent of technology and rapidly increasing number of mobile users, digital advertising has become more interactive and with a wider reach. So more and more brands are using mobile phones as a medium to reach and retain consumers. We provide such clients with complete end-to-end services (from concept to execution) across all mobile platforms including SMS, MMS, WAP, QR Codes, Bluecasting, and multiple app environments.

What is the profile of your clients? Are they only Chinese or also include MNCs? Many of our clients are MNCs brands. The campaigns are done mostly for the Chinese market as well as for other markets including India, Europe, US, Southeast Asia and many more. As China has a big automobile industry, our biggest clients are some of the automobile companies, such as Mercedes and BMW. For Mercedes AMG, the high end cars, we developed a mobile application providing a 360 degree view of the car and its features. Same was also done for BMW with some more features like the history of the car, videos and wallpapers.

Last year during the cricket World Cup, we developed an ad campaign for Reebok shoes in India, developing wallpapers, 360 degree view of the

shoes and some gaming applications targeting the young generation.

Have you faced any competition in China, especially from local Chinese companies, when reaching out to your customers?

Fugumobile is technology as well as creativity focused company. The creativity part includes understanding of the brand and what kind of solutions suit that brand. After branding comes the tough part of inserting technology into creativity.

In China, we have faced competition from technology as well as creativity oriented companies. On technology side are many local Chinese companies and on the creativity side are many traditional advertising agencies. But what makes us unique is that we are able to combine these two – technology and creativity. If the brand goes to a technology company then they are not able to come out with creative mobile concepts and strategy. Similarly, creative companies don’t have the technical talent to execute solutions. In the last 4-5 years, we have observed that many creative companies come to us to develop these solutions as they find it difficult to incorporate creativity with technology.

What is the biggest challenge you have faced, both in terms of your business and the general Chinese business environment?

We did not face any major challenge in setting up the business in China. But we did in terms of the services we provide. The biggest challenge was to convince the brands for advertising on the mobile platform.

There was no one to take the first step as this was a very new concept in the advertising world. China has over 800 million mobile users but still it was difficult to convince brands on how effective the mobile campaign will be.

Luckily brands like Coca-Cola and Nike, which are very innovative in their advertisement campaigns, were willing to trust us and take the first step. Now more and more brands are willing to have such advertisements APRIL 2012  India-China Chronicle |39|

INFOCUS | INDIA-CHINA | INTERVIEW

and the challenge has reduced to some extent. What still remains a challenge is the need to be understand on how big mobile advertising can be.

As far as the Chinese business environment is concerned, we faced challenges with the local companies as they are very cost competitive and concerned about quality and creativity. Now there is no measuring scale for creativity, so lot of the challenge is faced in the process of project management and costing of these elements.

They differ in terms of the process they follow and the way they define the scope of work.

There is lot of talk about the need for Guanxi (relationships) when doing business in China. What has been your experience?

Guanxi is followed in some extent in China. But then if you provide good service and quality products, you do not need Guanxi for your business development. The Chinese like anywhere else always want good services and quality products. If you provide them with that they will look forward to doing business with you. The key to doing good business in China is to provide a unique product or service which will certainly add lot of credibility to your business. And at the same time you have to maintain the balance between foreign and local culture, follow a blend of both cultures.

What is the mindset of the Chinese regarding Indian companies?

What we have seen generally is that the Chinese see Indian companies from the digital side, as the Indian software industry is very famous.

There are no specific issues with Indian companies. They consider us like any other foreign company doing business in China. There are no issues with the staff also, which includes Chinese, Indians and some others from abroad.

As a marketing and advertising expert, what differences do you see between Chinese and Indian consumers? |40| India-China Chronicle  APRIL 2012

The basic outlook of consumers is price. Indian consumers are more price conscious than Chinese consumers. Chinese consumers have a taste for uniqueness, they try to purchase new things with some unique value attached to it. In China, gadgets are more preferred especially in the digital segment. Chinese are always trying to change and buy something new from the market. The same trend has also started picking up among Indian consumers. At the same time, Chinese consumers are very brand conscious and look for branded product. If they think of getting some particular brand they will either buy it or if it is not affordable they will purchase the counterfeit of the product.

INDIAN CONSUMERS ARE MORE PRICE CONSCIOUS THAN CHINESE CONSUMERS. CHINESE CONSUMERS HAVE A TASTE FOR UNIQUENESS, THEY TRY TO PURCHASE NEW THINGS WITH SOME UNIQUE VALUE ATTACHED TO IT. What do you think about Made in China products?

Basically there are two kinds of made in China products. One includes your high range products for MNC brands such as Sony, Nokia and Apple.

Most of the big brands have their manufacturing units based in China.

When people buy products of these brands, they go by the brand name and are not concerned whether the product is made in China or not. This is one perception of consumers.

Then there are low priced products manufactured by local Chinese brands such as TLC, Haier and Hisense etc.

When consumers buy low price products, their general perception is that this product is made in China. But then it provides the consumers with a lot of options and flexibility. So there no reason to complain about made in China products. Basically the high end products are used worldwide and the low end product face this made in China concept.

In India there is a lot of negative perception about China. What do you feel about it and how do you think it can be minimized?

The negative perception of Indians towards China is mainly due to the media, which is very biased in nature.

Most of the time they do not have first hand news about China and it is taken from other sources. Only one or two Indian reporters are based in China.

But slowly things are changing. There is huge trade happening between the two countries. More and more Indian traders, professionals are coming to China to do business and once they come here, their perception changes.

One of the other things is that there is limited cultural exchange between India and China. The existing efforts are all government linked and not well coordinated. Chinese here earlier used to watch Hindi movies and still remember Raj Kapoor in Awara.

Because of some political issues also there is a negative perception about China in India. And lot of this is coming from the Indian media, for which Chinese media has started to hit back.

This certainly is not a good thing in improving the relations.

What suggestion would you like to give to those Indians interested in setting up business in China?

First and foremost, the Chinese market is available for local as well as foreign companies. Before starting any business in China, you need to have good market knowledge through market research. Enter into China after having a good understanding of the available opportunities and the Chinese consumers. Then it will be easy to start your business in China.

Secondly, China is not an easy market to survive. It is not a cash cow where you can start earning immediately. Many companies have come and failed to even establish themselves. You need to have a long term approach.

Important is to break even and keep your costs low. Start with a small base, see how your Chinese counterparts operate and keep the cost low and understand your customers well. 

The Brave New G2 World CHINA-INDIA AS TRANSFORMATIVE FORCE

While most people are looking for a US-China G2 along the lines of the old school, the most important G2 could be that of China and India. We should see these two in a relationship that is mutually beneficial.

Dennis Pamlin

T

he two countries that will dominate the 21st century in many ways, China and India, face a very challenging situation, but also very inspiring opportunity.

On the one hand they need to ensure that they can lift people out of poverty and do so in an environmentally sustainable way. On the other hand they need to design a global governance system that can help the world to move beyond the industrial society with a single-minded focus on economic growth and embark on the next chapter in human history.

These are two very big challenges,

maybe the biggest challenges humanity have ever faced and they will take place during a time when the phase of change is higher than it has ever been through history. Collaboration between China and India will be complicated, but is necessary to ensure robustness, to avoid conflicts and ensure that wisdom from both cultures is embedded in the new governance system.

The financial crisis in the world has brought the western superpowers to their knees and they now understand that the emerging economies must be given a more important role when global economic policy is being developed. Unfortunately so far China and India have not taken the opportunity

to formulate a proactive policy and instead large corporations, with business models that are based on great income differences and consumption patterns that are destroying the planet, are setting the agenda.

But the different financial problems are however getting worse and instead of ad-hoc solutions it is time to launch initiatives that look beyond shortterm fixes. Below the surface we have a number of trends that require a dramatic change in how the current global governing system works, including the Bretton Woods institutions that were created after World War II. The firm action that the current financial crisis requires is a perfect April 2012  India-China Chronicle |41|