Yes, there is so much opportunity, however, it won’t just come to you. This is why everyone needs to enter China now. But, you won’t go far without Social Media writes Digital Jungle’s Mathew McDougall.
Major Free Trade Agreement
Potentially one of the most monumental and important free trade agreements between Australia and China has just been signed. The agreement could create billions of dollars in new markets for Australian exporters.
This deal will benefit many Australian’s from numerous professions in a wide range of fields. Australian farmers will receive tariff-free access to China’s vast infant formula market within four years. Wine makers, who currently sell more than $200 million worth of stock to Chinese consumers each year, will also see their tariffs eliminated completely within four years. This Free Trade Agreement has opened economic opportunities that not even the U.S. can match.
As well as benefitting individual Chinese and Australian citizens, the agreement will also boost key industries. Hospitality and Tourism firms will now be able to open more hotels and Australian universities will be able to connect more directly with Chinese students.
Why Now is the Time to Enter China
China is one of the World’s fastest growing economies, making it prime for investment. China still contains many unsaturated markets with huge growth potential. This free trade agreement is the most significant deal China has signed with a developed country, making Australia one of China’s strongest allies in the West.
China is currently Australia’s largest trade partner. This agreement has only strengthened the professional relationship between the two nations and makes it a key time to invest in China. If the Australian governments trust in the Chinese market is not enough to convince you now is the time to invest then look to the economy.
As a result of the agreement, Chinese investment in Australia is set to increase significantly. It already grew by 41% in 2013, however, this still only accounted for 1.3% of Australia’s total foreign investment.
The Importance of Social Media
While it is now easier to enter the Chinese market and start your investment, there are other factors to consider. In order to succeed in China, you need to connect with the Chinese people. The population of China is still overwhelmingly mono-cultural. Western immigrants are not enough to ensure the success of your business.
The Chinese middle class are one of the newest and fastest growing socio-economic groups in China. This makes them a largely untouched group. Due to their largely new found wealth, the middle-class a determined to highlight their social standing. They believe the key to doing this is through the West and projecting themselves as a sophisticated, Westernised individual.
Social media is ultimately the key to connecting with Chinese consumers; the middle class are no exception. Regardless of their age, the majority of the middle class are present and active on social media.
By setting up accounts on Chinese social media sites Australian brands can emphasise their interest in the Chinese market. Chinese Social media users share more content than any other in the World. They are also influenced by what others post and like online, with more than 40% stating that they would buy something based on a social media recommendation.
Here is where key opinion leaders can be way to secure the success of your business in China. Key opinion leaders are individuals with a strong social media following and high reputation as an ‘expert’ in any given field. These individuals’ opinions, however, are often worth more than that of genuine industry professionals.
Other Industries Poised to Gain:
The tourism industry could see a major new market emerge from this agreement. Over 770,000 Australian tourists travel to China each year. Australian tourists currently make up one of the fastest growing tourism markets for China.
The current annual rate of growth is 6.7%. Just over half of these travellers were tourists and in total Australian travellers to China are worth $1 billion to the Chinese economy. Compared to other Western travellers, it is not hard to see why the Australian tourist is so highly valued by China. US travellers to China only increased by 0.1%, Britain 3.8%, and Germany 3.5%.
This trade agreement will be beneficial for Australian tourism firms, which will be able to gain greater access to key holiday destinations, where they can open hotels, or other attractions. This will naturally appeal to Australians who may seek home comfort, and will be intriguing to Chinese nationals.
The agreement, however, will be mutually beneficial for both countries tourism. In 2013, China was Australia’s second largest in bound market for visitor arrivals. This figure is only set to grow by 14% this year, and predicted to grow a further 12% in 2015. In total Chinese tourists currently contribute $4.5 billion to the Australian economy.
Last year saw a 20% increase in the number of Chinese students applying to study in Australia. This now makes up a quarter of Australia’s 350,000 international students, the largest demographic.
The growth can be attributed to several factors. There is already a high Asian population in Australia, making Chinese students comfortable about the idea of travelling there. It is also a closer option than European Universities, and some American universities.
One key area, however, where universities struggle to connect with students, and where Chinese students in particular feel isolated, is social media. Chinese students are one of the most active online demographics; however, they prefer domestic social media sites such as Weibo. While universities may be making great progress in connecting with students through social media, ultimately Australian universities do not have a presence on Chinese social media.
By joining and attempting to understand these sites, Australian universities will not only be able to connect with the existing students enrolled at their institutes, but also recruit new students from China, who are more likely to discover and be interested in the university if they see it has a Weibo account.
Founder of digital marketing agency, Digital Jungle, Dr. Mathew McDougall has more than 10 years’ experience in China and is a renowned for expertise in Chinese digital marketing.