Talking it up online

Social networking gives firms a growing presence in rising Chinese market, Lin Jing and Chen Yingqun report in Beijing.

Given the wide disparity in their lines of business, it's not often that Mercedes-Benz, Starbucks and Nokia share the same marketing platform. However, in China, these companies share a common goal: becoming a key influence in the "virtual town square".

In this case, the virtual town square is the micro blog, a platform that is now an integral part of China growth strategies for global companies.

Mercedes-Benz knows the power of the platform. In January, when the German luxury car brand decided to sell a limited edition of its Smart cars, it decided to do so through a micro blog. All 666 units of the Smart 2013 New Year Edition offered via Sina Weibo were sold in around eight hours.

Of course, Mercedes-Benz isn't the only company that has gained from initiatives like this. In the past three years, social networking companies such as Sina Corp and Tencent Inc have become important tools for a number of international companies looking to establish or consolidate their presence in China, according to experts.

Sina said there were about 260,000 active company accounts on micro blogs in 2012, and more than 1,000 of them belonged to multinationals such as Nokia, Mercedes-Benz and BMW.

Unlike developed Western markets, where SNS marketing lags behind traditional means, in China micro blogs have become a handy way for companies to reduce spending on conventional advertising.

Since their Chinese debut in August 2009, micro blogs have developed into a huge online society where people from all walks of life share personal experiences, participate in social activities and voice opinions on topics as diverse as politics, business and celebrity gossip.

But from a commercial perspective, the power to influence opinion and ultimately increase purchases makes micro blogs appealing to Western companies.

According to statistics provided by the Data Center of China Internet, or DCCI, the companies using Sina Weibo are spread across 22 different industries. A recent survey also indicated that nearly 23 percent of companies present in China are keen on using the platform for marketing-related activities, such as enhancing communication with consumers, launching business campaigns, delivering positive information and brand building.

To understand the potential of micro-blog marketing, one need look no further than the success of the US-based global coffee chain Starbucks.

The company's Sina Weibo account, opened in May 2012, now has more than 700,000 followers in China. Like many of its peers, the coffee giant initially started with routine marketing campaigns, but quickly discovered that targeted campaigns can be converted into real-time store purchases.

"What the fans have to say about the brand is often critical for a company. News travels fast in the digital world and our aim is to be more connected with our fans," said Marie Han Silloway, chief marketing officer at Starbucks China.

Last year, the company started a campaign to boost frappuccino sales on its micro blog, which has since become a main sales driver for the line. During the warm-up campaign (May 7 to July 9), Starbucks put up more than 60 posts, which generated 234,541 re-posts and comments, according to JWT Shanghai, the advertising company that conducted the campaign.

In terms of quantifiable returns, the company's 500,000 yuan ($80,600) micro-blog campaign has resulted in more than 95 million friend-to-friend recommendations, and sparked a 14 percent year-on-year growth in sales in China.

'A dual role'

Micro blogs are also an important tool for many companies to gauge customer feedback.

The Swedish furniture retailer Ikea set up an official account on Sina Weibo in October 2010, just as micro blogs were beginning to make an impression in China.

"SNS has a dual role for us - listening to suggestions from consumers and giving positive, timely feedback on their concerns and needs," said Jay Lin, a social media specialist from Ikea.