China’s digital uniqueness

The speed and position that China is moving at puts them slightly ahead of the curve, or at the least, at the very forefront of digitalisation development. And while the western digital landscape is primarily dominated by American companies such a Google, Amazon, Microsoft, Facebook and Twitter, these have been largely locked out of the Chinese market. China’s digital landscape is not just a copycat of those companies, but a combination of certain elements from them with local interpretations alongside completely independent platforms.

China’s digital legislative and regulatory landscape is also evolving rapidly and there is a focus on digital sovereignty. This is not unique, Europe’s GDPR also lends itself to that thinking but China is looking to take it a step further and are introducing laws and regulations around cyberspace that companies need to be aware of and adapt to.

This then has a direct impact on digital B2B communications and the business landscape and makes China slightly different from other countries within the APAC region. If this is compared to other countries in Southeast Asia, as well as Japan, Korea and to some extent, India where a hybrid approach is becoming the norm, with laws and regulations being influenced by Europe, the USA and China. But those countries are not as advanced as China in their digital journey, so it is not as clear about their future direction.

The digitalised industrial B2B ecosystem

There are a number of digital factors that are influencing the B2B sector and these are increasingly influencing the way business is carried out. Digital channels are playing an increasingly important role in B2B sales and marketing and B2B companies are proactively and reactively shifting towards increased importance and reliance on these. At the same time, products and services that integrate digital technology are adding value to the industrial customer. Smart and connected equipment is a big area that not only improves efficiency but provides the capacity for additional service add-ons.

And then there is the way digital technology is being applied internally in companies to improve efficiency and effectiveness. This could be industry 4.0 with new digital technologies in manufacturing or back end services like CRM or cloud-based infrastructure tools that help the organisation work in new ways. While these elements are very different, they are intersected by the increased importance of data and the understanding of data. This covers big questions about how data is stored, what type of data is stored but also how to get value out of it. That is a theme that runs across all of the trends in the digital landscape in China. Swedish companies need to know how the regulations will impact on their business, just like we have with GDPR.

This may not seem unique to China, all markets are navigating the use of data and digital technology within the B2B landscape, but given China is working with different platforms, actors and laws, it means for Swedish companies, that a digital strategy needs to be tailored, for the country, the industry and the segment. And the strategic importance of China, both directly and indirectly for Swedish companies, it is critical to have a good understanding of the digital landscape there. Particular laws mean that data cannot cross borders, so this will have a big impact on storage and use of data, but these are evolving as we speak so there is not a simple answer for each situation.

It is also not good enough for Swedish companies to think about these strategies and not be proactive in the roll-out of these. Launching in Europe or America first and putting China in a second wave will inevitably put you behind local suppliers who are moving at a rapid pace and will have a competitive advantage. They must also be tailor made to integrate with local systems, not just with language, but considering customer expectations and behaviours.

Local approach, local strategy

While local insights and having a physical presence in a market is becoming the recommended approach for Swedish companies to really grow global sales, it is even more imperative in China. The digital environment has evolved in a way that is not reflective of the model that most Swedish businesses would recognise. Having physical access and understanding how the commonly used digital platforms are integrated and used by individuals and companies is only possible by being in China, so there is no substitute for being physically present.

There are differences on so many levels: different communication platforms, the role of company websites, search, B2C and e-commerce platforms and these all impact the B2B ecosystem. You can’t just view that you will translate content and layer it over the local platform, it’s creating bespoke content for the Chinese market considering how the digital landscape is used. Specifically, for B2B, there is a requirement for separate third-party sales platform, not just relying on your own website portal to manage sales functionality or a CRM where WeChat plays a significant role. All of these differences, and also the pace of development, means customer expectations are vastly different from those in the West. Culturally, China is a very modern, dynamic digital culture and it is hard to understand the wide-scale impact across all sectors and the customer journey without working directly with clients.

Invest to be ahead of the curve

There are many opportunities to be gained from China’s digital progression and Swedish companies could look at how building tech and digital hubs locally can support growth both in China and the wider region. With the pace of development, there is an advantage of being in the market that supports rapid change, and while legislation can be quick to be implemented, it is usually viewed that a test and embedding period will help to shape the laws.

For Swedish companies, being at the heart of this can accelerate their development which can then be leveraged both in China and globally. Additionally, the talent pool in China is vast and this can support the Swedish expertise in innovation and collaboration.

The Chinese B2B market is mature and quality Swedish products and services have an opportunity to stand out. Having the right solutions that are digitally and locally integrated can initially cost more money, and this is often a tricky sell within the Chinese market. But positioning and selling a quality solution with an initial higher sell price must be offset by the long-term cost and customer savings and benefits which is always an attractive proposition within the Chinese B2B market.

Want to know more?

Listen to our podcast on the topic or reach out to David Hallgren.