BEIJING (AdAgeChina.com) -- Hewlett-Packard is finding unusual comrades -- members of China's Communist Youth League -- to help expand its business in rural China.
"Rural China represents a huge market, about 700 million people and already today, about 100 million of them are online. They have access to the internet and engage. The rest are non-internet users, but they are still a huge opportunity," said Robin Seow, Beijing-based marketing director for HP's Personal Systems Group in China.
The league organizes a government program in which da xue cun guan, or university student village officials (USVOs), are hired to put their education to use in developing rural China. The government launched the program in 2006.
About 70,000 USVOs, sometimes called "village cadres," are serving around the country, mostly in smaller towns and villages that are still mysterious, unexplored markets for multinationals like HP, which tapped into the USVO network to reach and learn about these small communities. A big advantage for HP--the first marketer to work with the USVO network--is that recent university graduates are tech-savvy and familiar with brands like HP.
"That HP chose to work with USVOs was very smart. Only through these corporate-driven efforts can the countryside really be served," said Wang Ying, a director at the Chinese Academy of Social Sciences.
Regional and local governments do not require USVOs to cooperate with HP, but the company has signed up 7,864 from 29 provinces and municipalities so far, through a contest that has turned the government's young guns into technology evangelists.
"The more we are able to have all these ambassadors in these villages, the better. It's not just about bringing HP awareness to villages, but the true value of how IT can help rural peasants and school kids," Mr. Seow said.
The HP USVO "Creating a Better Life" contest, announced in December 2009, encouraged USVOs to submit plans on how IT can help their respective villages. The U.S. company received over 1,000 submissions and whittled the entries down to 100. Almost 59,000 USVOs and village residents cast online votes to name 30 finalists.
The "Creating a Better Life" program was hosted on a micro-site (cunguan.youth.cn/hp) on the Communist Youth League's web platform Youth.cn. That's a "major" show of government support for the contest, said Mr. Seow, because the Youth.cn site falls directly under the authority of China's Communist Party.
HP awarded 23 grants
In late June, the 30 finalists gathered at HP's China headquarters in Beijing to compete for 23 grants for equipment and training to carry out the proposals outlined in their contest submissions. The judging panel included HP executives, Communist Youth League officials and IT development experts.
One of the winning entries will help a village in Hunan province, known for its culinary heritage, create an e-commerce website local families can use to sell and ship non-perishable food products.
Another will develop a web platform linking Linying County villages in Henan province so they can share policy advice, technology and educational resources.
Sanwang village in Anhui province will build a PC-equipped community center called "Dandelion Paradise," where children can use the PCs to video chat with their parents who are migrant workers in other cities as well as take part in dance, music and exercise activities.
Rural China is still a mystery for many marketers
As the only foreign marketer to partner with the Communist Youth League's USVO program, HP sees the campaign as a unique solution to the challenges of marketing to China's still-undeveloped small towns and villages. In these areas, retail centers are mom-and-pop stores, not hypermarkets, and distribution often depends on motorbikes more than trucks.
China's rural population represents a vast number of budding consumers who can afford some western products, especially those that help business start-ups like HP's laptops, printers and storage devices.
"We expressed our intent last year to go into the rural market and quickly realized it is imperative that we also start using new media and word-of-mouth," Mr. Seow said. "This partnership drives traction with rural consumers because there is engagement beyond just consumer communication. It gives these people a chance to see how to get a better life with IT."
USVOs tend to be tech-savvy
Some of the twenty-something USVOs who took part in the contest already have a relationship with HP. As college grads who mostly come from China's most sophisticated cities like Beijing, Shanghai and provincial capitals, many were already tech-savvy consumers, exactly the target market for HP's earlier three-year "My Computer, My Stage" program.
"My Computer, My Stage" was designed to show budding filmmakers, artists and musicians how much fun HP products could be in the pursuit of self-expression.
The "Creating a Better Life" program has a more serious tone and is designed to educate HP about marketing in rural China -- why do small villages need computers? -- as much as helping the USVOs in their efforts to move local communities out of poverty. For the USVOS, the program can also energize what many have described as a tedious desk-job.
"HP is giving USVOs exactly what they need," said Li Zhong, a deputy director at the China Communist Youth League in Beijing.
The contest yielded "encouraging results," Mr. Seow said. "Our business in rural markets has grown four or five times from a shipment perspective since the end of 2009. It's not a big part of our business, but we remain convinced there are enormous opportunities."