Below is an excerpt from "China Beyond," a book recently published by Ogilvy & Mather about consumers, brands, communication and retail opportunities in China's lower tier markets. It was written by Jane Ling, the agency's consumer insight director based in Shanghai. Another chapter was published last week in Ad Age China, "Bucking China's One-Child Policy."
Readers can also view a video interview with Kunal Sinha, O&M's executive director of discovery, Greater China in Shanghai, about the book on YouTube or on Youku.
SHANGHAI (AdAgeChina.com) -- By September 2008, China had 253 million "netizens" or internet users. The netizen population in the countryside, in China's 4th to 6th tier towns, makes up about 30% of that figure, possibly more. Low charges for internet access, widespread mobile phone services and mobile internet access make people -- especially young people -- think they can no longer live without internet.
In the very small towns, the internet functions as an information source for most people. But it's much more than that for Chinese youth, who are eager to change their lives. Their desire to embrace change is even stronger than their counterparts in the big cities.
Zhang Yafeng, 28, a store owner selling lights and small home construction and decoration materials in Weishi, Henan province, looks older than his counterparts in China's big cities. He already is a father of two children and takes care of his small store with his wife. They work every day, except on the eve and first day of the Chinese New Year holiday.
Mr. Zhang does not think this is a hard life. For him, the hardest part of his life so far was the time he spent working on a construction site to earn money to pay his high school tuition fee at the age of 16. Is he going to expand his lighting business?
"No," he says, "This store can only help us make a living. I'm going to do a new energy program."
He plans to invest in a plant to generate energy from corn. That plan took shape because of the internet, where he learned that corn extract can be converted into ethanol and ethanol can be used to fuel cars. He is now searching for investors and clients online.
"Let's face it," he says, "China doesn't have enough energy supply. You know, the extract from corn can be used to generate energy and our province Henan is a rich producer of corn. The investment is about 3 million RMB ($439,000). The three Northeast provinces and our province are corn-rich and electricity-poor. Shaanxi province doesn't have much electricity either. Risk? Of course, there's risk. But, won't you do it while you're still young?"
Zhang Huili, 30, returned home from Wuxi, in Zhejiang province, which is far more economically developed than his hometown in Henan. In Wuxi, six years of experience as a floor technician and then as a salesman enlarged his vision. In 2006, he bought the dealership of his former employer in Wuxi, Fengyan Electrical Bicycle, and returned to Weishi. Now, he is the dealer.
Like Zhang Yafeng, Zhang Huili does not concentrate on just his electrical bicycle business. Rather, he is planning to build a factory to manufacture cars.
"Not the cars you see on the road, my cars will use electricity as their energy source," he said. "I know there is a factory in Shandong. They're already manufacturing electric cars. The car sells for about 28,000 yuan ($4,100)."
Again, he got his information and does his analysis online. He showed me the web site of the Shandong manufacturer, Shifeng. The little red and green cars were quite cute.
Like these two young men in Henan, Lu Jiewen, a 25-year-old warehouse manager in a joint venture optical lens plant in Heshan, Guangdong, relies on Alibaba to build his business. He does not play online games like city kids. He searches for information about optical lenses. Selling the lenses on Alibaba is his first step towards achieving his dreams.
"The internet lets me know what I don't know," he says.
Having their own business is the dream of the most ambitious young people in small town China. In the very low tier areas, young people have fewer career options than their counterparts in the big cities. Starting their own business is thus the most practical and achievable option. They believe they can't do it without the internet.
QQ provides fun and privacy
QQ is where China has its online conversations. In 2007, there were 290 million QQ accounts in China. Everyone we spoke with had at least one QQ account. Asking people about their QQ ID in the small town seems just as natural as asking for people's mobile number in the big cities. They give their QQ number to anyone they trust.
In their QQ space, Chinese store articles and songs, collect information and pictures about their favorite entertainment stars, even write down their feelings. They can decorate this online room themselves using various colors and icons. It's a room just for the room's owner and their close friends. They can do anything they want there without worrying that their parents will invade the space and read their personal diaries.
Lv Zhiying, 21, has just graduated from a community college in Heshan and is looking for a job. Community college was not what she wanted, since she was quite a good student in her high school, but she failed her university entrance exam.
"Since then, everything changed," she says. Hepression is there to see in her QQ space. Her pen name is Lving Viva. On the cover page of her QQ space, she lists the lyrics in both Chinese and English of Viva La Vida by the band Coldplay. The song says, "I used to rule the world, seas would rise when I gave the word, now in the morning I sleep alone, sweep the streets I used to own."
In a café in Heshan, she said, "I'm writing a novel based on my own story, especially my failure in the university entrance exams," something she doesn't expect to publish or share with people. "It's only my expression of my feelings. I just want to talk about it with myself."
High school students such as Tan Zhifeng, 15, in Heshan and Chen Cheng, 18, in Jiangdu are happy about the privacy their QQ space offers. They post their feelings about female classmates. In Mr. Tan's QQ space, named "Picking Up Morning Flowers in the Evening," he created a flash animation that says, "I love you, laopo (my wife)!" and and stores cute, funny pictures of his girlfriend.
In Mr. Chen's space, named "Rush Steps," he has written about his sadness after a break-up with his girlfriend, memories of friendships, stories about school and his love for his parents.
QQ allows small town residents to express their views about the events that shape modern China. Zhu Hui, 22, in her QQ space called "Chanting," expressed how she was moved by the Chinese people's collectiveness and support after the May 12 Wenchuan earthquake last year.
The writing talent, independence, thoughtfulness about their schools, jobs and friendships are impressive. The freedom of expression in boy-girl relationships, which could not be imagined by Chinese just ten years older, is envied by older generations. They might live in very low tier areas; however, they do not lack the space and freedom to express themselves. QQ facilitates them.
Are online games all bad?
Both in big and small cities, online gaming is perceived by parents and the general public as an evil that is ruining and destroying the life of young people. Online gaming eats up study time and time with families.
Parents suspect online gaming will make their children more violent and isolate them from others. Young people who indulge in online games are perceived as "bad children." But talking with young online gamers sometimes tells a different story.
Wang Qiang happened to be in a store when we were interviewing his mother. His parents run three computer stores in Weichuan town in Weishi, Henan province. He had just graduated from the Luoyang Foreign Language Institute and was looking for a job. He looks like the typical "online gaming boy." He's thin and short and his pale skin suggests he spends far more time indoors than outside.
When he talks about online games, he becomes very emotional. He believes good games nurture positive morals and values for young people and that he has benefited from playing online games.
"Eighty percent of university students are now playing Moshoushijie ["a world of monsters"]. I don't think they are led in a bad direction by the game."
But he did not give a positive comment on Zhengtu [Journey] another massively multiplayer online role-playing game in which players can use money to buy better weapons and play at higher levels.
"Journey is not a good game. It encourages the feeling that as long as you have money, you can buy everything.
Another frequent online game player, Li Xiwen, 21, met two working class laborers in a game. They later met offline and have become goods friends.
"I treat the game as a society and you are actually part of that society. I was once the master of the Cyan Dragon Hall, leading 20 people. I had to lead them to fight. It's not an easy job to lead 20 people, you know. You have to let them admire you and thus you have to contribute much more than they do."
He also emphasized the importance of team work. "I treat them as a big family."
Do online games teach young people to be bad? Most game players don't think so. They say games teach them how to be a responsible person, how to deal with other people and how to treat friends and enemies. Bravery, contribution and sacrifice were the qualities that the young people claimed to pick up from these games.
Marketers should not ignore cyber cafes
If an advertiser has young people as it's primary target audience, it cannot afford to ignore cyber bars as a medium. Internet cafes are a leading hangouts for young Chinese, particularly in rural areas where there are fewer fun alternatives for youth.
"The internet speed in the cyber bar is much higher than what I have in my home. More important, playing with friends there is a quite happy thing to do," said Li Xiwen, who says he never plays online games at home.
The cyber bar has even become a dating place for boys and girls, since there are few other forms of entertainment. In Heshan, we found a cyber bar that provided a separate and more private area for young couples. Others have areas for girls that are decorated in very girly style.
According to I-research, China had 110,000 cyber bars by the end of 2007, the majority in the lower tier areas, due to the less advanced internet infrastructure available at home in those areas.
Star Net, a cyber bar chain in Guangdong province owned by a subsidiary of Guangdong Telcom, has 70 outlets. It has a near-monopoly, making it a must-use medium for marketers. Lenovo Group customized Star Net's computers. China Telecom and China Mobile have placed stickers on desktops, and commercials for both telecom companies play automatically after each computer is turned on. The snack and drink bar is run by Star Net directly and only one brand in each category is allowed. Only Coca Cola Co.'s carbonated drinks are sold here, for example.
The movies, TV series and other content viewed by young people are provided by Star Net rather than peer-to-peer web sites like PP Live, PP Stream and QQ Stream, which means Star Net can insert commercials into the content as well. Star Net's reach, monopolistic position and intimacy with consumers in small Guangdong towns makes it a powerful media format. Other provinces have similar operators.
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