As China transitions towards consumption, brands are aggressively positioning marketing budgets towards modern media. Across the board, spending on new forms of media increased from 20% of marketing budgets in 2012 to 43% in 2015, and is expected to reach 60% in 2016. Modern media refers to content made available on the internet and mobile devices with rich user engagement, such as “gamified” content, which is often trackable in real-time. Modern media promotes active engagement and user interaction, sharing content and facilitating discussion around products and services, rather than the traditional “one-way” consumer messaging. Also, modern media is particularly effective with China’s millennials, who now number more than 415 million and drive a constantly rising share of total consumption in China.

As the way people access, process, utilize and publish information changes, brands are adjusting their marketing strategies to effectively target customers. A recent survey highlighted this growing importance of consumer engagement, citing that in 2012 fewer than 30% of consumers felt that engaging with brand content at the point of sale would increase the probability of a transaction – this number rose to 72% in 2015 and is tracking towards 80% in 2016.

Modern media provides near real-time feedback

In the past, traditional marketing campaigns could take weeks or months to determine if they were successful. Today, Chinese consumer companies can understand in near real-time the number of views, likes and shares of a specific branded message, allowing them to pursue a “trial and error” approach of testing smaller scale campaigns in target regions before a large roll out. Instant feedback allows quick and informed decisions to be made, helping avoid unnecessary spending on campaigns that do not deliver strong ROI. One of China’s most active brands, a spirit producer selling under the brand Jiang Xiao Bai, delivered more than 1,000 messages on social media last year, helping drive a more than 200% increase in sales.

Achieving scale can create commonality

In his book, “The Crowd, a Study of Popular Mind”, Gustave Le Bon wrote that opinions of individuals immersed in a crowd will revert to the norm of the group. Modern media allows messages to be quickly shared across platforms and can take an individual idea or concept to the masses, and help develop a common understanding of a brand message – all achievable with limited spending as the process rewards creativity. Successful consumer companies are able to deliver messages that resonate and transition from an original thought into a concept which reaches millions of potential consumers.

Changing Drivers of Customer Loyalty

Modern media is fueled by sharing and referrals, pushing companies to focus on the quality of their products, records of safety, and retaining key opinion leaders to serve as brand ambassadors across social media. Within the Lunar portfolio, I Pinco Pallino and the Little Star Brands have benefited from leveraging celebrity endorsements at key events, receiving promising traction on social media and becoming leaders in their categories.

During Lunar’s early days when we built and successfully exited our mobile platforms, we observed that Chinese consumers are very quick to adopt new technology and communication tools and often leapfrog their western counterparts. This codified our approach to learn from on-the-ground lessons and recycle experiences throughout our portfolio. Our success with e-commerce and modern media at Little Star has already benefited Yonghong’s e-commerce strategy and will facilitate innovative marketing strategies going forward for new businesses coming under the Lunar platform.