CHINA OVERVIEW - A SITUATION SIMILAR TO INDIA
Mailing Lists (India) Pvt. Ltd. (MLI), Indian DM Specialists, would like to share with you the direct
marketing developments in the China market as per Publisher's Multinational Direct, September 2004 issue.
It has relevance considering that China and India are both rapidly growing markets and MLA being present
in both markets is hopeful to help grow the direct marketing industry.
Of special significance is the segment below on "How can you rent local lists?" - where major domestic and
international mailers are accepting the option (in principle) to supply list data to an approved lettershop
in Hong Kong for de-duping, lettershopping and dropping mail from there by direct injection into China Post
(Shanghai, Beijing etc.). Unless this happens the direct mail industry will not begin to get off the ground
in China due to listowner unwillingness (with good reason) to release their data within China.
A similar situation exists in India. We hope
to propose a similar offshore solution (for the time being) where
DM packages are
produced cheaply in the Philippines perhaps and mail lettershopped there and dropped into Indian Post by direct injection
(under commercial documentation) or by the postal system (under CN postal documentation with rates based on
a bilateral agreement between the Philippines and India)? The latter would be cheap and more reliable.
We hope that in due course the Indian mailers and listowners too are open to
a similar arrangement with MLA. This way we can circumvent and undesirable grey list market which prevents the DM
industry in India from getting of the ground.
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Publisher's Multinational Direct, September 2004
START NOW TO PLAN YOUR ENTRY INTO THE CHINA MARKET
China will offer unprecedented opportunities for international publishers who get in early. The economy is
growing at 8 percent per year and is already the fourth largest in the world.
Here is an observation by Charles Prescott, vice president international for the DMA, who just
returned from a trip to China. Learning English and learning business seem to be the two most popular
subjects, according to Prescott. Bookstores are crammed with translations of US business books, videos, and CDs.
Here's How to Begin in China
PMD talked to James Thornton, managing director of MLA, a direct
marketing firm with offices in Hong Kong,
the Philippines, and India. According to Thornton, China has taken over from India and is now more responsive
to new-subscriber acquisition mailings than any other market in Asia, based on feedback from publishers with
regional offices in Hong Kong. These publishers are mailing both international lists with addresses in China
and targeted list with local addresses in the Chinese language, but with payment options in US dollar bank
drafts, postal money orders, or international credit cards.
Payment Using International Credit Cards Is In the Beginning Stages
Estimates of the number of cardholders who can purchase goods and
services internationally vary. Paul Smitton, managing director, International Customer Loyalty Programs
(ICLP), Greater China, based in Hong Kong, puts the number at about one million. A large percentage of the
population holds debit cards, which can be used for payments in local currency only. Conversion of the
local currency (renminbi) into dollars is possible, but complicated.
A "toe in the water" approach would be to mail the China addresses of subscribers and buyers of international
English-language publications and other lists pre-identified as English speaking.
Here's a Capsule of a Few of the Lists Out There
Your lists rental sources will probably have some names in China. Include them in your multinational
campaigns from an offshore point to help you learn about the market
| The Economist |
1,209 |
| McGraw-Hill Business Leaders |
2,840 |
| National Geographic |
3,384 |
| Asian Business Publications |
2,853 |
| Major European Corporations |
4,127 |
| Harvard Business Review |
1,101 |
| Fairfax Business Research |
9,426 |
| Oracle Magazine International Subscribers |
5,432 |
| American Chamber Of Commerce |
3,232 |
| Global Sources Magazines |
13,848 |
| Economist.com (opt-in e-mail list for China) |
3,928 |
| Foreign Investors in China |
11,298 |
Leading International Publishers Are Starting Editions in Chinese
It will take a while for publishers to build a reasonable subscriber base promoting English-language
publications. A faster route is a local edition in Chinese. For example, Newsweek has a licensing
arrangement with a Hong Kong-based Chinese publisher for a monthly magazine called Newsweek Select,
according to Francois Verglas, managing director, Newsweek International. This publication features
selections from Newsweek covering lifestyles, medicine, the economy, and more. Controlled circulation is
about 80,000. Other magazines embarking on Chinese editions include Fortune, Business Week, Harvard
Business Review, and Forbes.
These editions offer advertisers an opportunity to promote their products in a fast-growing market.
Print and promotion costs are in local currency, but advertising is sold at international rates in hard
currencies to companies in North America and Europe.
Joint Venture and Licensing Agreements Are Favored Ways of Entering the Market
Until recently, a publisher couldn't enter the market with a local edition without a Chinese partner.
This is no longer required, but setting up on your own may be a more formidable step than many publishers
are willing to undertake.
One approach to keep entry costs low would be to publish newsletters and special reports in Chinese.
These could be promoted from offshore or possibly within China.
ICLP has a wholly-owned subsidiary of its Hong Kong company which operates in China,
according to Steven Hay, director of loyalty development. Partnerships may have their advantages,
but the wholly-owned subsidiary provides freedom for heightened creativity and entrepreneurship.
ICLP is developing customer relationship management programs for the market, and can assist with
various services, such as Chinese-language databases, merge-purge, dedupe, telemarketing, etc.
Using Local Lists Requires Different Handling Procedures
You must have a local agent to receive payment in local currency and fulfill copies-daily,
weekly, or monthly-on your subscribers' behalf. Copies must be cleared at customs and taxes paid.
There are five or six candidates for managing this task, including China National Publications and
World Marketing Group (WMG) working through Bantu, an official importer of international periodicals.
Bantu has an exclusive agreement with WMG and can remit to offshore publishers in US dollars, less taxes
and clearance charges.
How Can You Rent Local Lists?
Most list owners in China are reluctant to release addresses to mailers or third parties within China,
says Thornton of MLA. The preferred option is through a recommended Hong Kong (or sometimes a US-based)
lettershop. The lettershop will issue a security agreement guaranteed under Hong Kong or US law entitling
the list owner to compensation if the names are copied or used twice without permission. Right now, most
list owners are willing to try this solution.
Forbes China, Chief Executive China, and Fortune China are willing to rent names under the
conditions mentioned. For consumer publications, some leading China-based mail-order catalogers and
book clubs are willing to rent and release lists on a trial basis. One reason is that the list owners
(who are also mailers) are endorsing a process which allows the owners to de-duplicate names and
personalize addresses.
You Can Save Money and Speed Up Delivery and Increase Response by Dropping Mail Directly into Local City Postal Areas
Direct marketers can have mailings lifted from Hong Kong and dropped directly with China Post agents in
Shanghai, Beijing, Guangzhou, and other cities for delivery in those areas at local rates plus a small
handling fee.
Here's Some Advice for Publishers Who Want to Mail from Their Home Markets or Other Offshore Points
1. Add "PEOPLE'S REPUBLIC OF CHINA" on the last line of the address if you use a local list. Check any
other lists you use to make sure the country is properly addressed.
2. If you are using international lists and mailing from a foreign point with addresses in Roman
characters, China Post may translate the addresses back (except for the name of the addressee and business)
into Chinese characters to expedite delivery. Actually, translation is not done by China Post for mail
addressed to the major cities.
3. China Post will not accept mail addressed in Roman characters at all for mail dropped inside China.
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