Globalization is changing the way companies operate beyond their borders. The world is connected more than ever. The amount of cross-border bandwidth has grown 45 times larger since 2005. There is exponential growth concerning opportunities and challenges.
Western companies are strategically expanding in the East despite economic instability and other uncontrolled factors. Technology has facilitated the progress of this global economy. Digitization – with the internet and other emerging technologies – has made it easier for startups and small-medium enterprises in the West to reach out to their global customers.
And companies can’t ignore the second largest market when we talk about the internet such as China. That’s why adopting a multi-faceted approach to business growth is indisputably important.
Translation and localization play crucial roles in the global economy where Chinese language is used by more than 1 billion people and ranks as top 1 on the world’s most spoken languages.
Language and culture are the currencies of today’s globalization, and companies understand that adapting their services and products for their international customers will affect the growth of business.
Why Translation is Not Localization?
Before investing their time, efforts and money on translation and localization, companies always consider the ROI (return on investment). However, before anything else, we must identify the differences of these two for the benefit of those who are in the planning or R&D stage.
Translation process involves the translation, transcreation, and proofreading of texts from its original language to another (e.g. English to Chinese translation) It is the process of conveying the message with consistency from its original country.
Localization, on the other hand, involves the process of translation but goes beyond the translation of texts – it includes the changes of colors, designs, the process and communication channels and even the sources of raw materials, spare parts, logistics, and among others to make it relevant to its target audience’s culture and habits. In short, localization adds cultural touches.
The concept of localization is fascinating, yet challenging at the same time as international brands should re-think their marketing strategies for long-term results rather than for quick sales while finding a balance between localization in Chinese and maintaining their brand identity.
Fortune 500 Companies Investing on Translation and Localization Efforts
Contrary to the common expectation that unstable economy yields negative effects on companies, the situation is spurring companies to change their outlook and ambitions by expanding to international markets, particularly in emerging countries.
Research firm Common Sense Advisory conducted a survey among Fortune 500 companies a few years ago and discovered that despite the economic uncertainty that time, their investment paid off in terms of revenue growth.
Companies that augmented a budget for translation or internationalization efforts were 1.5 times more likely to receive an increase in total revenue.
While the increase in total revenue is a good indicator that translation efforts have significant ROI, the same study revealed the revenue itself was not the top driving force for translation. Companies that invest in translation efforts are more concerned about customer service, branding, and market share – indicating that most of them are customer-focused.
The study also highlighted that “Roughly three-quarters of Fortune 500 firms added new markets – either international or domestic multicultural – over the past year.” The internationalization efforts prove that there are huge opportunities across the border but there must be a calculation of potential risks and barriers as well throughout the planning stage.
China Focus: Capitalizing on Consumers’ Purchasing Habits via Translation and Localization
There were 77,469 million registered companies in Mainland China by the end of 2015 and with a daily average of 12,000 startup companies being registered. There’s a growing presence of foreign-funded companies in the Mainland accounting to 481,200 by the end of 2015 and the government is continuing its efforts to make the environment attractive for foreign companies.
There are various factors to consider why western companies and neighboring regions are focusing on China. From an opportunistic point of view, e-commerce has been China’s trademark all over the world, with over 3.877 trillion-yuan ($589.61 billion) record spent on online goods and the rise of middle class, including their preferences on imported products. 58% of Chinese shoppers purchase imported goods from domestic websites.
Extracting insights from The New China Playbook by the Boston Consulting Group, there are three major forces that shape the Chinese consumer market:
The rise of upper-middle class not just in major cities but on emerging cities (companies were advised to be on the lookout for tier 4 or lower cities).
The emergence of a new generation and their digitally-savvy and well-connected lifestyle.
The ubiquity of e-commerce in retail industry and the shift to “mobile lifestyle.”
Foreign companies are taking advantage of in their creative ways:
Estée Lauder’s used an indirect, yet creative approach to engaging with the consumers. Instead of selling its flagship of products directly, the Clinique brand launched a drama series called “Sufei’s Diary” that had 40 episodes where viewers can watch it online daily on their dedicated website.
The skin care products were still part of the plot, but Clinique’s drama series was an entertainment rather than an advertisement, which gone viral and garnered more than 21 million views online. Instead of using traditional advertising via TV ads, they took advantage the power of videos and social media.
Localizing communication channels and partnering with local players
Dove understood the importance of localizing communication channels and the strategy for launching a social media campaign to promote beauty among women, regardless of body types and looks. Dove partnered with Ugly Wudi, which is one of the famous TV show, an equivalent of the US show, Ugly Betty and weaved the Real Beauty message.
Stories pique people’s curiosity and so Dove weaved their message into story lines and initiatives, including a blog by Wudi and online chats. The effort paid off as the campaign generated millions of searches and blog entries, and the ROI of the campaign was discovered to have four times more than the traditional tools like TV ads.
Offline to online strategy with a local partner
Walmart is not giving up on China and took a jab on its rival Alibaba through its partnership with JD.com. While the country is known by foreign companies to have the toughest market, Walmart swapped its Yihaidian platform for a 5% share in JD.com. With 400 brick and mortar stores, they’re taking in an offline to online strategy to increase their sales.
The partnership allows JD.com to take control of the nationwide logistics and warehousing networks, including the 150 million users, taking it to e-commerce, as they reach digitally-savvy middle class. And with JD.com plans to use self-driving delivery cars and drones and build automated warehouses and distribution centers, both companies are expecting growth in the future.
Prizes for the win to build customer database and brand awareness
Coach was creative to build a customer database and simultaneously create brand awareness in their Coach Footprints campaign. They encouraged their customers to provide all their information for an opportunity to win a luggage tag worth $82 (RMB 500). They use Weibo to launch the campaign, and so every day they select a lucky fan and posts the winners on the brand’s official Weibo page.
The result? The re-posts have increased by 13% user engagement by 50%. What’s more, the brand increase 157% of followers in just 5 days. What’s amazing is that, aside from engaging with their customers and fans, they had a chance to build a database in China.
Launching Chinese websites to start somewhere
Google might be blocked in China, but it has its way of reaching out to the world’s largest internet market. How? By translating their developer’s website into Chinese. They launched the Chinese version of the developer’s website that aims to help developers to learn more about their services and technologies, and also new applications.
Google offered the Google’s Developers Agency Program to China’s software development agents in the start of 2017 and provided more opportunities for Chinese developers to be part of the global community and
Starting from 2017, the Google Developers Agency Program will be open to China’s software development agents. It will join hands with more Chinese partners for growth and development of the global community.
Understanding China as a Closed and Opened Market At the Same Time
As we look at the success stories above, it only shows that translation and localization play an integral part in every marketing strategy. Foreign companies should start to understand that China is still a closed market in a digital sense as YouTube, Google, Twitter, and Instagram are not allowed, which makes it easier for local players such as WeChat, Weibo, and other platforms to grow.
However, the culture and lifestyle of customers in mega cities are the same as the person who lives in New York or Dubai. They love foreign brands and highly favor those that are in good quality. While it could be a different view from the rural or developing cities, generally speaking, language, trends, and the localization of strategies will help companies better understand and engage with their market.
As Jack Ma pointed out in Davos conference, companies today should focus on the 3 30’s. Focus on the next 30 years, and then those who are 30 years old now who are the internet generation, less than 30 of employees. Because according to him, the “Next 30 years is critical for the world.”
There’s a playbook on business growth that every entrepreneur should understand when doing business in China.