Retailers shift their ad spending from TV, radio and print ads to digital ads.
While Facebook is blocked in China, some 300 Chinese retailers are promoting their wares to consumers in other countries via the social network.
While the Chinese government blocks access to Western social networks like Facebook and Twitter, Chinese online retailers have begun advertising on Facebook to promote their wares to overseas shoppers.
Beijing-based online marketing consulting company Zoom interactive Co. signed a deal with Facebook Inc. in June 2013 to sell ads to Chinese companies that would appear in local languages on Facebook. Web retailers have been among the first to try out those ads.
“We helped Facebook recruit about 600 clients in China, and half of them are e-commerce companies that sell to overseas buyers,” Zoom interactive international business development manager Xu Zu tells Internet Retailer. Among those clients, Xu says, is LightInThebox Holding Co., a web-only retailer based in Beijing that generates almost all its sales outside of China, with 65% of revenue coming from Europe in the fourth quarter of 2013. LightInThebox is No. 28 in the 2014 Internet Retailer China 500 and No. 140 in the Europe 500.
Facebook provides an alternative for Chinese retailers to advertising on Google for Chinese companies seeking to reach overseas shoppers, Xu says. “Search engine keywords ads can turn marketing spend into sales instantly, while ad spending on Facebook may require four to six weeks to generate stable returns,” Xu says. But he says that the return on investment on Facebook is higher, at $3 dollars profit for every ad dollar spent, versus a two-to-one ratio for Google spending.
Facebook appears to be responding to the opportunity for further expansion in China. In a recent online job listing Facebook said it was hiring salespeople in China and planning to open an office soon in Beijing. Facebook didn’t immediately respond to a request for comment.
Other overseas online ad platforms are also seeking to sell ads to Chinese companies. Two months ago, Russian search engine Yandex and social network VKontakte signed agreements with Zoom Interactive to sell ads to Chinese e-retailers seeking to expand into Russia, according to Zoom Interactive.