Say goodbye to crystal balls, here is Big Data in China
Some say that it may soon allow us to predict the future, while others see it as the worst nightmare for privacy protection. In China, where access to secondary data is difficult due to lack of transparency, Big Data in China offers great opportunities to get an infinite amount of data to understand consumers better and predict their behavior. Thanks to it, Chinese companies will be closer than ever to their customers.
What is Big Data?
Big Data is a term for datasets that are so large, complex or diverse that traditional data processing applications are inadequate to collect, manage, and analyze them. Although the term is not clearly defined, a widely accepted definition of Big Data is the “3Vs” model of Doug Laney, analyst at Gartner: “Big data is high volume, high velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery, and process optimization.” Big Data is high volume since it does not sample but tracks what happens. It is characterized by a high velocity because it is available in real-time, and it is varied as it gathers text, images, audio and video.
Big Data includes data from traditional and digital sources collected both inside and outside a company, and represents a source of ongoing discovery and analysis. The potential is especially large in a country like China, where more than 721 million Internet users, that is, more than the double of netizens in the United States, continuously generate behavioral data. To give an idea of the gigantism of Big Data, the state-owned Industrial and Commercial Bank of China (ICBC, in Chinese中国工商银行) alone had amassed 4.9 petabytes (or 4,900 terabytes that equal to 4,900,000 gigabytes) of data in March 2014. The Big Data in China is expected to grow by more than 60% in the years coming and reach a total revenue of 46.29 billion yuan in 2019. Since Chinese are more used to sharing information about their lives with their government than in many Western countries, why not with private companies too?
Why Big Data in China is useful for your company?
Big Data is poised to become one of the most significant technology trends with the potential to disrupt the way organizations use consumers behavioral data to analyze and transform it into valuable insights.
Currently, the primary use of consumer data for companies is extracting preferences and patterns of purchase to offer highly targeted value-added products and services, according to Daxue Consulting. But Big Data can also help businesses answer their “big questions”:
- Target audience tracking – What is our target audience doing online?
- Customer journey evaluation – Do we understand the customer journey and the impact it has on sales?
- Digital spend tracking – Have we created the adequate strategy to achieve maximum penetration?
- Online sentiment and opinion analysis – How is our product perceived online and can we change it?
- Content analysis – Is our campaign captivating and resulting in sales?
- Competitive analysis – Are we competing effectively against competitors?
- Category benchmarking – Is our product succeeding compared to those of competitors?
- Market entry analysis – Are there new market opportunities?
All the industries can benefit from the use of Big Data: technology, telecommunications, banking and insurance, e-commerce, advertisement, logistics. For example, data on consumer tastes and activities can be collected from the payment service in WeChat to be analyzed to help online traditional industries such as finance and logistics, as explains Tencent Holdings’ CEO Pony Ma Huateng. JD.com uses big data to manage inventory and set efficient distribution routes. Alibaba’s Open Data Processing Service (ODPS) analyzes millions of transactions and has allowed to set up a highly effective loan service for small online businesses. For a small fee, retailers can also use Alibaba’s ODPS to identify trends and plan future campaigns to meet the exact requirements of their customers. Sales, marketing, operations, transportation, finance, and social media monitoring can all involve Big Data.
To extract consumers insights from Big Data in China, data go through a three-step process:
Big data in China on consumers are collected from
- Search engines: Baidu 百度, Sogou 搜狗, 360 Search 360搜索
- E-commerce websites: JD.com 京东, yihaodian.com 一号店, dangdang.com 当当网, amazon.cn 亚马逊
- Social media: WeChat 微信, Weibo 新浪微博, Zhihu 知乎, QQ
- Video platforms: QIY 爱奇艺, Tencent Video 腾讯视频, Letv 乐视网, Youku 优酷
- Companies and organizations official websites
- Mobile APPs
Data can be gathered from computers, mobile phones, tablets and TV boxes.
Big data companies often work with telecommunications companies (also called “Telco”) such as China Unicom, China Telecom, and China Mobile. They provide an enormous amount of data about search behavior and APP usage, collected from the 3G, 4G, and Wi-Fi networks in China.
Due to privacy protection, consumers’ personal information such as name and address are not collected, but data like age, gender, employment status and income level are available.
The three biggest players in China’s online industry, known as “BAT” (Baidu, Alibaba, Tencent) are also leading in the Big Data in China. Their ecosystems limit data collection by other companies: no data can be collected on Alibaba’s Tmall, on WeChat only data from public accounts can be gathered.
This step aims to extract information from a data set and transform it into an understandable structure for analysis. Data is first cleaned to remove the errors and ensure consistency and then mined.
When it comes to discovering the useful information behind the data and use them to improve their business, Chinese companies tend to fall short according to Li Yang, Assistant Professor of Marketing at the Cheung Kong Graduate School of Business. It may be linked to the fact that companies have trouble recruiting data scientists, who have very good job prospects but are enough for now on the Chinese labor market. Plus, extracting value from data requires companies to adjust their processes and build new capabilities at scale. It is a significant adaptation that cannot be completed overnight, which explains the fact that companies face barriers to adopt Big Data in China.
Information obtained from this process can then be validated by offline research methodologies such as surveys in China, focus group discussions, and in-depth interviews that Daxue Consulting can perform for your company.