Podcast transcript #63: Technologies are changing the approach to business: AI-driven branding in China
Find here the China Paradigm episode 63. Learn more about Clare Cheng’s story in China and the evolution of branding in China.
Matthieu David: Hello, everyone. I’m Matthieu David, the founder of Daxue Consulting, a market research company based in China and podcast China Paradigm. Today I’m with Clare Cheng, the co-founder of three different companies: 4in Group which you founded in 2004, GastronoMEET which you founded in 2016, and more recently, ClareKnows in 2018. So it’s actually a bit more than a year ago.
4in Group is a branding agency in China. You leveraged your community experience in branding, in communication, that you found this company 4in Group. Recently you started an AI marketing company called ClareKnows, which provided AI-driven branding in China, and that’s something we are going to talk about later on in the show. Thank you very much for being with us, Clare.
What’s the size of the company now? If we talk about 4in Group, what is served by the company, the clients you have served, and what is the size of the team? Can you give an idea to people listening to us?
Clare Cheng: I started my company 4in Group in 2004, AI interactive service in China. At the time our China staff realized the importance of branding. Originally, I’m from Taiwan and all my life is in brand marketing. I worked in New York and Taipei, and then when I came to Shanghai, I found a strong demand to do branding, especially at that time for Chinese companies who wanted to do their own branding.
For instance, they do an OEM where they provide sunglasses for Prada. So they said, “Why is the product we’re selling to Prada 100 kuai, but then they can sell for 1,500 kuai?” It’s because of branding, because it’s in Prada. So they started thinking about how to do branding and that’s how we started.
Then, later on, we have been working with international companies like L’Oreal and Siemens. Also, we do a lot of work for the government like an agency for Ecuador to promote all the Ecuador products, and we are also an official contractor for Italian Trade Commission. We work with many different companies. During the Expo, we promoted 60 different Italian regions during the World Expo in Shanghai.
Our position is very clear: we are the luxury lifestyle expert. That is why we are all working with the luxury lifestyle brand or promote that as our specialty. Last year, we helped the Thai government, DITP, to bring 10 Thai luxury brands to China. That is called Thai 10/10, it’s a perfect 10. Thailand wanted to make sure that people understood they have a luxury product, as well as a very good design. That was a kind of branding for a country.
Matthieu David: Could you just share about the size of the team, or any number about the revenue of the team, or the number of clients last year?
Clare Cheng: Last year we had about five million RMB. Our team is a small team, like eight people.
Matthieu David: Actually, you expanded from branding to marketing events and so on. Could you tell us what services you offer? I believe it’s more than branding now.
Clare Cheng: Yes, we do A to Z. To give you an example, for the event for the Thailand government, what we do is we advise them what kind of Chinese brand name they should be using, how to proposition to reach their KPIs, and then to find a PR, KOL marketing, and then we produce the event for them. So from A to Z, we will provide a total solution.
Matthieu David: We, as a podcasting company, we have interviewed before about three or four people in branding. I feel one of the difficulties, which I cannot understand yet, is how do those companies differentiate? How do you differentiate from others? It’s surprising to me that actually those branding companies, do branding for others, but for themselves, they have difficulties to be clear on what’s the differentiation. How would you say you differentiate yourself? And what would be your positioning?
Clare Cheng: As we mentioned before, when we first started in China, I knew we cannot compete with the local companies because we’re not local. So my position, it’s a luxury lifestyle expert. We do luxury lifestyle branding.
Another thing, maybe you are wondering why it’s called 4in Group, it’s because it’s from the four “in” words. It’s innovative, integrated, interactive, and international. It’s very clear that we provide those values to our customers. We are very creative and innovative persons, and we integrate all our resources in different platforms. We provide interactive service and make sure that the KPIs are internationalized.
Matthieu David: You created a company a long time ago now. It has been nearly 15 years. You started the business pre-iPhone, pre-smartphone, maybe pre-Taobao. How did you see the evolution of your clients, what they were asking, and the changes you have made?
Clare Cheng: Number one, branding is still fundamental. It doesn’t matter what kind of platform you’re using, you would need to have branding in every company. That’s why our core value is still there.
We started our company when TV and print media were popular, but now everybody is using the phone, social media. That’s the whole reason we are expanding our industry differently. That’s why I co-founded two other companies. The GastronoMEET is a social media platform for food and wine lovers to meet together.
Then what we found out now is we’re having limited data to too much data. How can you deal with this data? Say I have 10,000 followers, if everyone is asking one question a day then I don’t have to work. That’s why me with my partner – he’s an artificial intelligence specialist from the U.S. – we found that AI-driven branding in China is a way to use machine to solve a lot of data problems. That’s how ClareKnows was born.
In just seven months, we already won a couple of awards. Last December, we got the NTT DATA award, an open innovation award. This year also, we entered last fall from around the world in the Mobile World Congress as a startup. We actually not only have our MVP but also we already have our clients. This was a very short time to set up a startup and we produced a product and then got clients.
Matthieu David: How do you manage both? A lot of global service companies – consulting and branding – want to create a standard product. They can sell the same thing to a lot of people, which you cannot do in branding. So I believe that what you do now, you’re providing a solution, a software. How did you allocate your time? How did you move to? How did you make this change, which is very often very, very difficult? How do you organize both of the businesses?
Clare Cheng: Actually, it’s hand in hand. You think I have a lot of branding time but they will also need our AI-driven branding in China. So that is actually just to use my resource wisely. For the artificial intelligence, once you view that from the platform, you turn the data to be scalable. The whole idea is to scale a business. Because of my whole business of brand marketing, a lot of time, I need to spend time personally because branding experience is hard to train and transfer. So, ideally, to launch our AI software business is to be scalable, and that will be using less and less my time. That’s our whole vision.
Matthieu David: I feel you prefer to talk about actually the software now. Maybe we can move now on it. I’m also thinking about moving to the software ClareKnows later on. I went to your website and I tried to understand what you do. What I understand is that you are helping companies to automatize, making it automatic to interact with the audience like sales bot, social media manager, and Chinese social media outreach. So you’re able to recognize the picture, so you can actually interact with them. Could you tell us more precisely what this software is doing and maybe also what it’s not doing? This is not to mislead people who are listening to us.
Clare Cheng: What we do is we provide social media management in China because people who are born after 1990, 70% of these people are buying everything on social media, so we know how big the market is. What we do for the company is to help them with their social media management in China. AI-driven branding in China would give what the trending topics are at this moment in your industry, and you then can create, and when is the best time to publish what most of people read. Then after you publish, our sales bot can interact with the people one by one.
We set B2B to 1C. Then after that, we will analyze all the data, what’s the post reaching, when is the time most people read, and then you can analyze that data. So you’ll know how to meet your KPIs. This is just managing your customers and followers or friends. But how will you find your new customer?
With our Chinese social media outreach, we analyze the people who post on social media the pictures. For instance, sometimes you post you’re drinking coffee but maybe you just write, “I’m thinking.” Your text doesn’t mean what you are doing in that picture. We analyze the pictures or videos and we’ll tell you what is these people’s lifestyle, what are they thinking.
I’ll give you an example. Kobe Bryant, he’s a ‘90s ambassador. He has seven million followers on Weibo. Today, let’s say we analyze the picture that 1,000 people post Nike shoes on their social media. Then our data can analyze and find out, maybe among the 1,000 people, 50 people have more than half a million friends. So Kobe Bryant can actually work on Chinese social media outreach from his social media account to these people who are saying, “Hey, nice shoes. Good taste.” This will go viral because you will say, “Oh my God, Kobe texted me a message.” It can be a person, it can be a menu, or it can be a machine.
So, you can find out who is your target customer and what they are doing. As I said, there are too much data. How can you manage seven million followers? It’s impossible. How can we monetize this? So this is our tool. We do the whole ecosystem for social media.
Matthieu David: Understood. I’d like to know more about how it’s built because if you want to screen all the people who will post a picture of Nike shoes online, you have to scroll a lot of social media, you have to go through a lot of posts on Weibo. I don’t know if you can do WeChat, by the way, because WeChat is more difficult to get access to. You are going to scroll but it takes time to scroll over things, to scroll to so many pages. Could you help us to understand the potential, the limit, and how it works, so then we can really understand what we can do with the software?
Clare Cheng: What is that you can identify? What do you want to find out in the pictures? For instance, you say you want to find out people who post pictures in traveling. We would train our machine to recognize that picture. So if you see a picture of a girl playing tennis, the machine will tell you, “This is a girl and she’s playing tennis. And she wears sneakers.”
We’ve got all these key things from the machine. We train the machine on how to identify the pictures, how to analyze the message there inside the pictures. This machine will go through all the status to find out –
Matthieu David: But does it mean that we have to ask you to do it each time? Do we have to send to you the picture so that you’d train the machine, and we can’t do it ourselves on the software? It’s not very clear to me.
Clare Cheng: Okay. No, we’re doing it because we train our machine. Every client asks one different thing. For instance, we have a cookware client, they want to find out who likes to cook and has followers of more than half a million, let’s say. So the machine will scroll through people who have more than half a million followers and will find out app hosting, cooking pictures, or about eating cookies. Then we file those data, we give to the client to do their sales marketing. They want to provide the free pot for these people because they want them to use their pot and then say, “This is really good pot.” Since they have followers, they can go viral. For example, you give us a task, “What kind of people wants the pot?”
Let’s say you’re doing Chinese social media outreach for a luxury product, so you want to find out who wears the luxury product. It’s more likely when you are drinking water, you don’t post a picture. But if you are drinking champagne, you post a picture, “I’m drinking champagne.” That’s very good for the luxury brand to find out who their targets are so they can reach them either with machine, like create a message to the people.
Matthieu David: How does the software work? I open the software then I put a keyword, I put a certain kind of people I want to reach with a minimum number of followers. Then the software is scrolling the pictures and telling me which pictures are coming up, and then I answer each picture. How does it work?
Clare Cheng: Our software is actually the end part of the tool for social media management in China. We actually connect to your WeChat account. You can just log in and then you can just mention everything there. The keyword, that’s the first two products, a sales bot, and the management tool. We’re talking through your official WeChat account so they can answer all your friends or your followers’ questions. Then the Chinese social media outreach, we actually train the AI for you to identify the objects you want to identify and then we provide you the result.
Matthieu David: Okay. I understand you do social media management in China. As I understand, you interact with the followers you have through a sales bot, through AI interactive service in China, and if a question is too precise or too specific or you need human interaction, you redirect to a human. Okay, got it. This I really understand.
The second part, I understand less. I’m going to provide you a picture – what is Chinese social media outreach? What do you need to help us? What should I provide for you to be able to make it possible to get outreach?
Clare Cheng: Just tell me what actually you want to find out. That’s it. If you want to find out people who are cooking or you want to find out people who are traveling, or you want people who are posting luxury goods, just give us a task then we will train our AI to do that.
Matthieu David: Okay. So, one part is purely software and the user part is partly service because I’m going to talk to you and then you are going to provide a service, which is actually to train the AI and so on, and then send a solution. Am I correct?
Clare Cheng: Yes. It’s software and a service.
Matthieu David: Which platform can you use? We know that Weibo, for instance, is easy to scroll; you can scroll pictures and so on. We know that in WeChat, we cannot get the access to the moments of people, it’s only the official account we can scroll. What kind of platform are you using? I read that you’re also using Toutiao, right?
Clare Cheng: Yeah. For instance, for the Chinese social media outreach, we actually are mining most of Weibo. If you are using Facebook, we can mine Facebook and Instagram, and this is because these are more of like open data. But for WeChat, we can mine if they are your friends. For a lot of WeChat accounts, for instance, we can add as a person to be a personal account friend, because then we can mine your moments.
Some of our clients ask us, they just want to know what their friends are doing, what they are talking about, or what kind of picture they are posting. They want to understand their customers. For instance, if Budweiser, from all their friends, like to go to a disco, so then maybe there is a way for them to do marketing. That is helping you to find out what your friends are doing.
Matthieu David: What do you do with Douyin and Toutiao? I think they’re more difficult to track. How do you track what’s going on?
Clare Cheng: No. Actually, we have a way to get in there. We can mine that. Also Xiaohongshu. One of our clients just wanted to mine Xiaohongshu because it’s more like a luxury one. They have a lot of Xiaohongshu data but they don’t know how to do it, and so we can mine in those data and analyze for them.
Matthieu David: Do you connect with the API? Is there access using the API? Could you explain to us more because what we understand from Weibo is that you can, for Chinese social media outreach part, it’s easy to scroll Weibo? WeChat, we know it’s more difficult but if it’s your friend, it’s easy. What about Xiaohongshu, which is an app on the website, and Douyin and Toutiao?
Clare Cheng: They have a way to do it because of my partner. He is a technology genius so he’s doing that. There’s a way to do it but it’s a business secret.
Matthieu David: Okay, I got it. How do you price the solution? What’s the pricing if someone wants to use your solution?
Clare Cheng: For social media management in China, we have a basic one with limited functionality for free. Then an additional one will be a subscription to a paid service to unlock a lot of functions. You can have many different editing tools, AI tools, all these things. That’s with the paid ones. Then we have a premium one that we’ll tailor and customize for the client.
For sales bot, it depends on how complicated the data is. So if you just want your sales bot to answer the questions about the product itself, that’s an easy one. But if you want to do open questions, that will be much more expensive.
If it’s sales, we’ll be helping you to manage your Tmall, Taobao – that data is actually quite simple because it’s just your product – and those frequently asked questions (FAQ), that data is structured. But if you say, “I want to be able to answer everything about travel,” it’s too complicated because it can be, “Where shall I eat?” or “How can I get there?” That data is very complicated.
For instance, we have a lot of airlines come to us because they want the bot to answer traveling. We can then link to their live data about the airfare because airfare is changing all the time, so what they’re saying differs. We’ll be arranging this.
Matthieu David: I am on the website and I’m not seeing any way of getting access to your software on a free basis. Does it mean that I have to send you an e-mail to contact, and then you will give me some credentials?
Clare Cheng: I’m sorry because we have a demo. So by inquiry, we will send then the demo and they can understand how it works.
Matthieu David: It’s computer-based, right? It’s not an APP. It’s sort of broader.
Clare Cheng: Yeah. For instance, if you have a WeChat account, we can link to your WeChat, your website. We will send you a request and then you’ll accept, and then that will link it together.
Matthieu David: I see that you have three different cases, one is wine and wineries, the other one is hospitality, and the other one is events. Would you mind sharing it?
Clare Cheng: I work a lot with F&B clients, so that’s what we started with. Right now we have a wine bot doing AI interactive services in China. Wine knowledge is very broad and very complicated. There has been a big increase in wine consumption in China but most Chinese still have very little knowledge about wine. Sometimes they ask, “Should I buy this bottle or not?” or “What’s the flavor?” Our wine bot will recommend you, for instance, depending on what kind of food you’re eating, we will suggest you the matching wine. Think about you’re in the restaurant, you want to order a bottle wine but you don’t know what wine you should order. Sometimes you’re embarrassed to ask because of your date, so you can just ask a bot. They will tell you what kind of wine this is and if it will be matching your beef or steak or fish.
Our bot can help to also sell. We have a client who sells their wine on the e-commerce site. If you have different bottles of wine, it’s hard for people to remember everything, and then to search is also complicated. Sometimes it’s also very good for employee training. They can just ask, “How much is this bottle?” You can take a photo and they tell you what kind of flavor, what the price is, where to buy, and where to drink.
Matthieu David: What I understand is that your software has the ability to centralize also all the social media and to be able to provide AI interactive services in China with all of them because chatbots already exist in China from other formats, but what is needed is to centralize and also another layer you’re providing in your software is a layer of deep learning and learning from the pictures and post it and so on, also comment so that you can train the machine and interact automatically with people on an individual basis, and not the same method as everyone but individually different. Am I correct in saying that?
Clare Cheng: Yes, because everyone has different questions and they have different preferences. Normally, people do seven days, 24 hours, and immediately. So you might miss a sales opportunity. Our whole service is to help you to target the right people and then capture their needs, and then inquiry at the same time.
Matthieu David: How do you make sure that the right message is sent? We know that the chatbot and machines have made mistakes – machines built by Facebook, machines built by Google. Actually, having some assumptions on people is wrong. How do you make sure that your AI interactive services in China could ensure the right answer or the right comment?
Clare Cheng: We make sure of those answers. Make sure that it is consistent. Sometimes you have 10-20 salespeople behind the platform but everyone answers differently. AI interactive services in China is actually consistent. They answer you what you want them to answer. If they don’t know, they can refer you to real people.
Matthieu David: Does it mean that the answers which are posted by software are already designed, already written, and the machine is not designed to give any answer.
Clare Cheng: Yes. We train them. My partner, his background is using artificial intelligence for the finance position. The dataset he creates is a million dataset. We’re using that technology for marketing and AI-driven branding in China, which is much simpler because we don’t have these timing issues. So we are much accurate and much more precise.
Matthieu David: You mentioned, in terms of technology, deep learning and I understand it went down. But you’re using the word “flexible pipelines.” What does it mean?
Clare Cheng: Flexible pipeline means sometimes we find out the intent, so we can change the intent with a different pipeline. We know people sometimes they are asking this, but they are asking different things, so we would change that question to different pipelines.
Matthieu David: You’re talking about natural language processing. Does it mean that you recognize what people are saying and you can interpret even if it’s not exactly what the machine has learned in the past?
Clare Cheng: Yeah. The natural language processing, it’s what people talking about. As I mentioned, in the market, the NLP is not so good because the dataset is too little. We train the machine so we have millions of datasets, so we are much more accurate to understand what people really want to say.
Matthieu David: Before we end this interview, I’d like to talk about another activity you have, which seems to be more like a side activity, as I understand, which is GastronoMEET. Can you tell us more about why you started it and what did you do with GastronoMEET?
Clare Cheng: As I mentioned, I have a lot of F&B clients. I found out there’s problem like how should I support my client with our own resource? So we started to create GastronoMEET. You can see from the name, it’s “gastronomy meet” each other. This is the platform that we have to support our F&B clients with our knowledge of food and wine we provide for the people. We open up on where to eat, where to drink. Can I meet up with people who also like food and wine? That was the whole concept.
We have an official WeChat account. We publish articles about the restaurant we recommend, where we interview the well-known chef. We also have regular media events. That’s kind of a platform.
We actually grew into a global concept, which includes not only food and wine in the app but also travels. We have a city ambassador in Tokyo, Los Angeles, and other cities. So when people go from Shanghai, for example, to Los Angeles, and they say, “I’m going there on business but I don’t know anyone,” but you are under GastronoMEET so you can come to the city ambassador in Los Angeles, and they will suggest you where to eat, where to drink. If anyone wants to meet up with business people who come and visit from Shanghai, then maybe the local team, the members would like to know what does Shanghai looks like? What does working there look like? They share the same common interest – food and wine. They like food, they like to go to a good restaurant, and they enjoy food and wine. This is a common interest with travel elements.
Matthieu David: I see. Very interesting. If anyone listening to us would like to reach out to you for one of those activities, what contacts do they use?
Clare Cheng: They can contact my e-mail.My three phones – each phone has more than 5,000 people.
Matthieu David: So we go to the website ClareKnows, or they need to go find “Clare Cheng,” right?
Clare Cheng: Yes.
Matthieu David: Okay. Thank you very much for your time. I hope you enjoyed it, and I hope everyone enjoyed the talk. Thanks. Bye-bye, everyone.
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