When private companies need to raise funds to expand their businesses’ day-to-day operations, they may not have access to the same financing options as public companies, which can issue stock or bonds to the public market. Private companies borrow the money they need by obtaining loans from private lenders and in exchange make interest payments along with repaying the loan’s principal upon maturity.
China Private credit market overview
China’s central government has recently initiated a deleveraging campaign to reduce the amount of corporate debt in the economy. That’s why corporate borrowing, in particular to private companies, is where we can find the vast majority of opportunities for international credit investors today.
In 2018, it is estimated that just over US$ 9 billion of capital was raised in private credit funds which were available to be set up into Chinese credit opportunities, the highest on record. A further US$ 6 billion has already been raised in the first half of 2019. In 2018 corporate borrowing accounted for the biggest portion of private credits with US$ 20 trillion.
New opportunities will concern, for example, investing in pools of performing consumer loans or providing leverage on buyout private equity deals.
If you want to find potential customers in China, read this article.
How can private credit companies get customers in China?
The most important thing to attract customers is to have good visibility in the Chinese market.
In 2020, China has 1.400 billion people, 64,5% Internet penetration, up 4.9% from 2018, and 882 million active users on social networks. On average, in 2019 every day a Chinese user spent an average of 6.2 hours of the day online on mobile devices, 11.3 percent more than the same period last year, according to a report published by research firm QuestMobile.
The numbers speak for themselves: establishing an online presence on the channels used by Chinese internet users is essential to make space in the market, intercepting profiled users interested in our products and services.
The first thing you need to know about digital marketing for the Chinese market is that it presents substantial differences compared to the strategic model that we use in Europe.
The channels and the way they are used are different, but the way of communicating and relating is also different, given the cultural and linguistic distance that separates Western countries from China.
Being visible on Chinese social networks and search engines is the key to success.
Build a strong e-reputation for your private credit company in China
The reputation is essential in China. Chinese people rely a lot on it especially when it comes to the finance sector. They do not easily trust new brands or companies. To be competitive in the market, you must work on your reputation online, and you can do it through many and different channels. Let’s see which are these channels.
Q&A: Toutiao and Douban to educate your clients on your services
To establish long-term trust Toutiao and Douban are the best solutions. Toutiao is an application owned by ByteDance that acts as a news aggregator. With more than 200 million active users and content receiving 4.2 billion views every day, it is considered the first platform for content delivery. Its peculiarity is that it is integrated with artificial intelligence and machine learning software, which creates a personalized newsfeed for each user. In this way, everyone sees what best suits the content they interacted with in the past. Toutiao is therefore an excellent database of consumer information and one of the best Chinese apps for targeted advertising.
Douban was launched in 2005 and it now has 300 million active users every month. It is a social network dedicated to the most disparate content. You can find discussions, advice, judgments, and reviews. It is mainly used by rich people living in the first and second tier-cities and by white-collar workers. Private credit companies can use Douban to:
- Interest-based advertising;
- Direct advertising to users,
- target towards the market niche of the platform.
Baidu: a powerful tool to be visible on the Chinese market
In China, the reference search engine, with more than 70% market share, is Baidu. Baidu Brand Zone is the highest form of Advertising on the Chinese search engine.
Baidu Paid Ads: Brand Zone
It allows you to create a mini-site that can be positioned at the top of the results, and it can be linked to the keywords connected with the name of the brand.
Different templates are available that allow you to use videos, photos, social links, e-commerce, structured within the space available. The site must obviously be in Chinese. In any case, the search engine reserves the approval of the operation, following an evaluation of the traffic generated and the brand in question
The Baidu Advertising platform is comparable to the Google Adwords platform in terms of functions and methods. There are several tools available to the platform.
One of them is The Pay per Click. It allows you to target specific keywords and position yourself in the top positions of the search results for them. Payment takes place only when the user clicks and then accesses the advertiser’s site from the ad.
Baidu SEO: Qualitative Traffic
If you are well positioned on Baidu’s SERP (Search Engine Results Page), you will surely be noticed and many leads will be generated. But how to do it?
The operations can be the same as you do with Google but locally, in China. It means you have to host it in China and translate it in Chinese. The operation requires more than a simple translation. In fact, it is necessary to understand the local culture and idioms to optimize the operation. Seo off-site is therefore the construction of a network of links to your site by other “authoritative” sites where authoritative is always related to the judgment that Baidu makes for your keywords.
PR to give authority to your private credit company
PR is a marketing tool that consists of having an authority profile talking about your company. It can be media (newspapers, blog..), KOLs or even community or forums.
PR has the advantage of lasting in time and get you covered by trusted people on third party websites which gives you legitimacy.
Since it can be very difficult to get a press release, agencies like Gma can help you.
WeChat: Excellent tool to manage followers and Customers
To communicate in China it is essential to have a WeChat account. It has 1.165 billion active users per month and it is a super app, used to send messages, to pay, and also as social media. Subscribing for a WeChat service account, companies can send 4 notifications per week to their followers and communicate with them.
An important tool of WeChat is the groups. They are the fastest and easiest way to distribute content to WeChat users interested in your type of product or service. Then, most likely one user will recommend your services to other users and your followers will increase.
In China word-of-mouth is an essential brand-building tool for companies. Therefore, Wechat groups can reach a larger community and have better visibility. Businesses should consider Wechat groups as a forum that provides useful information and develops a relationship with the audience.
Last but not least, we have to mention the WeChat CRM. It is a great tool to communicate with your customers and it’s similar to a newsletter. You must remember that in China people don’t use email when doing business. WeChat CRM answers automatically to any questions your followers may have, to welcome new ones, offers special discounts, etc.. You don’t have to spend time doing it, because the App does it by itself increasing the trust level of your followers.
PrimaDollar: an example of success in the private credit market in China
PrimaDollar is a trade finance company. They offer simple, low cost, and transactional trade finance for importers and exporters on a global basis. They recently entered the Chinese market and they have now promising numbers.
They have mainly worked and invested in Baidu Seo, Baidu Pay per Click, PR, Leads, WeChat, and Q&A forums.
With time and work, their Brand name keywords related to “PrimaDollar” is now ranked in first place on the first page of Baidu Search. They have now around 5657 page views and a bounce rate of 45.77%, which is a very good result.
For PrimaDollar brand’s word-of-mouth communication, they also got good results. Not only there’s a lot of PR about PrimaDollar in Baidu search, but with time and the assistance of SEO, PR also has a good Baidu ranking.
WeChat public account has maintained a steady growth of reading volume and fans. They are continuing to use group forwarding and circle of friends forwarding to steadily increase the number of readers and fans and select and write the current hot topics related to the PrimaDollar business and promote the PrimaDollar brand.
Do you want to enter the Chinese private credit market? We can help you
GMA is an expert in Chinese digital marketing since 2012. We have worked with many big or small brands with our expertise in SEO, social media marketing, PR, etc.