Social Networks in the BRIC - challenges and Benefits

Study conducted by Challenges and BenefitsHabib MBACKEAs part of theInternational Management MasterFrom IAE Grenoble

Social Networks in the BRICSocial media has become an important part of our daily lives, both inprofessional and personal contexts. Indeed with 1.2 billion usersworldwide representing 82% of the online population, it is morepopular than internet activities such as email and online shopping1.Created to communicate, share and connect with people from ourpast, close relations or even strangers, company most often than notshould seriously take into consideration this tool if they wish to remainrelevant in this fast and ever changing technology oriented world weincreasingly live in now.Social media and particularly social networks are tools that integratethemselves perfectly in a world that has become more and moreinternational. It has the potential to be a useful medium when it comesto companies wishing to implement strategies to reach clients or toincrease the visibility of their brands, all of this often at a lesser costcompared to more traditional approaches.BRIC countries in particular with their strong economic growth andfuture prospective represent as of today a unique and unavoidableopportunity for any organization wishing to expend at an internationallevel. Social media can possibly assist in penetrating those marketswhile taking into consideration that by its very nature it is a mediumthat requires a particular social and human approach.The study was axed around three important marketing elements forany successful social media campaign:  Social media, brands and following  Brand and notoriety  Social media, brands and interactivityThrough a questionnaire, questions related to those elements wereasked to a certain number of consumers from those countries. Let ushave a look at the results.1 http://www.webpronews.com/social-networks-reach-1-2-billion-users-worldwide-2012-01Comscore white paper:http://www.comscore.com/Press_Events/Presentations_Whitepapers/2011/it_is_a_social_world_top_10_need-to-knows_about_social_networking 1

Introduction ………………………………………………………1Brazil and Internet……………………………………………..2Russia and internet…………………………………………….3India and internet……………………………………………….4China and internet………………………………………………5General use of social media…………………………………6Brand and notoriety…………………………………………….9Respondent profile………………………………………………12Conclusion…………………………………………………………..17

Key Figures in Brazil 79 246 740 internet users 39% of the population uses internet - Expected to- reach more than 86 million in 2012 63,9 millions social networks users Representing 74% of the online population and 31% of the total population - Expected to reach 79.3 million users in 2014Most popular social network in Brazil34,5 millions users 12,5 millions users 41,5 millions users

Key figures in Russia 67 982 547 internet users in Russia Representing an internet penetration of 49%Russia has the most important internet population in Europe in front of Ger-many and the UKSocial Network Users: 51.8 Millions users Expected to reach 62,2 Million users in 2014 Most popular social networks in Russia includes 40 million users / 31.5 million users / 11.9 million user

Key figures in India121 000 000 Indian citizens use internet Almost as many as the poplution of Russia with 143 000 000 Representing a little more than a 10% internet penetration The number of internet users in India is expected to increase to 221.6 million in 2015 76 100 000 use social networks users Representing 71% of Indian internet usersThe number of social network users is expected to reach 129.3 million users in 2014Most popular social network An estimated 45 millions Indian citizens use Facebook

Key Figures in China More than 530,000,000 Chinese citizens Expected to reach are oonline 711,6 Millions in 2016There is almost as much chinese citizen online asthe entire population of europe with more than730 000 000 inhabitnats Europe55% of internet users have initiated or participatedin an online conversation about brands Most popular social media 300 147 536 130 Million users Million users Million users Million users

Social Networks in the BRICGeneral use of social media67.2% of internet users from the BRIC countries utilize social mediaseveral times a dayInternet user from the BRIC countries tend to engage more with socialmedia than in other countriesEven though the BRIC have a relatively low level of penetration compared to other countries,the people that do use social media tend to really engage with it due to political, social reasonsor simply because it has become engrained in their way of living especially considering thatthey tend to also be consumed through mobile technology such as smartphones and tabletLinkedIn, Facebook and Twitter are the most popular socialnetworksThe most used social networks are the global onesConcerning the most used social media, the two most popular are Linkedin and Facebook atmore than 88% and 80% respectively with Youtube and Twitter being in third and fourth 6

Social Networks in the BRICplaces. This result can be explained by the fact that a majority of respondents were selectedthrough LinkedIn explaining its edge in this study.Facebook is the preferred social networks for following brandsin the BRIC countriesLinkedIn, Twitter and Youtube are distant second, third and fourthFacebook took the lead position at a strong 73.9% with Linkedin and Twitter in second andthird position respectively.Facebook as become and continue to be an inevitable network in most countries let alone theBRIC with the notable exception of China where Sina Weibo is gaining grounds.Users from the BRIC countries engage with more than fourbrands on average on social media networks 7

Social Networks in the BRICIn this graph we asked respondents how many brands they follow on social media with themajority answering five or more at more than 52% and a vast majority of respondentsgenerally following more than one.Users mostly follow brands related to servicesTravelling is a strong runner upServices are brands that are mostly followed by the surveyed at more than 60% followedclosely by travelling at 59%. A certain number of other options were left in the “other”section of this question and will be presented in the annexes. 8

Social Networks in the BRICGetting information is the principal reason internet users fromthe BRIC countries follows brands on social media networksOther reasons commonly offered as to why one follows brands on socialmedia are distant runner upsAsked why they follow their favorite brands on social media, a large percentage (65.22%)answered that they do so in order to get information. At a distant second, 10.7% of the peoplesurveyed answered that they do so in order to get exclusive reduction and rebates and toexperience interactivity with brands.Brand and notorietySocial media represent an opportunity for lesser known companies inthe BRIC countriesSocial media users from the BRIC are open to unknown brands but tend torely on buzz (friends, followers…) to discover new onesIn this series of question we can see that a slight majority of respondents disagree with thestatement do you only follow well-known brands on social media whereas they at more than 9

Social Networks in the BRIC33% and 41%, surveyed people agree with the statement “the popularity of social mediainfluenced whether or not I follow it” and “I am influenced by my contacts”.The notions of closeness, trust and buzz are all important element in thesocial media network experience for BRIC usersThe notion of trust on social media networks is more mixed for ourrespondentsAll respondents agreed with the statements provided in this series of question. Indeed theywere 53.7% agreeing with statement ‘generally speaking I feel closer to brands I follow onsocial media. 42.8% responded positively to the statement “I trust more information shared bybrands on social media with a strong part at 36.36% choosing the neutral choice. A strong64.6% answered positively to the statement word of mouth is a way for me to discover newbrands and finally more than 60% and 58% responded respectively to the followingstatements “I have discovered brands that I did not know previously thanks to social media”and “I have followed a brand I did not know thanks to social media”. 10

Social Networks in the BRICInteraction is likely to influence social media users in the BRIC countriesCommenting is not the preferred form of interaction with brands forsocial media users in the BRICOnce again a majority of respondents agreed with the different statements provided. 43%agreed with the statement “I am satisfied with the level of interaction afforded by brands onsocial networks. Almost 60% agreed that negative comments could possibly change theirmind about a brand with few a little more than 10% disagreeing with this particular statement.The last statement was least conclusive with a little more than 44% declaring that theycomment on social media networks. 11

Social Networks in the BRIC44.7% of respondents declared commenting on brands to share theirexperiencesA strong 31.7% declared to never comment on brandsAsked why they comment on social media, respondents indicated that they do so in order toshare their experience. 31.7% of people surveyed answered that they never comment and13.5% do so in order to help other customers.Respondent profileA majority of respondents are within the 26 – 34 years old age bracket with 35 – 44representing the second largest age group in this survey with a majority of male, 66.3%,answered the survey. 12

Social Networks in the BRICA large number of respondents have reached a post graduate level of education at 66%.ConclusionsWhen it comes to what social media to use we have two situations in the BRIC countries.Brazil and India are countries that don’t possess significant local social networks. This is anadvantage for companies wishing to develop their strategy there as they would deal withwildly popular social networks at an international level with which they are more than likelyalready familiar. The only drawback here could be language. Interaction with possiblecustomers in most cases would be more accessible and generally more successful if carriedout in the local language. Whereas English is a fairly popular language in India, meaning thatcampaigns could possibly be carried out in this language or at the very least a combinationwith Hindi, the most widespread of the spoken language in this country and English, it is alsoa country where there are several other official languages more or less popular depending onthe region.Brazil doesn’t have the same connection to the English language but possesses the advantageof having a single widespread official language, Portuguese.The situation for the remaining countries is different especially for China. In Russia both localsocial network, namely VKontakte and Odnoklassniki, and international ones such asFacebook and Twitter are popular giving perhaps in this particular country more popularplatforms to implement a strategy when compared to other BRIC.China is of course the country which would demand much more attention as it is the only onewhere local social networks are more popular than international ones. This means that acompany wishing to implement a strategy there must do so by taking into account not only thelanguage but also the peculiarities of those platforms, such as the fact that they appear to offermore advanced technological features to their users or again that the demographic of thevarious social media appears to be split by numerous variables.The Chinese language can represent an advantage due to the fact that more can be said withless meaning that tools such as Sina Weibo can actually be more effective in carrying out amessage than its international counterpart Twitter for example. However this study gives us a 13

Social Networks in the BRICmore nuanced view on this. The questionnaire revealed that even though local social networksare more popular than international ones, those are still utilized by Chinese social networksuser perhaps due to a general defiance towards government controlled and approved socialmedia networks, Chinese user reach out of their way to bypass restrictions imposed onFacebook and Twitter for the most part. In the context of this study, it is clear than local socialmedia should be prioritize as part of a campaign, international ones could also be possiblyintegrated as well even if it would be at a much lesser scale in this country.An interesting fact about China is the prominence of Sina Weibo. Concurrent RenRen andKaixin001 were popular but since the emergence of Sina Weiba, both of them have fallen bythe wayside so to speak. The questionnaire also reflected this trend. Moreso Sina Weiboseems to be a particularly interesting social network in the sense that it combines featuresfrom traditional platforms such as those of its closer aforementioned competitors but is also amiccroblog amongst other rich features thus presenting more varied and generally moreinnovative opportunities for brand strategy as illustrated by the enthusiastic comments thisparticular social media networks generated during the survey.Controversial and polarizing opinion on social media networks can havea negative impact on brands.This hypothesis has been validated in this study. When conducting a social media strategythrough social networks it is therefore essential to mitigate the consequences a flow ofnegative comments can generate. A company must not try to enforce policies that will forexample disturb the free flowing nature of a brand community present on social medianetworks but must on the contrary address criticism head on and provide solutions andsupport in a timely and reactive way showing by the same occasion that they listen to theirclients and are able to provide help if a problem should arise.Social media users in BRIC countries are likely to engage deeply with abrand online.This represents an important opportunity for companies wishing to expand their brands in theBRIC as social media users from those countries are proven to not only engage but are alsomore likely to trust more and feel closer to a brand present on social media.In practice this means that a successful marketing plan carried out in those countries have areal chance to succeed in increasing a brand visibility and number of potential followers. Ofcourse this must be done respecting what the users want. Through this questionnaire we haveseen that the surveyed are mostly looking forward to get information about a brand before allother reasons such a getting rebates and so on. A brand community should therefore beheavily axed around this element which has been shown to increase the level of trust andcloseness one feel for a brand.Social media users in BRIC countries feel close and trust brands online.One of the most interesting data found here concerns the results taken by countriesindividually where China appears to have the highest level of trust amongst the four countriesand Brazil presenting the lowest. This means that Chinese social networks in particular 14

Social Networks in the BRICrepresent a real opportunity for brands wishing to implement their strategy even more so thantraditional mediums. This is particularly interesting as certain studies suggest that a companyignoring social networks in this country could potentially be missing on certain demographicsaltogether highlighting how vital it is to integrate this medium in this country.The concepts of notoriety and popularity of a brand is essential in thesocial media world.The questionnaire highlighted the fact that the popularity and notoriety of a brand is not soimportant for our surveyed. This represents an opportunity for brands that are starting out asthis means that social media networks users are open to discover new brands through thismedium.Social media can be used as a way to federate followers through word ofmouth.In BRIC countries, social media is also used as a way for people to exchange their thoughtsand experiences with people that are more or not at all close to them. Through this study wehave seen that users are really open to the concept of word of mouth related to the concept ofbuzz marketing in this platform. It also shows that users are open to follow brands that havebeen recommended by a contact.In most social networks, brands update are shown through the user main page meaning thatusers will be casually exposed to them whenever they visit their personal page, what thismeans for companies wishing to implement such strategy is that there is also there a realopportunity to expose brands casually to followers quite regularly as we have seen that usersfrom BRIC countries tend to really engage with their social networks visiting them severaltimes a day.However we have seen that they also tend to follow 5 brands or more. While this is a sign thatfollowing brands is a sizeable part of the user’s experience of social media, following multiplebrands can also lessen the impact of brands amongst the sea of information that is generatedthrough frequent updates. This is an element that has to be taken into consideration especiallywhen choosing the most appropriate social media to use such as microblogging sites such asQQ and twitter or more general ones such as Odnoklassniki and Facebook.Interaction is important for social media users.Interaction for users, which is the basis of social media networks, is unsurprisingly important for users.The study revealed than a majority of users are satisfied with the present situation when it comes to thelevel of interaction afforded by brands even though a few comments were made in the questionnaireasking for more by a few surveyed. Commenting also appear to be a sizeable part of the social networkexperience which is an element that has to be taken into consideration when it comes to the impact ofnegativity previously discussed.In practice, the situation of social media use in the BRIC countries is divided in two situations:The countries that have their own popular social media such as China and Russia 15

Social Networks in the BRIC - The countries who almost exclusively use international social media like India and BrazilThe first case is more complicated for companies wishing to implement a strategy based aroundpopular social networks VKontakte and Sina Weibo, the two main social networks used in Russia andChina respectively. Whereas popular networks such as Facebook and Twitter are widely known for allthey can offer in a marketing strategy, aiming at implementing a strategy using those two probablywould be more problematic as both the language and the way they function has to be seriously takeninto consideration. This is even more true for China with Sina Weibo which appears to offer exclusivefeatures as said previously. This would require an extra investment in order to really grasp thepeculiarities of social media use in those two countries by hiring a third party such as an expert forexample.The cultural element also has to be taken seriously into consideration. One of the most surprisingelement found during this research is the fact that Chinese users are likely to post comments on abrand moreso than Brazilians users for example whereas basing a judgment on initial on generalstereotypes could suggest otherwise. Social media is of grander importance in China because itrepresents a way to bridge some of the communication gap that exist in this country thus explainingwhy Chinese users are not particularly shy in expressing themselves when it comes to brand in thisparticular media.The second case is easier for most companies as both Indian and Brazilians users prefer well knownand international social networks such as Twitter and Facebook. In practice this means that theywould require less specific investments for any managers that knows how to utilize as a marketingtool however just like China and Russia any social media campaigns launched through social mediahas to take into consideration cultural peculiarities that can represent a challenge and are detailed inthe questionnaire answers.To conclude, social media definitely represent an opportunity for companies wishing to implement astrategy in those countries however it is important to note that we are dealing here with countriesthat are still developing meaning that a large part of the population apart from China don’t haveaccess to internet for example thus a social media strategy wouldn’t necessarily reach a maximum ofcustomers even though the number of social media users is still relatively high and thus nonnegligible. Consequently at the moment a social media strategy should be more of a complement toother strategies based around traditional media for example. In the long term it will be interesting tokeep an eye on how social media will evolve in the BRIC countries as more efforts are put in place tofacilitate access and use of internet for their population. 16

The questionnaire was primarily distributedthrough social media networks LinkedIn, Facebook and Twitter. Previous students from IAE Grenoble University also took part in the study. A total of 412 people answered to the question-naire with 339 completing it (including those thatwere filtered) and 229 exploitable answers. Indiaand Brazil represented 27.4% of respondent each while 21% of answers came each. This study was conducted by Habib Mbacke. for any enquiries please use: habib.mbacke@gmail.com or Linkedin @ http://www.linkedin.com/pub/habib- mbacke/1a/988/3aa

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Social Networks in the BRIC - challenges and Benefits

by Habib Mbacke on Dec 10, 2012

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Social Networks in the BRIC - challenges and Benefits Document Transcript