3 Lessons Subscription Businesses Can Learn From China

Time used to be when China had a strong reputation for being a copycat, especially in terms of appropriating pioneering technologies and producing counterfeit products. However, these days, China is emerging as a trailblazer and instigator of some of the most innovative practices in the world today, including those within the realm of sales and marketing.

Consider, for instance, that paid online content is a highly profitable industry all over China now, and it comes as quite a surprise for experts who compare such phenomenon to the advertising-based model of online content in Western countries such as the United States.

Chinese online content providers that utilize automatic subscription billing are making millions of dollars every year. These include the popular Chinese app De Dao, which offers curated information in the form of articles, opinion editorial columns, streaming videos, and even e-commerce. Compared to Americans who feel and demand that online content be free, Chinese are more than willing to pay for online content. How come this is so?

Cultural considerations

Industry experts weigh in that there is a big difference between the two cultures. Primarily, entertainment options in Chinese media are very limited given strict government controls, and thus people are inclined to seek content that makes their life more fun and interesting.

Westerners may be shocked, or amused at best, by the banality of paid online content that Chinese subscribers pay for—anything from instructional and educational tutorials on how to do the simplest daily tasks, to livestream videos of people engaged in community activities like singing, playing games, or just going about their daily business.

Local migration is also a sociological trend in China, where millions of young workers move from far-flung provinces into large, industrialized city centers. This occurrence in part fuels the abovementioned demand for amusement and entertainment, because these individuals seek connectedness being separated from their family and friends.

Paying for online content

Experts further analyze that there are a number of things that Western content providers can learn from this unique phenomenon in China, so that they can make paid online content more viable and attractive for American consumers.

Adapt the “freemium” concept

This is a consumer psychology strategy that gives people a certain amount or level of services (or benefits) for free, while making them pay extra for upgrades or add-ons. This concept started in the gaming world, where players can enjoy a game for free until a certain period or until they reach a specific level before would need to start paying for an extended or upgraded gaming experience. This has proven to be an effective strategy in pushing paid content in China, and something that can be used in many other subscription-based content services.

Improve mobile payment systems and increase usage

Interestingly, in China millions of paid online content subscribers utilize mobile phone payment systems rather than credit cards or other online methods. The prevalence of affordable mobile phones from local manufacturers coincided with economic growth and consumer spending, and thus the country adapted to mobile payment methods more quickly. For many Chinese, their first connection to the Internet was through their mobile phones and not through computers or laptops. This is an area of improvement that Americans can pick up on. While mobile phone penetration is already high in Western countries such as the United States, the habit of mobile payment is not yet well-established.

Customize content even more

A key factor in the Chinese market is the high degree of curation and customization of content being provided. Content developers give a lot of options and cover a wide range of interests and preferences of consumers.

Subscription-based online content providers can benefit greatly from these insights from the Chinese market, and make their businesses more profitable. At the same time, they can create more meaningful and engaging content, and in turn retain a greater population of users and subscribers.