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China Post, Direct Mail, and Data!
Date: December, 2010 --
Rumors have been circulating in the data community and its close cousin, direct marketing, about a mysterious China Post database of consumers. The database is rumored to run to hundreds of millions of files and to be housed in a state-of-the-art facility in Beijing. We have heard from at least three visitors from the United States to that facility that China Post is extremely eager to monetize this asset. In fact, some of our sources claimed that they were offered "exclusive" representation of this database for the American market.
Some of this was cleared up recently by the launch of a website by China Post's direct mail and database marketing organization in China and its related website at www.chinapostdm.com.
According to published data, the buildup of direct mail as a marketing tool in China is steady, but ad spend is still low. According to China Post, in 2008 it was 2% of the 2008 ad spend of 190 billion RMB, or $570 million. So direct mail has some growing to do. TV enjoys 13 times that amount of the ad spend. What is still needed are addresses and lists.
That is one of the many things China Post is working on, and it now claims to have 100 million contacts derived from its own records, credit bureaus and local data compilers. The data covers a number of demographic, credit and lifestyle datapoints: middle class households, VIP members of Clubs, "Shopaholics", Senior citizens, Hobbyists, consumers with higher education, etc.
In addition, they have a B2B database which they claim is multinational, with data from 70 developed countries. The data is claimed to cover 2.4 million companies, 23 million products and 3.5 million "decision-makers" from those 70 countries. They also claim "99% deliverability". With the average B2B database deteriorating at 20% or more per year, that is a bold claim indeed.
Much of what China Post is doing to develop direct mail springs directly from the educational programs of the UPU's Direct Mail Advisory Board, and promoting the growth of databases is one of the first steps in the formula for development recommended by that body.
In fact, according to postal officials and residents in China, the volume of mail to residences is still well below that in developed countries, although there is no published data on this point. There has been a leapfrog effect in terms of marketing choices, with the Internet and mobile probably absorbing what does not go first to outdoor, television, and to the press.
Nevertheless, as businesses get more sophisticated, the economy grows, and ad spend increases, direct mail will receive its share. This is a long-established pattern that will be repeated in China. It is probably already beginning. A 2009 survey showed that 80% of enterprises in China increased their investment in direct mail compared with 2008, and China Post's revenue from direct mail enjoyed double digit growth from 2005 to 2008.
China Post's delivery record is rumored to have serious problems, but from everything we hear they clearly are trying to please foreign mailers and are giving service choices, at least on the website.
Another important thing we have learned is that properly formatted letters addressed in the English alphabet are now machine-translated on arrival using a newly-developed program made public at the Universal Postal Union last Spring. In the past, teams of hundreds of postal employees would translate the alphabet addresses into Chinese characters.
The computerized process reduces the undeliverable rate substantially since it eliminates the human errors of transliteration and bad handwriting so common in the past. China Post is also considering upgrading its delivery point database. If this is done, delivery point validation on customer intake won't be far away.
Be sure to let Data Services, Inc. standardize, correct and validate all your address data prior to mailing into China to reduce undeliverable returns and overall mailing & production costs. If you’re mailing in the local-language, be sure to ask about Data Services’ China-Complete data processing services for multi-byte character sets. Once that's done, assuming you've got good prospects and a decent offer, your response rates should go up.