In the lesson IEMS 5720—Social Networking, I have learnt how the social networking has changed the world. As a student from Mainland China, I will discuss the economic impacts that social media brings to China.
1. The great economic potential and jobs created
As the country owns the largest population in the world, China also has the most Internet users on-line. The latest number is about 550 million, which has published in the December 2011 (see the figure below ).
2. The great power of social media
The rapid developing social media has really contributed a lot to the e-commerce business. With the new technology of social media, it will be easier for the company to publicize their products. They can just put some advertisements on some major social media sites like Renren or Weibo, and the huge number of this network users will see.
Social media also has greater influence on purchasing decisions for consumers in China than for those anywhere else in the world. Chinese consumers say they are more likely to consider buying a product if they see it mentioned on a social media site. Also they are more likely to purchase a product or service if a friend or acquaintance recommends it on a social media site. This can be explained in part by a cultural difference: Chinese consumers prize peer-to-peer recommendations because they lack trust in information from news sources and advertising; people rely more on word-of-mouth from friends, family, many of whom share information on social media.
3. The E-commerce in China
China will be the world's biggest e-commerce market by 2015. Social media will play an important factor in their purchase decisions. The Chinese user has spent the maximum time in the world on shopping on the Internet , and that is more than 5 hours a week .Chinese people ,especially young people ,like the way shopping on line .They prefer to buy things from such e-commerce site like Taobao ,not only because the price is relatively lower ,but also this has save them much trouble in choosing things from the mall .So there are indeed some reasons that e-commerce in China is popular and will be more popular .
4. A win-win method
In my opinion, the social media marketing is a win-win method for both of the consumers and business men .For the business men, they will indeed sell more and earn more with the advantage of the social media. For the buyers, that means they can buy the stuff they need in high quality with a reasonable price. Just like the example presented in the famous economics book《Principles of Economics》written by N.Gregory Mankiw. When firms sell differentiated products and charge prices above marginal cost, each firm has an incentive to advertise in order to attract more buyers to its particular product. The advertisement posed on the Internet or some social websites dose not only tell you the customers some information ,such as functions and prices .They are also serve as the signal of quality of the goods. What the advertisements say is not as important as the fact that consumers know ads are expensive. The company makes an increasing number of advertisements with the advantage of new technology such as social media and social websites.
The online qualitative review system is another good example. It enable social environments to collect users’ opinions .That will also help the consumers know more about the goods from other user’s experience . Usually these things will not be told by the sellers. At the same time it helps the company know what the buyers want their product be. So they will modify their products to match the public taste.
1. http://www.wikipedia.org/
2. McKinsey Company (2012).China’s Social Media Boom.
3. N.Gregory Mankiw. 《Principles of Economics》.
4. http://socialmediatoday.com/ .May 9,2012,《How People Spend Their Time Online》.
Your analysis is so rigour and illustrate your ideas with a lot of figures.What's more, I think the power of social media mentioned in your article are interesting,so could you explain that why there are more and more companies prefer to use the network advertisement rather than advertisement in other media？
回复删除Now more and more people use the Social networking sites like Facebook and Twitter(in mainland is Renren and Weibo).It's cheaper to make advertisements on these sites and it will be seen by great amount of people(especially young peopel).Another reason is now many people buy things online.When then see the ads on the Internet, they can just click the link and buy it . They need not to go to the supermarket.It's very convenient.
删除Your article has given the discussion about the economic impacts of social media in China, such as more job opportunities and development of E-commerce. But from my perspective, there are many drawbacks with the development of social media.First of all,since the advertisement increases dramatically, there might be more fault information flowing freely to mislead the consumers to make a wrong choice.And the consumers would be confused with these overflowed context. Also,the ideology of choice is all-pervasive in today’s society, and has contributed to growing feelings of anxiety and inadequacy among consumers.
回复删除Thank you very much for your comment. I agree with what you say.
删除Indeed, with the fast growing Internet and E-commerce, we have seen too many ads on the web everyday. Most of these ads are useless to us and some may even be misleading. But we can't deny the fact that social networking has contributed a lot to China's economy growth. At the same time, it also brings us more pressure in life and somebody say it has made our life even more complex. I suggest the government make some regulations and laws to protect the customers' rights.
“the social media marketing is a win-win method for both of the consumers and business men” I can never agree more on this. The social networking brings convenience to consumers while enable business men to make money. And this win-win method is a path to promote the development of social networking.
回复删除Your blog is very interesting and I agree with most of your opinion. However, you mentioned in your blog that customers in China are more influenced by social network site. I didn't agree with that. Most of my friends hate to see ads in their weibo or renren, let along be influenced by them. I don't believe the product that SNS introduced to me. It's just like the ads on TV, and maybe even more boring.
回复删除This is just my point of view. We can discuss about this.
> ... that means more and more technical workers is needed.
回复删除Yes, that's true, social media/networks has created many jobs for technical works. As you mentioned social medias are also good for publish advertisement. This makes me to think of the spammers on social networks. :-) We all receive spam emails, but recently spammers seem to be quite active on social networks as well. Although I never click the links they posted, but definitely there are people clicking otherwise the spammer have no incentive to post. I think spamming(or publishing ads links) on social networks also creates lots of jobs in China.
in a way, i think social media is killing traditional media, still cant tell whether it is good or bad
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