Inside the War Against China's Blogs
BEIJING - It had the makings of an online crisis that could spiral out of control. A man in Tianjin had put a deposit on a Toyota (TM) Corolla, then started venting on the Internet when the car failed to show up after three months. Given the anti-Japan sentiment that rages in China's cyberspace, the griping created a big risk for Toyota—something the company learned four years ago when it was attacked for ads seen as disrespectful to Chinese.
Enter Daqi.com. The Beijing-based firm spotted the disgruntled consumer's postings in one of the 500,000 online forums it regularly searches. Before the topic could draw much attention, Daqi put the buyer in touch with Toyota, which pressed its dealer to deliver the car. "Even one negative consumer comment online can end up influencing many customers," says Zhou Chunlan, Daqi's CEO. "This is a great challenge for global brands." A public-relations agency representing Toyota says the company has worked with Daqi but declined to address the specifics of this incident.
Daqi is one of a new breed of company that helps multinationals navigate China's perilous Web. Nike, (NKE) PepsiCo (PEP), McDonald's (MCD), French cosmetics maker L'Oréal (LRLCY), and others have hired the likes of Daqi, fellow Beijing outfit Chinese Web Union, and Shanghai-based CIC. These companies charge $500-$25,000 monthly to monitor postings and squelch negative information or to create positive buzz.
This year has brought the Net monitors plenty of opportunities to win clients as hot-tempered bloggers have attacked global companies for perceived slights to Chinese culture. Coca-Cola (KO) and French retailer Carrefour were lambasted for what was seen as support for Tibetan independence. McDonald's, KFC (YUM), and Nokia (NOK) have been tarred for allegedly being stingy with relief money after the Sichuan earthquake. And Citroën had to apologize for an ad featuring a scowling image of Chairman Mao. "If it touches on nationalism, or if the client clearly made a mistake and disrespected a customer, that's dangerous," says Sam Flemming, CIC's founder.
When online commentary turns negative, the monitors assess whether it might flare up. They figure out who's generating the criticism—an irate consumer, a nationalist teen, even a rival. Then they consider how fast the complaint is spreading, and whether it's likely to be picked up by Web portals such as Sohu and Sina. "You know it's a crisis when Sohu (SOHU) or Sina (SINA) has created a special page to collect all the news articles and aggregate comments," as they did when bloggers angry about Tibet called for a boycott of Carrefour in April, says Flemming.
The companies also can help clients win sympathy. Metersbonwe Group, a domestic apparel retailer, faced eviction from its flagship outlet in Shanghai last year when the local government wanted to replace Chinese-owned brands with big names such as Nike and Adidas (ADDDF).
Daqi seeded the Net with opinions linking the issue to a simultaneous controversy over Starbucks' (SBUX) presence in Beijing's Forbidden City. While Metersbonwe ended up losing the space, Daqi says the pressure helped the retailer win a lease for a larger store. "In Internet forums we said: A Chinese brand is being pushed out while a foreign brand is still located in the Forbidden City,'" says Daqi's Zhou. "We got intense and rapid response. People were very angry." Metersbonwe confirmed that Daqi helped with the Shanghai case but declined to comment further.
Plenty of companies are willing to pay for positive spin. PR outfits hire students to write postings that boost certain brands and criticize the competition, says a staffer at a Western PR firm in Beijing. The job description of one online help-wanted ad reads: "Publicize and popularize [products] via online forums and blogs. Send at least 50 propaganda posts per day." Workers are offered 1.5 cents per post.
Chinese Web Union is candid about doing this. It pays thousands of people to write nice things about clients, and it compensates forum leaders who spread positive information and quash bad publicity, says CEO Zhong Zhaochuan. "We write out topics and give them to members to put on forums," says Zhong. That's what CWU did for a big Subaru dealer last year. The Japanese automaker had raised the ire of Netizens because its Chinese name sounds like "death to the Eighth Route army," which was perceived as insulting to a Chinese unit that battled Japan in World War II. CWU urged forum leaders to delete negative comments, then asked its writers to post positive news about Subaru, Zhong says.
Daqi and CIC say they don't pay bloggers, but both companies acknowledge pampering online opinion leaders. The Internet companies invite these people to sessions where they can test and discuss new products. CIC, for instance, introduced L'Oréal to a popular blogger on women's makeup, a twentysomething man who calls himself "big brother Nicole." The French company has invited Nicole to events for its Lancôme brand and even flew the makeup-wearing Netizen to Paris. Conventional advertising "is focused on saying: My brand is good,'" says Philippe Lamy, a vice-president at L'Oréal China. "When someone on the Internet says it—an independent voice—it's different in terms of the credibility and influence it has."