Jorge Luzio works for Coca-Cola as the Greater China Marketing Director for Sprite and Fanta. Digital marketing in China is a real science, and today's recording is a masterclass.

[Trailer]

JL: But my biggest sort of 'aha moment' is like more of the commonalities that we have, rather than the differences. I don't want to talk about 'differences', but rather 'nuances'.

[Intro]

OF: Welcome to Mosaic of China, a podcast about people who are making their mark in China. I'm your host, Oscar Fuchs.

So last week's episode with Astrid got a lot of nice feedback. Thank you to everyone who commented on Instagram, Facebook and WeChat. I was teased a bit for saying 'ATM machine'. It's true, I should have just said ATM. Otherwise, what I'm saying is 'Automatic Teller Machine Machine'. I actually do the same thing with 'PIN number', so what I'm saying there is 'Personal Identification Number Number.' I don't know, maybe there's something Freudian going on here, maybe I'm just nervous when withdrawing money from my bank account. What does that say about me, I wonder?

One of the connections between last week's guest and this week's, is that Astrid mentioned her WeChat 朋友圈 [péngyǒuquān] for the place that she finds out most of her news. So, in English, this is your 'WeChat Moments', and what I forgot to explain last week is that this is the equivalent of your Facebook timeline, or your Instagram feed, here in China. In fact, Maple in Episode 02 of this series also said that her WeChat moments was her main source of news too.

So this is the handy link to today's episode with Javier Luzio. Jorge works for Coca-Cola as the Greater China Marketing Director for Sprite and Fanta. There's a lot in this conversation about WeChat, and the way in which marketers are using this platform, as well as those owned by the other big giant Alibaba. Now, when I was younger, I really thought that marketing was just a study of common sense. Well I was wrong, especially when it comes to digital marketing here in China. This is a real science, and today's recording is a bit of a masterclass. We talk about some of the really interesting market insights that Jorge and his team discovered about the Chinese consumer, and we talk about creativity in general in China. We also talk about China's unique digital landscape, which is dominated by Alibaba and Tencent. This last bit especially, while being an easy lesson for any marketing experts, may be a little dense with information for everyone else. So to those people, let me say that you have nothing to worry about, Jorge is a great speaker, and you'll be lured in by his Latin charms. Having said that, there's one part in the middle where I myself got a little lost. I only truly understood what Jorge was talking about when I heard it through a second time. But if he's talking about his experience with the Schweppes brand, then that's a sign that you've already made it through the hardest part.

Jorge and I jumped straight into the chat without any 'hello's and 'how do you do's, so let me quickly introduce him again. This is Jorge Luzio, the Greater China Head of Marketing for Sprite and Fanta. He's originally from Venezuela, and he had an international marketing career with Coca-Cola in Caracas, Bogota, Atlanta and Mexico City, before coming to China.

[Part 1]

OF: What is your object that you brought in today?

JL: Well, it could sound a little bit lame, but actually I brought a bottle of Sprite.

OF: That's a very straightforward object. So tell me then, what is your current job concerning Sprite?

JL: I actually wanted to rephrase, a little bit, the way Sprite is now in China. My point of view is how can we can find more stickiness, and a deeper relationship with consumers, in a more emotional way. Because I think that refreshment, as it is right now, it's very generic. And there are a lot of people talking about generic refreshment. It's not that we've been attacked by other refreshment propositions, but it's a diluting of what is the role of Sprite in people's lives. So we need to keep reminding them, that actually it could be more emotional than just pure refreshment.

OF: So you're refreshing the refreshment brand?

JL: In a way, yes. Yeah. I'm kind of refreshing the emotionality of how we can use a brand to have a deeper relationship, that is more intimate with them, with Chinese consumers.

OF: Well, let's get straight into that part then, so where do you even start? Like, how do you work out what the Chinese consumer wants?

JL: So when it comes to China, about that, you start to understand "OK, what are the key levers of consumption that you need to attack?" Where it's like, Sprite is the biggest brand of the Coca-Cola company in this country. Having such a big brand, it's a brand that… You don't need to do much about people getting to know Sprite. But to help, as I mentioned before, to have a deeper connection, deeper interaction of people, more frequency to drink. To be more relevant at different occasions, rather than drinking occasionally.

OF: Right. And so, how do you pinpoint what those moments are?

JL: The most important thing is mixing art and science. The science part is getting the data, is getting the right facts to understand a particular business issue, or a particular opportunity that we have with our brands, or with our portfolio, or with the projects that we have. So that's big data, that's understanding different data sources, and having clarity on how to get this data, right. And the other part is more like the art, which is like mixing real deep insights, anthropological studies, understanding and talking to consumers in a more intimate way. So it's all about mixing all this data to get the right facts behind some hypothesis that you want to validate, in order to create things. And then the other part is like how you can mix your… Actually, most of the time we use common sense. And we use our stomach to filter this hypothesis that we created with the data, to mingle it with something that makes sense, and to craft a particular strategy.

OF: So let's go to the first half then, where you're doing the actual research. And you mentioned the anthropological side as well. So when you give me an example. Like, what was one of your insights that you found out about the China market that you didn't know before?

JL: One of the things that I found - that's a little bit different than other countries that I've worked with - it's about pressure. And social pressure becomes something very, very relevant in terms of China. China is a country that has developed dramatically over the last 40 years, and that has opened to the world over those 40 years. And this has generated a lot of pressure on people, on how they can define success, and how they can strive for some aspirations that have been somehow imposed on them by this hectic idea of what success looks like. And it's something that surprisingly permeates different tiers of society, by age, or by socio-economical status, by income, and even by regions. So it's very wide, in terms of how the social pressure guides a lot of their their thinking, and the way they interact with consumption or with brands. So that's the striking one for me at the beginning.

OF: Yeah, that's a good example. And so, having learned that, did you devise a strategy or a certain campaign around that knowledge?

JL: Yes. For instance, Chinese New Year - CNY, we call it - at CNY, people are… Even though it's a time to connect with their family, it's a time to have a family gathering, it's a time to enjoy being together… For most people, we have understood that it's a moment of a lot of pressure. It's not only the the emotional cost - the emotional and physical cost, like money, that you need to spend to go there - but actually, it's time where there's a lot of mental pressure. Why? Because - talking about this societal pressure that people have in their mind - it's also the time to get a 'formal' informal interview with your parents. So, the figure of the parent is so important here - and especially the father - that you need to go there, to explain to your father, what is the scorecard of the year, in a way. How much money are you earning? When are you going to get a promotion? When are you going to get married? When are you moving, are you getting a bigger house? What is the brand of your car? What do you think your boss thinks about you?

OF: Yeah.

JL: So that's a lot of pressure. And there's a lot of burden around that.

OF: And I guess it's not just your father, it's the whole extended family as well, right? Your uncles, your…

JL: Yes, of course, of course. And it's a moment for "So, what should I tell them? How do I look smart? Not lose face in front of my family?" There's a lot of things at play around that. So, coming back to what the heck refreshment means around this, it's about this mental pressure that puts you into a very difficult moment. When you need to step back a little bit and say "You know what? You shouldn't take this kind of thing that seriously." Because the whole brand expression, the whole brand tonality and language for Sprite is very casual, it's very informal, it's about daring to be really authentically who you are, you don't need to be imposed on by anyone else. So we found that this a very, very deep insight, and we're playing around that. We started this year, with our CNY campaign, and we're evolving to make it even more relevant, more tangible, and more emotionally compelling to our consumers. So I think, in that way, how you can find a big insight into the consumer is based on societal evidence - or a societal fact - and transforming into a powerful insight. It's very interesting.

OF: That's a great example. And I guess that was something which you may not have known personally before coming to China. Like, what other assumptions did you have before coming to China?

JL: Well, several. Especially about thinking "Oh my god, they should be so different", right? Not only because we look so different to each other, but, like, the culture should be so different, the way they do things, the way they act. And yes, there are some societal things that differentiate us. But my biggest sort of 'aha moment', when I first started to work and collaborate and design things for them, is like more of the commonalities that we have, rather than the differences. I don't want to talk about 'differences', but rather 'nuances'. We all have the same needs. Apart from the fact that the penetration - or, like, the per capita - of tea, or some herbals are bigger here, actually, the interaction with consumption - and the interaction with beverages - is quite similar.

OF: What about in terms of the team - you know, the other marketing team here in China - did you have any assumptions about how it would be to work with other Chinese employees?

JL: Yes. Because you hear that… It's kind of this, like, myth - or social myth - that, you know, Chinese are super good at executing things, and copying things, and replicating things, and so in that way they're not very creative. Then I said "Ah, it would be very difficult for me to develop strategies with them, or to create something, or to develop something that is very creative". And I was really, really surprised. I started to interact with them. And yes, they're machines of working. Which I actually really envy in the way that they're so resilient. And then they're very good at executing big projects - and big, complex projects - in an amazing way. I would never do that… We don't have these kind of capabilities in our countries. But when it comes to creativity strategy, they have found a way to be really pragmatic in using the kind of economies of scale that they've generated - and have been good at - and taking it to the next level. And I think the instrumental tipping point to take that to the other level is digitalisation. And it's how everything is so digitised right now, and how it has been evolved dramatically, the way we use digital - and digital ecosystems - to take these ideas, and these massive, repetitive things into something that is like out-of-the-box insight generation. So they have creativity, they have other soft skills, but it's represented in a different way.

OF: Right. And because the digital landscape here is so different than anywhere else, I guess there's a unique skillset here. Maybe this is the right time to actually explain what that landscape looks like. We're talking about the things like WeChat, the things like Weibo and Alipay, all the things that we have in China that don't exist elsewhere, right?

JL: Definitely. It will be very difficult to replicate in other parts of the world. Actually, one of the things that we want to do, as a company, is to really understand what the key things are that we can replicate in the rest of our world. In my initial thinking, we can replicate 40% or 50% of the things that can be achieved here, or that we can activate here. So basically, there's like a duopoly here in terms of big data of information, which is WeChat/Tencent Group and Alibaba Group. So they basically own the whole data-mining and the whole data landscape in China. And this is something very unique, that you cannot replicate in other parts of the world. First of all is the scale, right. So the penetration of digital here is more than 95%. And especially in a country that has 1.4 billion people. So just by that measure, the scale, and the amount of data that you can process and you can get, and all the iterations that you can use behind that massive amount of data, is unprecedented in any other part of the world, that's number one. Number two, I think it's about digital payment. And digital payment, if I remember correctly, is more than 80% penetration. So imagine this 1.4 billion people and multiply by 0.8, it's incredible, the math. It generates a trillion interactions, in terms of money going from one point to another, it's something that in any other parts of the world - not even the U.N. all together - can get this massiveness. And if they could, it would take too long for them to to achieve that. The other part is like the richness of how you can get - and how you can design something behind - this big data, right. So WeChat, as you know, it started as the competitor of WhatsApp. Or no, let me put it this way, because actually, there's an interesting thing that I found when I came here. And it's about one concept that is named 'Imminovation', which is like 'imitation' + 'innovation'. And this is something that struck me, a lot, when I was here. And WeChat is an example of that. Because it started as a 'WhatsApp', right. But then they said "OK, how I can take a WhatsApp and make it into a super app?" And it's not about chatting, and sending photos, and sending voice notes to people. It's about – and you know this, because you live here – WeChat is our life. Everything to do with our life – or the lives of people that live here – can based on, or solved by, WeChat. Right? Because we can chat with it, we can pay with it, you can have your social networks around it, you can purchase things in e-commerce through it, you can have stimuli and you can have like a different entertainment around it. So everything is there. So marketers like us, the biggest thing, as a start, is understanding different levels of connections with with consumers. Like in the rest of the world, it's kind of the same, you start with mass media or you start with mass communication, to generate main thrusts communication, to have a compelling widened reach of any particular point of contact with people. So that's number one. And most of the things are happening through WeChat Moments, you can get different campaigns, or different above-the-line communications. OK, that's the first one. And then the other part, the second one, it's more about, how you can generate mini-apps or mini-programmes that actually can interact better, with more transactions, or linkage to e-commerce. So in terms of WeChat – or these super apps – the fundamental thing that is very different, and that we are leveraging a lot, is how we can create platforms that help us to approach our consumers, and solve some of the pain points that they have in their interactions with categories, with products, right. So you need to be be there. And the other part - how you can get more relevance for those 'super users', or people that are super loyal to your brand - is to generate platforms with loyalty. And WeChat is a magnificent tool to do that. So there's three layers on that: mass; transactional; and those loyalists, those 'super users' of your brand, how you can have something that is more tangible in terms of rewards. So WeChat, and all these ecosystems, are incredibly useful for us to have a deeper connection with consumers.

OF: What about when you're trying to get market insights with - as you were saying before - this sea of data? You've got a trillion data points now, and you're linking it with payments as well. What can you do on that side of things?

JL: So I think it's separated, the two topics. One is about insight generation. And insight generation based on big data is amazing, because linkage to purchase is something that is a consequence, or that is underlying the big data. And let me explain a little bit, because it was very complicated to me, and it could be complicated. So, to give you an example, how you get insight from other parts of the world, you go to Nielsen, you go to syndicated data that they sell, or you buy the information from them. And then they give you a segmentation of particular consumers, and they say "OK, this is by age group, this is by socio-economic level, blah blah blah'. Here, you can go directly to these big companies - or you can develop your own data by interacting with them, so it's like a virtuous circle - and then you can go and say "OK, I need to understand a particular beverage consumption, let's say soda water", which, by the way, we have right, Schweppes soda water, right. And then you say "OK, I want to understand better why people are drinking solar water so fast". And this is something that happened to me when I arrived. And then I said "Soda water?" Because normally Schweppes is about mixers, right? So it was like "Oh, I didn't know that they like to mix that much. I thought they were drinking like 白酒 [báijiǔ] or something like that". And then I realised that people were drinking soda water for health reasons. So first of all, I talked with these groups to say, like "Let me hear about everything that is said about soda water. And let me understand - based on the data - not only about the way they purchase soda water, but also about the way they talk and all their social conversations that they have on social media around soda water. So that I can shape and understand what the consumption landscape is, for soda water". And it's really interesting that I found that the soda water was being consumed by people that are taking care of their health. So, coming back to that, so you get big data to understand social listening, and to understand why people are talking about a particular product. And then you start, first of all, to segment, and to understand how to eat this elephant in pieces. And then to understand, and create a hypothesis behind that, that you eventually go and validate with more traditional non-data-driven understanding, you go to anthropologists, you go to talk with consumers, to reshape that, and then to generate some some strategies behind it. The other part is like how you can use this information, after you validate your hypothesis, to develop e-commerce activations, and to say "OK, where should I put it? At what time should I put it there? What types of communication do I need to use to have a compelling message?" And you can measure everything here, about what kind of communication is more appealing, what is the best click-to rate to make these people get interested in purchasing more, or to repeat their consumption. So it's really eye-opening for me to understand how you can leverage so much on digital, to craft all your strategies and develop plans.

OF: Because you actually see the the purchasing of your product in real time. Like, as you are activating something in the market, you can then see how many people are purchasing the product?

JL: Definitely. And in real time, you can not only take decisions - on what are the things that are working on not in terms of your communications, the connections that you are having - but also to have a direct dialogue with your consumers, and start getting feedback on innovations, on things that they value the most. So it's really rich, in terms of what you can learn.

OF: Well, thanks so much. And I look forward to seeing what's going to happen next here. It just seems like this is one area, of many, that China is way ahead of the rest of the world.

JL: Definitely.

OF: Well, let's move on to the second part.

[Part 2]

OF: The second part, being the 10 questions. So let's jump into Question 1.

JL: Great.

OF: What is your favourite China-related fact?

JL: Well, several. 'Massiveness' is one of them, and I think it's related to massiveness. I realised that there are 675 million active gamers in China.

OF: Wow.

JL: So I don't know what the population of Europe is, but I think it's less than that. So imagine more than the population of Europe playing games every day of their lives. So for me that's like 'wow'.

OF: Wow. And that's one segment of the market that you particularly target?

JL: I would say that we target… Sprite is a big, big brand, so we focus on a wide part of the population.

OF: Mmm. Do you have a favourite word or phrase in Chinese?

JL: Well, honestly - and I feel very bad because I don't speak very good Chinese - I would say that amongst my phrases, which is very, very few, is 黄陂南路/复兴路 [Huángpi Nánlù/Fùxīng Lù], which is my street.

OF: What's your favourite destination within China?

JL: Shanghai.

OF: Ah right, you're very loyal.

JL: I love this city. I've been amazed from day one. And yes, I think China has fantastic places. But every time I feel more amazed, and I love the city even more. So it would be Shanghai.

OF: If you left China, what would you miss the most, and what would you miss the least?

JL: Oh, it's very easy. WeChat speakers.

OF: Right. Yep.

JL: I have to send you something.

OF: Yes, that's coming up. And what about the least?

JL: Well I would say - and it's not about talking about different manners - but it's about burping. It still strikes me…. I don't feel disgust, but I feel like… It is so… For me, it makes me laugh every time that I hear it. And it's so natural for people, for any kind of people it's super normal to do that in the middle of a meeting, and it's… I will not miss that.

OF: Right. Is there anything that still surprises you about life in China?

JL: It's about what we discussed before, it's about 'differences' versus 'nuances'. But the nuances make big difference.s And. it's about the way that their minds are pre-set. Every time that I try to think about the logic that they're using, to respond to certain stimuli, it strikes me the most.

OF: So each time you learn a new insight, it's a new surprise.

JL: Definitely.

OF: What's your favourite place to go out, to eat, drink, to hang out?

JL: Well, my terrace.

OF: Right.

JL: I have an amazing terrace, well I like my terrace. And we throw amazing parties there. I really enjoy having people come over to the terrace and enjoy the good weather.

OF: What's the best or worst purchase you've made in China?

JL: My scooter, definitely. I love it.

OF: What is your favourite WeChat sticker?

JL: It's about a famous star of soap operas in Mexico. Actually, I was so surprised to receive that here in China, you know, on the other side of the world. And it's this beautiful girl, but it's so eighties, and so old-fashioned, and yet so insightful and so current right now. And so that's my favourite one. You can use it for several types of emotions. So yeah, I love it.

OF: And you know what, it has a great caption, but I'm not gonna ruin it. I'm gonna let people look at it on social media. Very funny, thank you. What's your go to song to sing at karaoke?

JL: Surprisingly, it's a Chinese song,飞得更高 [Fēidé gèng gāo]. I had to learn it, because… I don't know if you know, but at most companies, in the first year that you arrive, you need to perform at the annual dinner. So I needed to perform, and they said "What can you do?" And I said "Well, I think I like singing". So they said "Oh yeah, yeah, let's put you to sing." And I said "Oh my God, I need to…" And then, I was on a business trip in 广州 [Guǎngzhōu], and I was listening to this song. And I said "Oh this song is so beautiful". And they told me what the song was about, it was about overcoming problems. And we were having this super troublesome project at that time. And so I said "Oh, this is so perfect". So the song is about that, '我要飞得更高 [Wǒ yào fēide gèng gāo].' So that's the one that I sing.

OF: Amazing. And finally, what other China-related media, or just general sources of information, do you rely on?

JL: Well, the lame ones, the normal ones that we have on WeChat, like SmartShanghai. But honestly speaking, I get very, very educated, and I get a lot of information, when I talk with my media agencies, and in general with my agencies. They put us in contact with the latest trends, and things that are happening in the social and digital landscape. So every time that I interact… We do this periodically, and I get a lot of information and insights from them. So I would say that.

OF: Great. Well, thanks again, Jorge, it's great to have you here.

JL: Thank you. Thank you for having me, I really enjoyed this.

OF: Me too. Oh, and the last question.

JL: Yeah

OF: Out of all the people you know in China, who should I interview next?

JL: I have this super interesting Chinese girlfriend. Her name is Amelia. And I think you would love to talk to her. She's a super avid traveller, she's a bon-vivant. She's really interesting, I think you should talk to her.

OF: Brilliant. Well, I can't wait to meet Amelia. Thanks so much, Jorge.

JL: Thank you very much again.

[Outro]

OF: Thanks again to Jorge for this. I warned you, it was dense. So let me jump straight in with some information about the graphics that I've posted on our social media accounts. There's one graph showing the number of users in China accessing the internet via mobile devices. The number is actually 98.6% of all internet users, so that's a little different to the numbers that hook I mentioned off the cuff in our interview. I did also find another graphic showing the swift pace of mobile payments adoption in China, projected at around 80% of smartphone users. That's compared to around 30% in the US, and closer to 20% in Germany.

Jorge also mentioned 白酒 [báijiǔ], he said it when speaking about soda water, where he was surprised that Chinese people were buying so many mixers, when he thought that people mainly drank 白酒 [báijiǔ]. So let me explain this, 白酒 [báijiǔ] is an alcoholic drink in China, it translates as 'clear spirit' or literally 'white spirit'. Many people would certainly say it has the same taste as white spirit. It's closest to Korean soju, it's made from certain grains, and it's always served neat. And in the same story, Jorge also mentioned that the marketing team had heard chatter about soda water from health-conscious people on Chinese social media. What I wanted to make clear was that it was those people who were making those claims, and Jorge himself wasn't making any health claims.

What else? Burping. So yes, you definitely see it and you hear it more in China than elsewhere, that's a fact. But that's not to say that everyone in China actually thinks it's fine, outside of the context of enjoying a meal. What I'd say is that most Chinese people overlook it, if someone else burps. I think in China, it's probably ruder to be the one who is chastising others for burping, than being the one who's burping themselves. That's why, as the only foreigner in the meeting, when someone else burps you will be the only one with the 'Seriously? Did no one else hear that?' look on your face.

Jorge's favourite WeChat sticker is also up on social media. The best place to see WeChat stickers is, of course, on WeChat. So please find me there on ID: mosaicofchina* and I'll add you to the group. The Mexican telenovela character in this sticker is called Soraja Montenegro, she is apparently enjoying a resurgence on social media, because of the overly dramatic performance of the actress who plays her. The song 飞得更高 [Fēidé gèng gāo] is by 汪峰 [Wāng Fēng], it simply means 'Fly Higher'. And finally, I like it that Jorge's favourite place to hang out was his terrace, that couples nice with one of Astrid from last week's answers to the same question, which was 'anywhere with a terrace'. And also, Jorge's best purchase in China was his scooter, which is the same answer that Philippe from Shanghai Disneyland gave in his answer in Episode One of this series.

Mosaic of China is me Oscar Fuchs, editing by Milo de Prieto, artwork by Denny Newell, and China technical support from Alston Gong. Thank you very much for the ratings and the comments on iTunes, or wherever you download this podcast. It really does help to spread the word. Thank you for listening all the way to the end, and see you next week.

*A different WeChat ID was mentioned in the original recording. That ID is now obsolete, and the updated one has been substituted.

Oscar Fuchs was the Co-Founder and Managing Director of a global executive search firm dedicated to the Human Resources profession. He was born in the UK and has lived in Asia for 18 years, including 3 years in Hong Kong SAR, and 7 years in mainland China. In 2019 he sold his company, and launched Mosaic of China.

In China, the podcast can also be found at 苹果播客, 小宇宙 and 喜马拉雅.

Internationally, it can also be found at Apple, Spotify, and all other podcasting platforms.