[双语字幕]Tencent SY Lau‘s Speech: Digital Marketing in China

It's an honor for me to be here with you. Coming back to you, first is speaking to leaders of the future generations in the making has always been one of the most key passions for me personally. Perhaps today, before I move on to the propelled deliberation or sharing of thoughts, it is just appropriate for me to begin by taking a solemn moment in expressing a note of condolence to the departure of President George Herbert Walker Bush. Let the record show that today is the state funeral of a great statesman who has actually left behind a legacy full of grace. This is important because President Bush is well-liked in China, and he has received very strong positive reactions. When the unfortunate news of his demise took place a couple of days ago, two days ago I was actually in Paris watching CNN, where James Baker, the previous Secretary of State, was interviewed. What really caught my attention was when Mr. Baker was recording about what really made President Bush a successful president, and the word that he used was simply because he was a very nice person. Now, those of us who come to business school, some of the informal education that we have gotten along the way is that nice men never finish first; they normally finish last. So when you have a great president that left behind such a strong legacy where his best friend thought that he would love to be remembered as a nice person, I thought that would be a very nice way for us to begin our dialogue today. Now, I haven't had the privilege to meet with 41 in person, but personally I had the opportunity to be with 43, who incidentally shared the very same birthday with my son. 43 was actually a very nice, sincere person in that sense. Now both 41 and 43 have played a very interesting role in establishing solid bilateral relationships with China during their respective tenures as the leaders of the free world. If 41 would visit China today, I'm sure he would be totally shocked with what he sees, how China has transformed herself for the past two decades, given that he was the dispatcher involved with China back in the seventies. Now let's get back to why we are gathering today while the state funeral is happening a couple of miles away from where we are. I guess the reasons why Professor Bob Thomas has invited me today, if I may, probably there are two key words that come to my mind: the very first one being China, and the second being technology. Now, despite the fact that there is an ongoing trade war happening today, let me assure you that the world will continue to become more globalized, better integrated, and with the currencies of globalization moving freely, not just in terms of mobilities of human resources, not just in terms of exports and imports of goods and services, but more importantly in the realms of data. Now that's a mega assumption. It's easy to come with making assumptions, and the younger generations like your good self, you are the one that's going to prove me right or wrong as you move forward. With that assumption, let me then move on to an even larger, brave, bold statement. As I understand from Professor Thomas today, we have 5% of our participants today that are present with a direct connection to China. So here's a statement: there is nowhere else on earth today where digital marketing is as diverse, as dynamic, and as daunting as it is in China. Now my sharing today would be structured in such a way that I hope by the end of an hour today, you walk away having a better appreciation of how that ecosystem in China has come into the current state. You would be future leaders of Procter & Gamble, Facebook, ExxonMobil, as you grow larger in your corporate roles, you cannot skip China from your business plan, so it's important that you understand it. We would begin today by giving a bit of perspective of what this digital China is all about, given that 1/7 of the global population is now living in a very digital lifestyle. I know that we have many students from the United States and also from other parts of the world, but there is really nowhere else on mother earth that people live in such a digital lifestyle compared to China. This fact would then serve as the backdrop for us to explore further the nuts and bolts of what digital marketing is being performed, how it has been accomplished, and what sort of trends are taking place in China. Many years back, when people talked about digital marketing, it was as if that is a subset of marketing. But today, when people talk about marketing without digital elements in it, that is not marketing. Finally, I thought our discussion today would not be complete if my team and I haven't tried to make an attempt to talk about the issues facing the futures of marketing as a profession. Globally speaking, trade marketing is in quite a hot position; it's being attacked everywhere. Some have even gone as far as predicting the demise of the profession. Well, I have different thoughts. I know that there are things that ought to be fixed when things are broken. It's almost as if today, the word 'everything' seems to be unbroken in that sense. When things are broken, it takes a lot of effort and more importantly, zero confidence to ensure that this thing that has existed for four centuries is given the right opportunities and hope to go back to the path of the right destiny of what it ought to be. Marketing does create values. I have looked through your syllabus from chapter one, two, three, four, five, six, I think, to chapter twenty. The reason why I'm here is because this capstone is supposed to tell you that what you have studied is still relevant, and we probably give you a case study of how it's really being played out in China. So that's the opening. I see some of you hopefully not falling asleep because I can't see you. Well, for the fun of it, let's play some video.

Over the last few years, while traveling the world from country to country, business leaders, entrepreneurs, political leaders, and academics often ask the same basic question to me: what is the actual effect on earth of this digitalization that you are always talking about? The fact of the matter is simply that the real value of digital transformation lies in the potential that is still hidden. From a social economic perspective, its destructive power penetrates society so profoundly that we are now only witnessing the initial rays signaling a new dawn of enlightenment driven by digitalization and intellectualization. We are now seeing the birth of the digital civilization. Digital civilization is the logical next iteration of humanity's previous civilizations and foundations: the stone civilization, the agricultural civilization, and the industrial civilization. It doesn't only exponentially increase productivity; it unleashes individual potential and brings about efficiency, transparency, and sustainability to life. It also opens a new chapter in the development of human society where the impact of the Fourth Industrial Revolution would ultimately redefine how the next wave of our civilization would be co-authored between mankind and machines. As this new civilization spontaneously emerges globally, China has become a best-in-class case study on how digitalization has made a positive impact on practically all of society's social economic layers. China's digital economy has been a key driver of China's economy for the past 20 years. Currently, the digital economy contributes a staggering 32.9% of China's GDP and is growing at the highest rate in the world. Importantly, digital's impact is not industry-specific and not solely acknowledged; it touches all aspects of society and enriches our daily lives. The explosive, deep, and broad power of digitalization has led to the transformation of the entire country into what we now call Digital China. Tencent is very privileged to have been involved in the entire process, which in turn has helped accelerate the rapid growth of Tencent. Today, Tencent is shaping and redefining the digital lives of the Chinese people with products in diverse areas ranging from entertainment and social media to the daily use of mobile payments, transportation, dining, healthcare, and even educational applications. Tencent, as always, is the connector. Tencent has become an integral part of people's digital lifestyle. WeChat alone now has a monthly active user base of more than a billion people. Hence, today Tencent has become the cheapest bread, and we are profoundly aware that it is those brilliant users who have lifted us to such great heights. Call it multitasking, virtual reality. How do you like that? So I'm glad you asked. You heard from my twin brothers sharing a little bit of the background of China, and that's it. There's everything about China we can all go home now. This is indeed a key topic every single time when I meet up with heads of government, policymakers, and the fraternity from the academy. People always talk about China. In the past, when China was becoming part of the members of WTO, people talked about economics, and prior to that, people talked about politics. But today, the key word in China is literally about digitalization. If I may, if we were to deep dive further, there are probably two very important things that we could actually remember about how China became so digitalized throughout their quest of digital evolution. The very keywords, the milestones if you like, is called mobility. Mobile now has actually fostered the world's largest mobile digital ecosystem, and an entire generation of users are being born. I'm going to give you a secret. Before I came to this room, I was having a nice good coffee with Professor Bob Thomas. Professor Bob was complaining that you guys in the classroom keep watching over your weekend. This is bad, bad boy. Hey, when we created it, we didn't expect this to happen, so don't blame it on us. So please, when you do that, at least you say you're not weak; you could say you're honest. Ecosystem, infrastructure, and such things will not really become a culture or take a way of life if the adoption of such new technology is not being perceived or received by many. Today, the numbers would indeed show that China is the largest global mobile market. A couple of months back, China had 788 million Internet users, out of which more than 98.5% actually access the Internet via mobile devices. That's the reason why companies such as Apple, Samsung, even the arocs and Sony, etc., are looking at China as one of the most important bread-and-butter markets in the world. With the infrastructure being built, with utility, with time spent, and the way people develop their lifestyles day to day being so well anchored on mobility, you see this is not like a causal effect kind of thing. We observe that the emergence of many new industrial constructs, if you like, to be honest, nowhere else. For example, all of us are very familiar with the concept of e-commerce. If you look at the syllabus of MBA students today, e-commerce naturally is becoming a big thing compared to a decade ago. E-commerce was just one of the new innovative or incubator ideas that perhaps marketers ought to try as a new channel to reach consumers. But today, e-commerce seems to be the center of everything that we are doing. Nowhere is mobile e-commerce so prosperous, so prevalent, and so influential compared to what we are seeing in China today. With mobility taking place, the emergence of new subsets, new definitions of industry grew out of the existing industry. For example, digital video streaming has actually taken a new life from what entertainment used to be. When we launched Tencent Video back in China just less than 10 years ago, like seven or eight years ago, we started from zero, and today we have 80 million people who are regularly, habitually, and legally built as a loyal subscription user to Tencent Video. That kind of entertainment value that we have created for our users has largely to do with what we call mobility. And things like bike-sharing economies. Every single time when I come to Washington DC, the Four Seasons Hotel has always been my favorite. I remember the first time when I came around, before I went over to right here, I was just walking across the street and you see the availability of some bicycles that are supposed to be shared socially, but it's actually very difficult to try to find your credit card and in the winter to punch it in here and there, and then seriously you have to pay like how much for a bucks for a deficit as a truck. Come to China, it's just we check it, and without you realizing it, you're zooming in Tencent Square. Honestly, I ride to my office when I'm in Beijing. I would just get up from my hotel or apartment, go to the closest bicycle, scan the QR code, pay with my WeChat, and it takes me like 45 minutes to ride to my office. That's not the end of it. Some of us here might be more tech savvy than others. You realize that 5G, China would be embracing 5G as soon as possible compared to many parts of the world. This thing about the 5G era will enable us to expand the horizons of our imaginations. Tell me your imaginations, tell me what you fancy, we'll get it for you just like that. For example, some of us might like to download some videos, what I call high-density videos. It will probably take you like five minutes to download if you stay in a very Flintstones era; it probably takes you three hours to download. But in the era of 5G, all you need to do is just follow me, blink your eyes four or five times, and your video is delivered. So those are 5G, and that's actually happening. China is already a mobile nation and will undoubtedly become even more mobile thanks to the impacts of 5G. You can actually probably read faster than I do. Think about that. There's a keyword called VR and AR, micro VR and AR, and also the haptic experiences. Haptic experiences, touching the way that you need to feel, is really like a more IMAX than you can imagine, and this thing is brought to you right in the box of Oculus and HTC Vive. So that's mobility when you look at China moving forward. The second key milestone when we talk about digitalization in China has got to do with what we call Internet Plus. What you see next is a chart that shows the progress of the path to Internet Plus. The evolution of the Internet in China is probably about 20 years, maybe 30 years. In 2015, the Chinese government launched the Internet Plus strategy, which aims to drive further the integration of the Internet with various industries and therefore upgrade the powerful potential into what is essentially a fundamental infrastructure. Since 2015, the influence has begun to expand from pure economic purposes into specific industries that actually touch many aspects of society. Think about the Internet as the basic infrastructure like water and electricity. Think about those days. I'm not sure whether you are the Star Trek generation. Anyone who has not watched Star Trek before, please read the room. So think about those days, was it Star Trek or was it something else? Captain Kirk, right? You realize that Bob Thomas is becoming very much like Captain Kirk. Think about those days, the Six Million Dollar Man, as I'm revealing my age, and Bionic Woman. What about these things that were actually warping somebody from physical location A to physical location B? Well, you could actually literally do it because I just anyway, I was about to go through Stephen Hopkins of my speech, but all this is possible with quantum physics, with big data zeroing in to be the utilities of artificial intelligence. A lot of things are actually possible now. With that kind of flow of policies coming in, following the similar timeline, tech companies such as Alibaba, Tencent, Baidu, Huawei, and you name it, they then literally have the chance to flourish. You must understand that a country as large as China doesn't become the largest digital economy in the world just out of nowhere. It has to come from a very strong commitment of public policy. 2015, digital economy. 2015, the Internet Plus. What does it mean? It basically means that within 20-something provinces, they are digitalized. There was a directive, there was a concerted agreement on how we wanted to digitalize the society. In the US, people used to sing this song: 'We built this city, we built this city with what?' You are so backwards. In China, we built this city with ones and zeros. So that's how differently things have become. Following similar time frames, such companies all of a sudden are receiving a lot of media attention from CNN, CNBC, etc. The reason they receive a lot of attention is largely because they have created a lot of utility, and that utility is not just confined to one type of product category but is becoming a huge platform strategy, providing all sorts of things. Tencent, for example, during the first video, my virtual reality self, we started way back in 1998. We are 20 years old today. We have been very blessed that we had the opportunity to shape and redefine the digital lives of our Chinese people in China. That's the result of the deepening of China's Internet Plus strategy, and the immediate gratification of that outcome is simply this thing about what you call consumerism being upgraded from a pure consumer Internet into what we call an industrial Internet in China today. This is the main reason why China today is seen as an emerging example of the digital economy in the world, as Professor Thomas has mentioned just now. A year ago today in Washington DC, I was given the opportunity to share with the central bankers at IMF, not far from here downtown DC. There were two gentlemen invited into this big forum where the IMF is actually the clubhouse of all the 180 central bankers around the world. These guys' main role is to try to figure out how GDP is computed and then try to figure out standards of finance, economics policies, etc. In that forum, the IMF was keen to study how China arrived at a digital economy status. So I was invited as one of the two key speakers, and my role was to explain to the audience how we came about with the digital economy. The second speaker was a gentleman from the UK where he spoke about cryptocurrencies, blockchain, etc. If you look at this chart, it says the digital economy in China is an upgrade due to industrial Internet. A lot of people would probably naturally understand. Maybe a bit of background: when we look at digital components of the GDP, it is further divided into two very distinct but interrelated components. The first is what we call the ICT portion, ICT meaning information, communications, and technology. The second is the newly created component, what we call the integrated component. What is amazing from this chart is that more than 77% of the total digital economy has been contributed by the integrated category rather than the conventional ICT portion that all of us are familiar with. If I were to find a single word that could actually describe the actions of this chart, I would say empowerment. The value, the utility created by the first sector empowers the second sector, and the second sector has therefore grown to be larger, stronger, and with a brighter future that they drive the bigger views of economy utility. This to me is a perfect example of Adam Smith's invisible hand of the marketplace taking place. We now find ourselves at a dawning age of what I truly love to call digital civilization, which would be defined and further empowered by this industrial Internet process. How did all these things happen? Largely because in China we have established a very solid framework comprising cloud computing, payments, artificial intelligence, and digital security. Digital technology that in turn will turn industry into something akin to a mega-wrapped infrastructure. Industry can then engage more in the driven things of basic infrastructure and consequently promote the country's further transformation into Digital China. The background of digitalization, the relevance to marketing, we have been tracking for some time now, in fact about 10 years. The emergence of digital civilization has actually led to changes in user behavior, the industrial environment, and society as a whole. As a passionate veteran of marketing, I have been both a pioneer with my teams—we have a lot of people that believe in the pathways of marketing in China and Tencent—and we have also been a blessed witness to the digital transformation in marketing changes in China. Over the past ten years, Internet companies such as Tencent had to write our own playbook. I remember when I was in Orlando exactly a month ago, I was participating as a board member of the Global CMO Growth Council. We had 2,500 CMOs from the United States sitting in Orlando looking for playbooks: playbooks of digitalization, playbooks of artificially intelligent-based marketing, playbooks of this and playbooks of that. Well, in China, we don't have a lot of playbooks because when you're literally sitting in that airplane that you have to fly and map the tree and at the same time consider changing the engine at the same time, we can fly and change the engine and write the playbook with your toes if you like, when you fly at that kind of speed. So I guess that's how original knowledge is being created and curated at the same time, because what you created, when you think you're ready to gather it, you could actually perhaps sometimes just throw your original hypothesis out of the window. That plane doesn't have a window, so what I meant was for the past 10 years, to be exact, we launched the Tencent MIND guiding principles in China in the space of marketing. Tencent MIND, ten years ago, think about China's well, well, West. So everybody knew that we must have digital components in our marketing, we must have a digital thing. A lot of times, today people talk about marketing technology and MarTech. By the end of this year, it's going to turn into a 1 billion US dollar industry because marketers in the US and around the world are spending so much of their marketing budget into technological-related tools and tech. Ten years ago, no, we didn't have MarTech. So people in the world, especially in China, were not allocating their marketing budgets into digital. So what did you do? Tencent, with professors from the US—I remember at that time I haven't met Professor Bob Thomas—we invited Philip Kotler, we invited a few other key prominent advocates of digital marketing in the marketplace. We sat together and tried to figure out how to help marketers allocate scientifically the strategic components of their marketing strategies to digital. We discussed, we brainstormed, and then we came up with this guiding principle: Tencent MIND. M stands for mobility, I stands for interaction, N stands for navigation, and D stands for differentiation. It's very simple: for your marketing initiatives that involve digital components, it is not measurable if it doesn't have an interactivity component in it, if it doesn't navigate specifically to the types of audience they're looking for, and if it doesn't build differentiation for your brand, then don't bother. So those were the guiding principles, but that was 10 years ago. 10 years ago, Yahoo was Yahoo in themselves. 10 years ago, iPhone was born, I guess. 10 years ago, people were still using that Motorola phone that goes like that. So we started that, and this photo that you are seeing, every single year we invite key opinion leaders from around the world to come in and share with us what potentially might be the next key buzzwords of marketing. It came to a point where the biggest gratification would be when you have a client such as L'Oréal, such as Unilever, such as Procter & Gamble, that they openly say, 'Every single year, come November, rain or shine, you must come to the Tencent MIND Forum because that's where you can, after attending that one forum, you kind of know what your marketing strategy ought to be in the following year.' So that was the largest chorus given to my team. Now let's move on to the main agenda today. After more than a decade of development, it's very obvious that a unique China type of marketing ecosystem has been formed back in China, one that is totally quite different from those in Western countries. Today, we have taken the liberty to try to formulate five key characteristics for discussion today. You have to remember this: you are sitting in Georgetown University, you are in Washington DC, this is the United States. But when you look at marketing, you have to have a very global mindset. A lot of times we see that policymakers lack the objectivity in understanding and in distilling global issues, which is why a lot of funny things are happening in the media. The good thing is that today we are morning, so you probably don't see a lot of tweeting right now. Why is this important? Because if you aspire to be a global marketer, you must have that sense of objectivity. That objectivity is to have the transience of nationality, have the transience of belief, value system, etc. You serve the hidden, the latent needs of that particular audience in a specific country. So this is what we have seen in China, and we love to share with you. First of all, the first characteristic of the China marketing ecosystem is what we call tech-driven value innovation. Notice the word marketing technology. There are many books that have been written about it, but a lot of books are not written well enough because sometimes authors don't have the luxury of being in the industry to attain a front-end experience. But understand that the ultimate value of marketing really has to do with championing the development of latent needs of consumers or society at large. In the digitalized landscape of China, innovation is increasingly driven by cloud-based technology. The core user value created by the Internet, the Internet Plus, and the industrial Internet comes from the innovations that it drives in current industrial and commercial models. What do we mean by that? Internet Plus is not just simply about infrastructure and technology upgrades, but it integrates with digitally driven markets and consumer operations. What is the largest currency of today? It has nothing to do with you know that data is the most important currency of today. Now marketing, if marketing were to rely on the old schools of actually doing research and development, you're not using the cloud-based computing to the fullest advantage. But in order to truly unleash the potential of a digital era, value innovation and increasing numbers of Chinese companies have undertaken infrastructure upgrades. What we see in this chart is that for the past two years, Chinese companies have wholeheartedly embraced the cloud, and obviously Internet companies account for the larger growth in cloud usage. However, what surprises me is that traditional industry and even government agencies have also accelerated the steps to follow suit. The faster growth of computing consumption in 2017 is actually the public sector and traditional industries. If you were to visit a city called Kunming in the northwest of China, when you go to Kunming, it's a beautiful city, a spring city in China. When nature calls, you take up your phone, and it literally guides you to which location your nearest toilet is and which room in that toilet is available. So this is called precision marketing. Have you ever often? Well, let's see. We have many ladies in the audience today. Think about the user experience of nature calls between men and women. Should we have five toilets for men, 500 bowls for men, and five toilet bowls for ladies in a room? Why can technology help programmatically solve the problems? The five bowls for men, find a lower woman, it could be all together, depending on who's in the queue, and then the sector should open. See, I just gave you a good startup idea. Work on it. Now the second defining characteristic of digital marketing in China is what we call an always-on consumption culture. In the not-too-distant past, e-commerce was only described as an online behavior or a new sales channel if you like. But today, more than just a consumer behavior, e-commerce in China has indeed become a lifestyle choice that is deeply rooted in people's daily social activities and Internet habits. I know that we have just gone through Black Friday. I do understand why such a happy thing is called Black Friday, but so be it. Black Friday, Macy's, and all that. A lot of times people think that these are some of the so-called seasonal promotional techniques taught by manufacturers or retailers to make sure that the objects are being taken out from their retail stores. But in China, shopping is not just about parting with your money. Shopping is a social activity, and there's a beauty of the end zone happening in China now. For the Chinese market, especially for young consumers like most of you—only Bob and myself could just stay away and say most of you—that always-on consumption culture has taken shape in the last decade. Of course, when you talk about needing something to be always on, you must require something that's always available, otherwise it cannot be always on. Enabling this culture is where WeChat came in. WeChat's many programs actually help to bridge the last mile gap in e-commerce. Before we talk about mini programs, perhaps a quick introduction of WeChat. How many of us here don't use WeChat? There is right there. Thank you very much. WeChat today, or Weixin as we call it in Chinese, is a messaging and social platform. The beauty of it is that what started off as a potential product, a single app that hopes to connect deeper for basic communication purposes, when communication is enlarged, it has a social element in it. When these things are enlarged further, it becomes a platform, and then you start throwing in ideas such as entertainment, utility, public services, etc., and then it becomes the largest platform even today for original content. For folks in Georgetown, you know that that's actually very important in terms of marketing. WeChat, as of the second quarter of 2018, more than 20 million official WeChat accounts have been created by individuals and organizations, which makes WeChat the most popular amongst the Chinese for professionally developed content or user-generated content if you like. Specifically, this thing called mini programs is an infrastructure embedded within WeChat. Mini programs allow individuals or organizations to establish an app within an app, allowing faster and easier access to services or communities. We know that today marketing is not just about product development, marketing is not just about brand building, but marketing more importantly is about making sure that you keep a long-lasting trusting relationship with your current and potential users. So mini programs play a huge role technically speaking in that sense. But it doesn't sound very unique and special, isn't it? The advantage of mini programs for marketing is the ability to really integrate brands into the user's life. I think for those of us who are fanatics about marketing, you know marketing sometimes they differentiate marketing and sales, sales and marketing, probably because when you talk about the connotation, sales always has the idea of trying to push something to people, but marketing is about meeting your needs. That's what I love about the definition of marketing: we care about your welfare, we only provide products and services that meet your needs, and we shall not push some ideas that are totally irrelevant to your current life cycles of your lifetime. Let me give you a few examples of WeChat's mini programs. For example, mini programs construct a closed loop between the mushrooming growth of social networks and sales conversion in China. This group-owned e-commerce mini program called Pinduoduo actually achieved tremendous growth. How tremendous? About 300 million daily active users. The entire United States became a huge fan of Pinduoduo, and that IPO was worth about 30 billion US dollars in just three years. Think about the power of social mobility and social marketing. As people share these mini programs in their WeChat groups on a daily basis, what about mini programs that have directly contributed to the transformation between content and business values? Millions of China's Internet big V's, these are the social opinion influencers, social intervention micro-bloggers, they started to build their very own brand effect in mini programs and among their so-called WeChat fans, and have achieved huge success. As a time constraint, I would encourage that you need to search out for searching because this thing might not be happening in the US or any parts outside China, but it's something that is worth learning about. Unlike a lot of well-known brands, it is actually little guys. Procter & Gamble and Unilever, their marketing challenges are very different because they have 190 years behind them, Procter & Gamble has close to 100 years behind them. But what if you are new and up-and-coming? How do you ensure that you'll find the most efficient and effective way to reach out to your potential audience? WeChat as a platform has actually opened up that possibility where retail is becoming very flat in that sense. As a result, more than 100 million brands have joined the mini programs bandwagon within just one year, obviously including some big brands. In short, mini programs are the testing ground for business innovation. They connect users and brands, marketing services and content with consumption, to create unlimited possibilities that are becoming a self-fulfilling prophecy. If you're good, you're good; if you're no good, you'll be poor within the ecosystem of mini programs. Now the third trend in Chinese digital marketing is what we call the blurring of the lines of demarcation between the online and offline worlds, and this has to do with what we call smart retail. This brand-new retail model is a driving force behind a group of Chinese retail industry in defiance of an overall retail slowdown that's happening globally today. Please know that when I talk about retail, I'm not simply just talking about combinations of the factors that drove the integration of online and offline traffic together. It is a very comprehensive retail management system which integrates online and offline services, which is driven by data. I hope and I believe that Georgetown does make available data analysis as one of the key core curriculums. If you wanted to be a good businessman or marketer, if you're not familiar with data analytics, you would really be lost in the water you're about to step in. Tencent's social platform, we have things like payment platforms, media platforms, and also innovating products that are cloud-based with artificial intelligence capability. Driven by many traditional big-box stores have actually made the transition, such as the big names like the French retail giant Carrefour, local retail giant called Yonghui Superstores, or even the Swiss company called IKEA. These are pioneers in China that have actually embarked on a new era of smart retail. They are big, but they are willing to be nimble and try new incubator ideas of Industrial Revolution 4.0. As this whole thing is taking shape, one of the qualities of a good marketer in the future is you almost really have to be such a good... Why I started my presentation today by paying a tribute to President George Bush being a nice guy? Marketers have to be nice guys. Marketers have to be nice guys because you almost need the help from everyone in the industry, especially your competitors, to make the pie larger, to work together for innovation, to create and discover more latent needs of the users. Sometimes this is about waiting a competition. A time studying how short or we record our children to be very competitive. When you go to a soccer game, when you go to what you call football, when you go to this and that, you always play to win. But I guess one of the great politicians in the past was talking about you do not win by losing. In the world that you're about to step in, it's more important to play to win together. So being nice would be one way to do that. The guys like Carrefour, for that matter, they are dominating the entire retail stores, but then they have to realize that they needed to work with platform companies like Tencent, like Alibaba. They have to work with millions of their users to literally humbly listen to their needs in real time in order for them not to be disrupted, even if they can be that big. One of the great words of wisdom from my founder, Pony Ma, was: giants, great giants do die. The difference is when they fall, you can still feel the temperature of the body. It is like just one shot, they fall. I hate to name names, but look at some of the great names that we are familiar with. Great companies can just fall just like that, right? If you're not being nice, you're not working closely with your competitors. The example from Carrefour is worth examining because through our partnership, Carrefour achieved tremendous results in just under a month. Carrefour signed up 2.5 million new members to their loyalty program with a member conversion rate of 90%. Tell me which marketing program would actually bring you 2.5 million in just under 30 days with a hit rate of 90%? What about the OK? I think we have skipped that chart. There are other things that are actually happening with similar stories with Hema as well. In the interest of time, let me move on to the fourth trend in China, which is what we call societal and sustainable marketing. Increasingly, companies in China and around the world for that matter have realized that marketing and growth are more and more about creating social values. Enterprises need to consider their products and services as well as their strategies from two very different and complementary perspectives. First, are they creating values for customers from a micro perspective? Or second, if they can do the same for society on a macro perspective? In short, there is a strong awareness for enterprises in China to focus more on the greater good, on how they can utilize their capabilities to assist society in moving towards a better future. I think that's why we see many multinational companies such as Procter & Gamble, Unilever, L'Oréal persistently pressing ahead with environmental protections, preservations, equal rights, and among others, a lot of sustainability strategies. I think this was covered in one of your chapters over the past months as well. No difference, Chinese companies in China are doing the same. We might be less sophisticated in crafting the message, but I think the intention was the same. What we have been thinking about is how do we go beyond traditional means of fulfilling our responsibilities and instead make use of our most essential strength and focus to make social responsibility an integral part of our corporate development. If I make a case study from Tencent, you realize that the fact that we connect to 1 billion users, 1 billion consumers, and largely our users are young people. People think about young people being the future, and technology companies are always very forward-looking, forward-thinking. But you must not forget your roots, and when you talk about roots, you always refer to heritage. So we then attempt to utilize Tencent's technological power not just to build better connections between people, but more importantly, what about between tradition and modernity, between digital and culture, in order to further stimulate cultural appreciation and creativity in society. This is a case study of what we have done, started like two years back when we began cooperation with cultural preservation organizations such as the Forbidden City, the Dunhuang Academy, which is charged with preservation of the Silk Road, the China Great Wall Society, and the very first Emperor's Mausoleum Site Museum. Together, we explored how to use technology to connect culture, and the result has been a digital culture preservation solution that even captured the attention of worldwide museums. The Great Britain Museum wants to speak to us, the Louvre wants to speak to us, to see whether we could actually use similar technology to help them create awareness among the younger segments of society. Now let's watch this video.

Two millennia ago, a pearl glistening with art and culture emerged along the Silk Road: the Dunhuang Mogao Grottoes. The passage of time is cruel, but beginning in the 1940s, there was a group of people who were devoted to preserving the beauty of Dunhuang through copying paintings. These guardians have been unceasing in their restoration efforts. The struggles of these restorers never ended. In 2017, Tencent and the Dunhuang Academy of China jointly launched the Digital Silk Road program in order to explore further how to better preserve these priceless cultural relics by using digital technology, animations, games, music, VR, AR, and AI. Modern technologies will shield the ancient culture. Dunhuang culture will flourish again in our hearts and minds. Today, we have 1 billion people as digital guardians. We all hold a spark of cultural and artistic preservation which can set the world ablaze. This is a never-ending battle, and it's an all-out effort for us. Will you be joining us? Marketing is not just about making money, but very importantly, if you don't care about the culture, the roots, etc., especially the generations of consumers, if you have a chance to influence, convince, and touch them emotionally to share the same belief and value system with you, that would make marketing very meaningful in a society, making technology for greater good in that sense. Finally, we have arrived at the last trend or the last characteristic of what I look at digital marketing in China: what would I call the rise of new generations of marketers who represent the futures of marketing. Potentially, these are young and aspiring individuals, some are returnees from the West, very difficult getting work in Greece in the US, and of course mostly are actually locally bred in that sense. These young leaders realized that meeting the challenges of marketing today with the tools of traditional marketers of the past would be incredibly difficult. On one hand, they have found that the space of marketing in the narrower sense which we currently perceive it is really capable of strangling. On the other, by contrast, what defines good marketing keeps expanding. I think that's where hope is all about. Marketing is about service, marketing is about operations, marketing is about products, and the delivery, after-sales service, lifetime warranty, and the list goes on and on. Only when marketing is evolved and involved in every one of those steps that I mentioned will brands and enterprises stand the test of time. The test of time, if I notice you don't even know about tests of time, you talk about tests of Twitter. If you follow some of the latest developments, one of the Italian syrup brands in China literally had a big challenge that they literally had to pull out from China because of one or two simple tweets from people within a company. So here on this new so-called breed of future marketers, what are they thinking about? First of all, I think there is a strong realization within these new generations that we have to move beyond the marketing view to see things from the business view. What we mean by that: the world can keep talking about big data, artificial intelligence, etc., but if we were to just look at such technological improvement purely from an insight point of view, then we are just actually looking at the same problems. The old good saying about replacing the bottles but not the wine. You can have the biggest toys in the world, but if you keep looking at the same thing, you will solve the problem. The technologies have become such a powerful part of infrastructure that they will bring fundamental changes to the way that we do business and create values. Marketers have actually moved, encouraged themselves to move beyond marketing. They wanted to be pioneers and navigators who identify and answer the most significant business questions and thereby help their organizations to take the very first steps towards a more profound, necessary, in fact if not imperative, transformation of organization. Marketing should not just work within marketing departments; marketing has to step outside it within the organizations per se. Secondly, we also observe a certain behavior whereby the new generations of marketers are also actively finding ways to prove the economic values of marketing initiatives. This is a no-brainer because this thing doesn't just pertain to China. In fact, globally, people are saying that the top officer, the CMO, averagely keeps their job for up to 18 months, and it only gets shorter. The reason for this is because there is a failure in terms of empirical correlation between growth and marketing activities. So I think that's what people are trying to figure out. Therefore, it's quite pleasing to see that back in China, young marketers are able to present financial numbers. Marketers have the consciousness that they needed to communicate and collaborate with others in the organization laterally by speaking the language of economic value creation and consciously identifying and uncovering the formulas of profit and loss. Of course, they even taught languages about shareholder value creation. Applicable cases and practices perhaps that would be one way for marketers to gain more prominence and influence at the board level. Finally, this is important. I think I'm also seeing a huge industry awareness from China whereby people are forcing ourselves to champion the faithful trustee of the brand legacy. Societies around the world are living in a post-truth era. I really hate this word 'post-truth'. I was sharing with my son years back, I felt that what is truth? Without being very poetic about it, you believe the tree fell in the forest and no one sees it. It depends on who treated it well. The greatest danger that we face today is the revolution of moral values into something relativistic. The most influential role of marketing as we understand it revolves around building lasting, strong relationships with customers. In any relationship, building trust is the fundamental. In a highly digitalized consumer ecosystem, building trust is really challenging. I was like, you know, you guys do your WeChat. Well, Professor Bob Thomas is talking, so I was looking in my books when I was talking up there, and I saw this magazine that says leadership is about building bonds of trust. We are living in a world where trust is becoming a highly deficit asset, and you cannot do marketing if you don't aspire to be the trustee of the brand that you are looking after. Trustee of the brand, not just a brand builder of the brand. Brands therefore moving forward today in China, we try to take the road less traveled. We are not choosing the easy path, and we embrace the highest standards of moral obligations by acting as the faithful trustees of consumer welfare. Don't simply see yourself merely as a great communicator, a great content provider, or custodians of the brand, but you really have to strive for that legacy of a brand custodian, brand trusted. Not every company can do that. If you in the future work in a company that doesn't even come close to believing in becoming the brand legacy custodian of the brand, leave and find a job for a company that believes in that. Because if you don't, very soon the mystics of that management is going to be crafted in your thumb. Great, you can pay for it. In closing, I suppose after this you'll be going back happily preparing for exams. Do we still have exams? No, my goodness. Well, let's listen very quick moments to review the five characteristics of the digital marketing landscape in China today. We spoke about technology-driven value innovation. We articulated about what an always-on consumption culture was being empowered by always-available platforms such as social platform WeChat. Then we also introduced the concepts of the integrated world of smart retail. Remember, the voice box might be smart, but when we talk about smart retail, we are not simply just talking about the integration between online and offline. You really have to visit China to buy something from Carrefour, to buy something from roadside. The ease of it is not just about transaction via mobile phone, but the ease of it is that data from the transaction plays the spiritual role in making sure that the current needs and potential future needs of the consumers can be fulfilled. I also spoke about societal and sustainable marketing initiatives that I'm glad to see happening back in China. Finally, if I may, I felt that there was an emergence of a new type of future-oriented marketer, one who realized that it should be very short-term, one who realized that if marketing were to remain as a strategic component within organizations to create values, we must be the voice of the consumer. You can only be the voice of the consumer if you are the brand legacy, you are the trustee of the consumers within a board of directors. Well, there you are. What about finishing the thoughts with what's happening around the world? A very quick one. As Professor Bob Thomas has mentioned, I was recently invited as one of the 25 board members in the CMO Growth Council. The idea was announced in April this year. We met in Cannes once, and within six or seven months, we provided a common platform for marketing leaders around the world to discuss, elaborate, debate, and take necessary actions in support of the industry. The underlying message was that marketing professionals must take marketing back. We must make sure that marketing remains as relevant and strategically significant in the role of organizations in a society. As you are about to move into the real world, you realize that these things are actually eroding. Look at the books of marketing being written, and I would really encourage you to participate in curating new knowledge as your user experience gathers along the way. After six months of our deliberations, 25 of us managed to cultivate a lot of participation from other CMOs in the world. We had our very first Global CMO Growth Summit in October in Orlando, where five pressing areas were put forward to be deliberated again by 2,500 delegates from the US. Such areas include societal and sustainable marketing, customer centricity, brand experience innovation, data and technology, and talent development in organizations. This chart is very valuable. This is the so-called the bridge of all the hundreds of years of experiences from marketers around the world, to kind of say that perhaps this is the playbook if marketing as a profession were to rejuvenate ourselves. These are the five key pillars. As future leaders such as yourself, we have to work together to make it better. Let me end the session with one video.

Well, a long journey today. Thank you very much for your attention. I hope that I didn't frighten you too much to probably change course after this. Well, I would like to invite Professor Bob Thomas, and perhaps together we might love to have some questions from you.

Sounds like somebody from CNN. Yeah, they hired me. Well, I actually love to invite you to China to take a look at society. When I was in Paris yesterday, in fact, I was representing my company in receiving an award from UNESCO. The award was about how our organization has actually contributed to the communities of disabled. UNESCO was championing the hunger-free project by 2030. UNESCO was championing that as the world was progressing, the war was growing, we shouldn't leave no one behind. Think about us as a very progressive modern society. When you go to any mall, you actually have a parking lot for the disabled. When you go into the stack, it's an entrance of the mall, you have a space whereby it can be utilized for wheelchair. You build accessibility. This is as much as we have arrived in our understanding about the disabled people in a society. Think about Stephen Hawking, the greatest example of a disabled person with such huge knowledge that was captured within his brain. Had he not because of technology and not because of some complication help him explain what he has in his mind? The United Nations defines disabilities in a hundred and a thousand ways. That prize was sponsored and championed by the Sheikh of Kuwait. The reason why I flew to the United Nations to receive that award wasn't because of the funding. The reason why I flew to the United Nations was because I felt that I needed to learn what the world was doing together, how the world was collaborating together in making use of technology for greater good. The reason why I flew to Paris, stayed one night, received the award, gave a speech, shared with them what we have done in China to the world, and then flew here to share with you what we have done in China for marketing, and after this I'm flying off to Edinburgh to spend a weekend with my daughter. The reason for that is simply because I think the world needs to get together to understand all of us together much better. Think about what happened after 9/11, and think about what the Sheikh has done. The Sheikh of Kuwait, His Majesty, was there when I received the award. When I look at the hundreds of children that were being displayed by UNESCO, people that came like that and turned and sang a song together. When I look at what the initiatives were done in Hong Kong, in Singapore, in Dubai, in Pakistan, in Bangladesh. When I went up to the podium, I was supposed to deliver a speech, a well-written speech by my team. We waived the Sheikh. His Majesty was there. I didn't follow my script immediately. I said, 'You know what? No countries in the world, no companies in the world shall proclaim greatness of their past, shall proclaim greatness of their future, unless and until they know how little they have done for the disabled.' So I'm not answering your question directly. I'm saying that come see China. I think every single society has got their own ways of living together, but you all have to really see it for what you do. I think the question wasn't supposed to be a judgment, but more about operationally speaking, like whether or not the costs and things like that were different. Every way, every way we operate differently in the world. The so-called the standard answer to such question is if you operate in the land, you respect the rules and regulations of the land. In fact, if I would actually dive deeper into your question even further, a lot of people look at the equity, the share prices of my company has actually been down by 30%, and media would have reported that it's largely due to the government's initiative in trying to cut down the so-called licensing for games, etc. You are MBA students, you know that the equity of a brand will not easily just be influenced by one unilateral reason. There are reasons why stock markets are moving up and down. This is very unfortunate. Facebook just equally, we are equally in a sense. But my official and my personal stake is that a lot of stakes in my company are empty, and I think we are very hopeful that it will actually return to where it will be. Thank you.

Very good question, and often a similar question being asked by the BBC and CNN of the world. In the older days of so-called internationalization, when companies, if you are car manufacturers, if you are packaged goods consumers, if you sell soda, if you sell potato chips, you normally think about internationalization. I guess the key business decision from that is its scalability, and of course the other thing is it is probably one of the best ways to manage your cost structure by having the same thing and then shipping out to other parts of the world. I'm not sure whether my finance was correct, but your fixed cost is not impacted, and marginal cost will reduce dramatically in that sense. But I guess in the world of the Internet, sometimes we were both just talking about it in your office just now. There's somebody wrote a book saying 'If you build it, they will come.' Don't you when you build it, it need not necessarily mean that they would come. We try to actually launch it. It's the same reasons why many respectable platform companies in the world don't quite get it in other countries. In our line of business, there are such things called adoption rate, there is such a thing called network effect. WeChat might be great, but the strength of it which so happens fits very well in the cultural behaviors of Chinese audience. For us to bring WeChat into other parts of the countries, there are many factors that we consider: whether the readiness of the market for an ecosystem to be reborn, whether in that marketplace certain key players have already enjoyed a network effect. Finally, to be very honest, they ask you a lot of things that we leave it to do back home in China. When you have 700 million people, when you start looking at individual markets, there's a lot of cost-benefit analysis that comes into play. But having said that, I don't profess that if you were to be there and hope you know there will be there one year from now asking me the same questions, two years from now asking me the same question, if I'm giving the same answers, I shouldn't really be here anymore because this answer is relevant as it is today. A year down the road, two years down the road, if we still haven't figured out how we want to move out, I think Houston, we have a problem. Thank you.

We look at one of the comments I made to any one of the journalists was that I treat Moments as a private property of consumers. So in other words, you shouldn't bombard people with things that they don't need. So we actually from a management perspective, we constrain it. Each user wouldn't get more than two ad exposures in a day, and we intend to keep it that way. It is not meant for monetization, but it's meant for the engine to self-learn to make sure that precision marketing does have a role in enhancing the quality of life of our users. Thank you.