China Post Taps Acxiom To Grow Direct Mail Biz in China
Strategic pact will leverage database analytics to reach China’s growing consumer class
In a Beijing ceremony attended by senior executives from both entities, Little Rock, Arkansas-based Axciom Corporation, a billion-dollar leader in direct marketing technology and services, signed a “strategic cooperation agreement” with the China Post Group “to jointly expand China’s direct mail business by leveraging database marketing services.”
While a digital winter continues to spread over the print-based direct marketing business in North America and Europe, China is just getting started in the direct mail game, with China Post leading the way and Axciom now tagging along to counter their prospect of cooling growth in the West.
Several years ago, China Post, the giant state-owned postal and banking agency, began using its many thousands of letter carriers, armed with a detailed survey, to collect information about households and businesses across the country, with a special emphasis on economically developed areas.
This massive data collection effort has resulted in a rapidly growing database that currently contains more than a quarter billion records. And now the agency aims to employ Axciom’s technology and expertise in database marketing to exploit these copious information assets through a variety of new direct mail-related services for businesses inside the country and around the world.
And, well they should! In the past 20 years, the country’s per-capita income has grown a staggering 700%, with its wealthiest consumers clustered in the much-prized 25-44 age demographic. In the past five years, the percentage of the population considered to be “Zhong Chan” (literally “middle property”) has doubled, and by 2015 there will be 600,000,000 middle-class people in China – considerably more than 10 times the number of middle-class citizens in the United States.
Of greatest significance to marketers, in-country and the world over, that growth of middle-class consumers has been accompanied by commensurate growth in the consumption – of packaged, durable and luxury goods. And, with this growth in consumption has been an explosion in the use of credit cards and the purchase of life insurance, two industries that are heavy users of DM.
All of this adds up to a potential market for direct mail services in China that could quickly become larger than that of the US and the European Union combined, with a gap between them that will continue to grow over time, given current economic and population trends in many Western countries.
Lest tree-hugging readers worry about the environmental impact of all this, they should note that China has historically been a surprisingly timber-poor nation, forced to rely heavily on wood imports for domestic paper production, as well as home construction and furniture making. To counteract this weakness in the face of growing demand, some years ago the Chinese government undertook a number of aggressive developmental initiatives, including ones in sustainable forestry and paper recycling. We can hope that these programs will help to offset the environmental impact of the rapid growth in commercial mail production promised by China Post’s forceful foray into direct marketing.
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