Innovation & Technology,Marketing
• 4 minute read

Big Data: The Next Big Trend to Watch

As big data applications become more prominent, the world will never be the same again

By Louisa Wah Hansen

As we enter the new era of “smart marketing,” big data application will become prevalent in China very soon and companies would do well – if they could leverage new technology to analyze data they gather from customers, according to Lau Kin Nam, Professor of Marketing at the Chinese University of Hong Kong Business School and Director of the newly launched Marketing Engineering Lab.

Prof. Lau names three “rising stars” in China, each of which is sitting on a gold mine of big data. The three, known as “BAT”: B for Baidu, the Chinese equivalent of Google; A for Aligroup, the holding company of online wholesale and retail channels Alibaba and Taobao; and T for Tencent, tge creator of the highly popular QQ and WeChat chatting software and other mobile applications. Each of these companies monopolizes its respective market and has access to transaction and interaction data generated by millions of customers.

“Just look at the size of the companies. Each company has a huge number of customers. Taobao, for example, has a team with thousands of IT professionals and data analysts. Every day they try to find applications for its data to help serve their customers better. They are very much aware of the importance of big data,” says Prof. Lau at the opening ceremony of the new Marketing Engineering Lab.

Besides these three mega-sized companies, Prof. Lau says the potential for big data application is very promising for other industries as well. For example, banks in China are huge, but the way they use data to drive marketing is still in a “preliminary stage.”

“Tactics that involve data integration and mining to acquire additional customers are something banks are looking for,” he continues. “The average income in China is rising and banks are growing, but the competition is also more intense nowadays. So they need to rely on IT and combine that with marketing.”

He gives an example to show how banks could better utilize customer data. When a customer opens a bank account, the bank will collect his address. But this information is usually not used further for marketing purposes. However, if the bank could identify customers from the same family (based on the same address), it could sell insurance products that offer protection for the family members. Other types of services could also be offered to the customers based on analyzed demographic information. For example, an address can tell how rich a person is; the age and autopay transactions such as school fee payments can tell which stage of life a person is in; a change of address or an increase in salary can signal major life events.

“Using all these data, a bank can go one step ahead to predict the future needs of its customers,” says Prof. Lau.

Given the sheer number of enterprises and consumers in China, Prof. Lau believes that the development of big data in China will be faster than in Hong Kong. At the same time, mainland   companies that have adopted big data as part of their marketing strategy are using new machines and software that leapfrog the older generation of data-mining and customer relationship management tools.

Despite the fact that China may surpass Hong Kong in its development of big data applications, Hong Kong is currently leading the field in terms of hands-on experience and training capability. The CUHK Business School, for example, has a team of professors and students who have been providing consulting service to the financial and retail industries since the late 1990s, helping banks and retailers analyze customer data and improving their marketing efforts. For example, it has helped a skin care company sift through its customer data and significantly increased its customer retention rate. The team has also worked on projects in the Mainland, such as a data mining project for a credit card center in Shenzhen.

With the donation of sophisticated data-crunching software from IBM, the new Marketing Engineering Lab at CUHK Business School looks to further drive the big-data driven marketing revolution in Hong Kong and China. A new undergraduate course on quantitative marketing will be offered, and the existing EMBA course on smart marketing, offered by CUHK professors, IBM business consultants and industry experts, will continue to be offered in collaboration with Mainland universities including Jiaotong University in Shanghai and Zhongshan University in Guangzhou. The lab will also continue to offer teacher training workshops, one of which took place in August and trained 65 Mainland marketing professionals.

“Data analytics is set to deliver increasing marketing values from customer identification, engagement and measurements,” says Prof. Jamie Jia, Chairman of the Department of Marketing at CUHK Business School. “As a pioneer in Greater China in offering quantitative marketing curriculum to undergraduates since 2010, we believe the data-driven marketing revolution has begun,” he says.

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