Working with (or Getting Around) China's Digital Behemoths: The BAT companies are not the only path

As in the US, where a handful of digital giants control the lion's share of audience usage and marketing dollars, so too has a powerful group of companies seized a large portion of the market—the so-called BAT companies, or Baidu, Alibaba and Tencent.

But China's marketplace is still in flux, and marketers are finding pathways into the market that don't always rely on the biggest players, said Laure de Carayon, the founder of China Connect, a forum for companies seeking to understand and engage with consumers in China.

One example of an alternative to the digital establishment is luxury ecommerce platform Secoo.com. The company places heavy emphasis on determining whether goods are authentic, hoping to appeal to brands troubled by counterfeiting problems faced by established platforms like Tmall, which is operated by Alibaba.

"Tmall's struggle to combat issues with counterfeits goods left the door open for a platform that had thought seriously about user experience like Secoo," said de Carayon. "This, in turn, has allowed brands that have struggled to sell on Tmall to book millions in sales on Secoo."

One brand that took an unusual path in China is Feelunique, a UK-based ecommerce platform focused on beauty products. It partnered with Azoya, a China-based turnkey ecommerce cross-border company, and saw its quarterly web sales double.

To be sure, the challenges of doing business in China are significant. Companies ranging from Facebook to the New York Times to Google to Uber have either been blocked outright or opted to withdraw from the market.

Apple, of course, has amassed a fortune from iPhone sales there. But it has faced demands from the government to shutter its iBooks, iTunes and Apple News services. So far, Apple has acquiesced to all such requests.

And beyond government controls, the sheer size and strength of the BAT companies poses significant challenges.

But, de Carayon argues, the Chinese market is still fluid in ways that the US and Europe are not. She points to the re-emergence of microblogging platform Weibo as an example. The Sina-owned service was widely thought to be on the path to irrelevance as WeChat blossomed. However, innovations like live streaming and ecommerce integration have helped grow Weibo's monthly active users (MAUs) to almost 300 million in Q3 2016, up 34% from the beginning of the year.

And the market continues to be a place of extraordinarily rapid change, she said, pointing to the streaming video market, which saw more than 200 new platforms emerge in 2016—a third of those are already earmarked for closure amid fierce competition, according to agency WalktheChat.

"For brands, it's so difficult to understand this market," she said. "It's changing so fast. You have to be very opportunistic, very agile, very quick."

—David Peter Green