In China’s Changing Retail Environment, the CMO is Becoming Obsolete

The traditional role of CMO(Chief Marketing Officer) is increasingly becoming out of favor in Chinese corporations due to changes in the market.  In fact, this is a global trend that has been reported in publications including CNBC, Adweek & Forbes.

No longer is the function of CMO about burning tons of cash for advertising; its responsibility is said to cover multiple business areas like digital, innovation, analytics, and strategy. But in hyper-digital China, the end for the CMO is nearing even faster.

One key reason for this is that in China’s fast-growing and highly digitalized economy everything can be traceable and boiled down to numbers. A number of smaller companies and startups can do the heavy lifting that will replace a marketing department such as gathering, consolidating, cleaning, tagging the data then develop them into diverse data derivative products and services. These service providers are replacing what would once be required of the CMO

This trend can be witnessed at recent Martech startup events here in Shanghai where it is common to find that traditional advertising agencies, PR, consulting firms, e-commerce operation providers, have suddenly repackaged themselves as “Digital Service companies”, “AI data companies”, “AI Marketing companies”.

These players are also very good at bombing you or confusing you with some latest concepts such as

  • Data Middle Platform
  • Data Management Platform
  • Customer Data Platform (CDP)
  • Integrated Marketing Cloud

…basically very similar yet overlapping jargon. Previous buzzing words for media buying like DSP, SSP, RTB are just gone and outdated. They would be screaming at you and banner-waving “every enterprise needs to set up its own data platform…” 

Well, they have sound justifications:

Today’s China online traffics is in the hands of internet oligarchy. E-commerce behemoth Alibaba wields its domineering presence over data and is in the process of establishing the most sophisticated data bank to empower all the consumer analysis and marketing decisions. Meanwhile, Alibaba can be a closed ecosystem in the sense that brands usually have limited access even to their own data. The ultimate goal for Alibaba is to become an omnipotent agency-like powerhouse into which brands incessantly throw money to complete all the steps of paid advertising, content marketing, and sales conversion.

It often leaves SME brands no choice but to surrender to Alibaba’s grip. But if larger brands do not want to be fully hijacked by Alibaba, partial autonomy might be found by creating your own data platform in collaborating with other online giants which tend to have a more opened minded attitude toward data sharing, for instance, Tencent, JD.com, Bytedance.

The bottleneck is most traditional CMOs were never trained on data platforms. None of them were trained on data security, either. If they think they can sit comfortably in their corner office and outsource external vendors to do all the dirty work, it probably will not work in that way anymore. It will require them to build their internal data team and a certain level of in-house capability in order to collaborate with the external vendors. It will require them to have the brain of a data scientist coupled with the muscle of technical know-how in order to set a clear digital transformation process for the company and prescient understanding of what should work or not work down the road. The error cost for experimenting with any new wave of shiny Martech trends must be controlled to the minimum.

The role of CMO is not diminishing but evolving. Now in China, it puts a spotlight on the talent emphasis on creating data value and result over marketing pedigree and tenure.

By: Cecilia Wu