Over the last few years, there has been a lot of talk about EB-5 marketing in China. About once a month, we are approached by different agencies or individuals asking about different platforms and techniques for EB-5 marketing in China. In this article, we will explain what the EB-5 investment visa is and how to attract Chinese investors to your EB-5 project.
Understanding the EB-5 Investment Visa
According to Bernstein Osberg-Braun, P.L., “The EB-5 visa is an immigrant visa, open to all nationalities, granting the qualifying applicant permanent resident status, commonly known as having a “Green Card.” Permanent resident status carries with it many benefits of which investors would want to avail themselves. A Green Card holder can petition for permanent resident status for his/her spouse and children under the age of 21.
It removes employment restrictions, allowing the investor to work in any field he/she desires, as well as making him/her eligible for social security upon retirement. It makes international travel simpler, as an I-94 is no longer required upon entering the country. It allows foreign national homeowners to apply for homestead exemption and realize significant tax savings. Essentially, becoming a permanent resident affords the Green Card holder all the rights and benefits of American citizenship except voting rights.”
The pilot program stated in 1992, but it wasn’t until significant changes were made in 2011, that the program took off. Today, according to IIusa, “Program utilization is at an all time high with investor petitions more than doubling between FY 2011 and FY 2012, setting a record for 2013, and on pace to beat that record by over 40% in 2014. EB-5 investments in FY 2012 alone contributed over $3.39 billion to U.S. gross domestic product, supported over 42,000 American jobs, and generated over $712 million federal/state/local tax revenue – all at no cost to the US. taxpayer. The current record-breaking investor demand ensures an even greater contribution reported in 2013-2014, which will be published once currently pending studies are completed.”
Above we described the benefits for both investors and the US government, but what are the general requirements to obtain an EB-5 investors visa? According to the U.S. Citizenship and Immigration Services, “All EB-5 investors must invest in a new commercial enterprise, create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident, and invest at least 500,000 USD.”
The Importance of the Chinese Market
According to EB-5 Center, “Essentially, Chinese EB-5 cases comprise over 85% of all EB-5 cases, which is another way of saying without Chinese cases, the EB-5 market will be dead.” The importance of the Chinese market cannot be overstated, with continuing social, economical, and environmental issues facing China’s growing wealthy class, it is not surprising that many wealthy families are looking for safer investment opportunities. It has been a well documented phenomenon that many wealthy Chinese entrepreneurs are leaving China. According to Forbes, “According to a new study, almost 60% of China’s “high net worth individuals,” defined as those possessing more than 10 million yuan in investable assets, are either considering emigration through investment programs or are completing the emigration process.”
Many of these articles report that America is the preferred emigration destination for many wealthy Chinese families. According to the United States Department of State Visa Services, “The China Employment Fifth (EB-5) preference category has become “Unavailable” for the remainder of FY-2014. This action is necessary because the maximum level of numbers which may be made available for use by China EB-5 applicants during FY-2014 have been reached.”
During the 2014 fiscal year, the total number of Chinese EB-5 preference category applicants was reached, which shows an increasing competition between wealthy Chinese families to immigrate abroad, especially to America.
Reaching the Chinese Market
One of the most common requests is for more information about marketing on social media. The most common assumption is that many HNW Chinese individuals are using social media to gather information on EB-5 investment opportunities. There are over 600 million social media users in China and many marketers are interested in social media marketing campaigns to reach potential investors.
The assumption is reasonable until we think about the investment. Almost no one is turning to social media to invest half a million dollars. While social media is useful for FMCG and for brand identity, it tends to be less productive for investment companies.
Companies can use social media to have brand presence and to conduct research. LinkedIn is a great social site to research potential clients, but running marketing campaigns on social media sites like Weibo or WeChat is not recommended. These campaigns can cost a lot of money and deliver little or no real results. The average age of social media users in China is between 25-35 years and the average age for HNW individuals in China is between 45-65 years.
The HNW individuals that are considering an EB-5 investment visa are more likely to have a financial adviser and receive investment advice from a banking/investment institution or close wealthy friend than from a loose social contact. With that said, WeChat shows the most promise in terms of mainstream social media. WeChat requires closer connections and tight knit groups, which can lead to better prospects, but requires greater trust to enter groups. Other niche social networks do exist, but many require invitations to join and have stricter policies regarding marketing to users.
TV Advertisement is another option for marketers, but it has its own set of problems. According to CMM Intelligence (2008), “Advertisers face a number of general challenges in China, such as:
- Media fragmentation: there is a huge number of media outlets to navigate.
- TV Mass Media No 1 – and increasingly expensive with little program
diversification and high CPM as well as YOY 20% price increase.
- Lack of professionalism with regards to media buying and employment of
- Lack of good analytics & information.
- Restrictive media environment with regards to content and censorship.”
Although there have been improvements, CMM’s report from 2008 still holds weight. Many media buyers and agencies still struggle with these problems today. Digital advertising was accelerated in China due, in large part, by the difficulties of traditional advertising.
Marketers looking to advertise their EB-5 project to wealthy Chinese investors will still run into one of the major drawbacks of TV advertisement: analytics. It is difficult to track and effectively determine your ROI on TV advertisement in China. Another major drawback is the lack of diversification within the media offerings of TV channels in China. Lack of solid analytics and little program diversification makes it difficult to target wealthy Chinese investors using TV advertisements.
Print Media like magazines and newspapers still hold some value in terms of targeting. There are many investment, real estate, and lifestyle magazines targeting wealthy Chinese individuals. These magazines boast large readerships and high circulation, but they are still subject to the same restraints has TV advertisement, i.e. it is difficult to track and effectively determine your ROI.
The plus side of print media in China is the targeting and variety of content is much better than TV. There are magazines for almost every hobby or “lifestyle.” Investment, business, real estate magazines are all available. Here is a small list to get you started.
Digital marketing should start with a localized website. If you are serious about EB-5 marketing in China than you should start by building a stand-alone localized website. This site can be hosted in China or outside, but it must be built and designed for Baidu. This means you cannot add a few Chinese language pages to your current company site. Almost every agency can build this type of site. If you need help finding an agency feel free to ask or check these pages: Agencies in Beijing, Agencies in China, Agencies in Hong Kong.
Once you have your site built, you can start a SEM campaign on Baidu. This will get the original views and traffic to your site and start to build your presence online. The goal is to build a site with strong Baidu SEO and eventually bring 70-80% of your traffic from SEO techniques. A campaign can be expensive and should only be used for 20-30% of traffic generation of specific keywords that are important to buy.
Apart from Baidu and SEM, SEO; you can also work individually with investment, real estate, business and lifestyle websites. This strategy will be costly, but based on data driven value, may be worthwhile. There are multiple ways to work with these websites including banner advertisements (not recommend), native advertisement (expensive), and/or other techniques (depends on site).
Email marketing is another important, often overlooked, digital marketing technique. Building an email list is very important, but also risky in China. There are strict laws about sending advertisement through emails in China. An article by Hal Licino on Benchmark titled “Maintaining Compliance with China’s Severe Email Marketing Laws” is a good start to learn more about email marketing in China. This shouldn’t scare you away, only help you understand some of the differences you might face in China. If you are still interested in email marketing here is an agency that offers services: Marketing Future. They should be able to answer any more questions you might have about email marketing in China.
Other Marketing Techniques
Other techniques for EB-5 marketing in China include events and client trips. Events like trade shows and investor parties are useful for EB-5 marketing in China. These events bring potential investors together for the purpose of introducing investors to opportunities. Events can become expensive in terms of booths and staff, but the leads and potential investors should be more qualified than a random TV, internet, or magazine viewer. Any company looking to market their project in China should attend at least one or two events per year.
Client trips tend to be very popular for companies engaging in EB-5 marketing in China. The client trip is important for many reasons, but it comes much later in the process. Client trips are a great way to introduce a project, but only after the clients have been vetted and there is indication that the clients are truly interested in investing.
Final thoughts on EB-5 marketing in China
The EB-5 investors visa is a great opportunity for foreigners looking to immigrate to the US and many Chinese investors are looking into the opportunity. It is important for you to understand the different marketing techniques to effectively target and attract potential Chinese clients.
EB-5 marketing in China is not extremely difficult, but does require a strong understanding of the local environment (online and offline). This introduction and overview was designed to give you a brief look at some of the marketing techniques and to help you better understand the EB-5 visa. If you continue to have questions or would like additional information, contact us.