Which sector(s) and products are growing the fastest, how are Chinese and foreign brands faring, and what are Chinese consumers searching for? As a foreign brand, what should you watch out for when designing, adapting and promoting a product in China?
These were the questions we wanted to deep dive into, when we were approached by ACBC (Australia China Business Council) to give a workshop to their members, as part of their ‘China Business Ready Series’.
This can be a really a hard topic to get right. How do we provide a thorough analysis on such a broad topic in 60 minutes, and at the same time, make sure everyone could walk away with some practical advice that they can start applying to their own industry right away?
This is what we did. Firstly, we looked at China’s macro e-commerce and cross-border environment to paint a picture of the context in which foreign brands are competing. This is also the context in which Chinese consumers have acquired and evolved their preferences for different products. If you know your buyers and their key motivators, you can create a product that they love. Secondly, we established a ‘framework’ that brand owners can use to create a competitive edge for their product in China. (We also showed how some products have done just that). Lastly, we provided a ‘rule of thumb’- a shortcut- that anyone can use to evaluate if their product is currently in the right space, or if it requires some further tweaking.
I encourage that you check out the video on this page to find out more. But if you are short of time, here’s your ‘cheat-sheet’.
1: The Macro Environment
Think New York’s Time Square- the noise, the street vendors, the traffic, the countless billboards, the buzzing energy. China’s e-commerce environment is a digital Time’s Square- with more products, more sellers and unstoppable transactions.
Take whatever product you are thinking of selling to China now, and put it in this new context. Would you design/price/package/promote your product differently? If so, what would you do differently?
For a lot of foreign brands going to China, understanding this is the crucial first step. If you are more used to thinking of online sales as ‘transactional’ in nature, you are missing the mark. Chinese consumers today are spoilt when it comes to product choices, and their attention is constantly being directed to the next new thing, just like how you would in Times Square. The way to convince them to look your way is to create something over and above your product’s functional value. Now, this may sound like marketing 101, but we typically find that brands tend to forget this important rule when going to China, and choose to instead focus on issues related to channels and distributions first.
If your product is wrong, even the best distribution strategies cannot make it a success- especially in an ultra- competitive market.
Before you do your homework on which channel to use- be it through daigous, Taobao, Tmall, JD or Kaola, take another look at your product and ask yourself: how would it stand out and continue to stand out for Chinese consumers?
2: The Framework
If you’ve been doing some research on China, you’d be familiar with the following keywords: premiumisation, health and fitness, lower tier cities, post 90’s, mobile connectivity and so on…
So which trend(s) should you watch out for when thinking about ways to make your own product stand out? Here a simple framework that you can follow- it’s all about satisfying Chinese consumers’ needs and desires through connecting to their hearts.
We refer to Hugh Mackay’s book: ‘What Makes Us Tick’ and the basic human desires Hugh listed here as a starting point. We then tested this out with some trending products in China in various industries (the examples we gave included cosmetics & beauty, health & fitness and food & drink) to see how they’ve gone over and beyond to deliver exceptional values and create unique consumption experiences for the Chinese consumers.
Another thing that all of these products did right was to be particular: particular about the consumer sub-segment they want to appeal to, the needs they have for a specific consumption scenario, and zero in on creating incremental value never seen before in their own vertical.
3: The Rule of Thumb
If you don’t remember anything else from this post, remember this: to succeed in China today is to have the ability to create ‘remarkable’ products.
And here we paragraph Seth Godin’s definition of remarkable to mean ‘worthy of making a remark about.’ This definition is probably more fitting to use today, because China’s e-commerce environment is increasingly driven and facilitated by communities. Communities create, share and ultimately buy together. (Think about the group buy e-commerce platform Ping Duoduo). In today’s China e-commerce environment, the passing remarks made casually by one key KOL (key opinion leader) or celebrity can literally shoot a product up on the trending chart overnight.
Does your product satisfy fundamental human needs beyond its functional values (that Chinese consumers find relevant to their lifestyle)? What makes it worthy of making a remark about? If you can answer these questions with confidence, you are well on your way.
To find out more:
Click on the video above to watch the full presentation. If you have any questions or comment please feel free to get in touch with us in the following ways:
- +61 2- 8113 3600