10 actions for building valuable brands in China
- Stand for something
Many brands in China continue to successfully grow by adjusting their promotional activities according to how consumers clicked on an ad or scanned a QR code. These sales tactics are important and have worked well during the years of robust economic growth. But these tactics alone may not be sufficient to sustain growth over the period of slower economic expansion. Successful brands will remain important to the consumer not just at a particular moment of need, but over time, even as consumers becomes more cautious about spending. These brands will stand for something. They will have a purpose, a reason for existing that guides all their actions and communications.
- Advance the Chinese Dream
A communal society like China respects people who not only advance their own welfare, but also help their neighbors and the wider community. Similarly, brands can gain respect and strengthen their bond with consumers by communicating that their products or services provide more than functional benefits; that they make life better, healthier, and more enjoyable; that they help bring about a more prosperous and equitable society; that they help advance the Chinese Dream.
- Tell emotional stories
Worldwide, it is important to communicate with stories that define brands and connect emotionally with consumers. The difference in China is that brands have more opportunities to connect emotionally for both long-term brand-building and short-term sales conversion. Young adults spend a lot of time on social media, where brands can provide engaging content and purchase opportunities linked to e-commerce sites. It is critical to supply the most effective content, which depends on having deep consumer insight. A young person on social media may want to fit in with peers or express individuality; be seen as a global citizen or express pride in being Chinese. Telling the right story is crucial, but it can be complicated.
- Create memorable experiences
Not long ago, brand experience was less important in China. Gratified to finally experience material well-being, people were less concerned about how products were packaged or delivered. Even expectations for quality were low. Now that many consumers can get whatever they want whenever they want it, experience—from the functionality of the product to the intangibles that surround it—is a critical differentiator. Ten years ago, experience might have been limited to presenting a product for in-store sampling. Today, in addition to sampling, experience can be about telling the brand story emotionally in a
memorable venue. Or experience can be about the content the brand presents on social networks. Experience is also a brand extension opportunity. Having rapidly attained a high level of material well-being, many Chinese now are focused on improving their physical, spiritual and emotional well-bring with enriching experiences, such as exercise, entertainment, and education. Experiences that are new and distinctive and add harmony and happiness can attract people and potentially command a premium.
- Be innovative
It is vital, but not sufficient, to be innovative in all the conventional ways—original products, packaging, and messaging. Brands also need to be innovative internally, throughout their organizations. And brands need consider not only how to add innovative technology, but also how to use existing technology in new ways. Maximizing success on a platform like WeChat, for example, can result from connecting existing parts of an ecosystem in original, clever ways that improve peoples’ lives.
- Be social with Chinese characteristics
Because social media is more layered in China than in the West, making shorthand comparisons to Facebook or Twitter are too facile and often misleading. Social media in China is a virtual rendition of a traditional Chinese neighborhood, the alleys or courtyards where neighbors congregate to chat, debate, play cards, and also to share shopping, babysitting and other household tasks. Using social media, Chinese can communicate within and among groups, make recommendations, organize group buying, send gifts, and—ultimately—make a purchase. Adjust to social media as it exists in China, creating appropriate content and commercial opportunities for each platform or app and the intended audiences.
- Reach young and old
Young people, GenZ in particular, are driving social media and many online shopping trends. Understand their attitudes and shopping habits. The parents and grandparents of this these young trendsetters have particular interests and needs, too, plus substantial savings and willingness to spend money. China’s aging population is active and energetic. They are online socializing and shopping. And they represent an important market for many categories, such as travel.
- Reach multiple interest groups
In addition to understanding the Chinese market based on the traditional demographic categories that divide people, it is important to view the market based on the shared interests that cross demographic categories and connect people. With this knowledge brands can reach relevant audiences by identifying individuals according to their interests and related social media circles. Because of the scale of China, these audiences can be enormous. And because of their size, they are also diverse and fluid, with people moving in and out, which makes this important exercise potentially rewarding, but also challenging.
- Go direct to the customer
Chinese consumers increasingly expect products and services that are personalized to their particular needs. And they are often willing to pay a premium for this benefit. Personalization requires deep insights into customer behavior and attitudes. Those kinds of details can be more difficult to determine when consumer data is filtered by a major e-commerce ecosystem. Such insights sometimes can be more platform-centric than consumer-centric. Work with the platforms to refine data and make it maximally useful. But also work off the platforms. The one-to-one conversation, possible with direct-to-consumer marketing, will become increasingly critical as technology enables customer personalization.
- Invest in the brand
This basic advice becomes even more important as China’s economic expansion slows and brands look for growth opportunities in lower tier markets and overseas—places where consumers may be less familiar with the brand. In both instances, brands have two options: invest in sales activation, introducing the brand as an unknown entity, again and again; or invest in growing brand recognition and equity. These are not either-or options. The challenge is to select the right activation and brand building initiatives and balance them to maximize ROI. Investment in brands creates the equity that builds market share, commands a premium, and delivers superior shareholder value.