Garnier China

How Brands Have to Adapt their Marketing in China

Brands have long been aware that what sells here in the West doesn’t necessarily sell that well in the East and nowhere is this more noticeable than in China.

Often seen as cut off from the rest of the world, the country represents one of the biggest retail markets for brands and succeeding in it is something akin to the Holy Grail.

According to Start Up China: “A 63% majority of international companies operating in China acknowledged that they needed to alter their product specifically for the Chinese market.  In most cases, this does not mean completely creating a new product or service, but rather making small adjustments to better suit Chinese culture and preferences.”

How Taobao got the edge over EBay taobao

A big difference between the West and countries like China is the way things are paid for, something which eBay were slow to take up.

  • Whereas eBay wanted people to pay by credit card, Taobao realised that many Chinese consumers didn’t have them or were worried about paying online. They introduced a way for a buyer to pay for a product in cash when it was delivered to the door.
  • EBay required sellers to pay for listing a product whereas Taobao decided to make its money from advertising revenue.
  • EBay didn’t particularly like that customer and seller would bargain on the price privately and so didn’t add a chat feature. Taobao accepted that the Chinese way is to haggle over the price and was happy to include a chat function that allowed this to happen.

Localisation is the key

According to Forbes, marketers make the mistake of treating China as one big market: “Treating China as a single market is a flawed concept – it’s 29 different provinces with their own peoples, dialects, customs and brand preferences. Procter & Gamble was one of the few U.S. marketers to realize this early on, investing extensively in proprietary research across multiple cities.”

Garnier ChinaNot only that, but social marketers have to deal with a whole swathe of localised digital platforms such as Weibo and WeChat. China’s social media landscape is vast and complex and choosing the right platform is integral to brand success particularly considering that there are around 500 million netizens and the number is growing.

Beware of bad translation

Many brands, both big and small have fallen foul of poor or ill advised translations of their products and key messages. When Pepsi first ventured into the market its slogan “Pepsi brings you back to life” translated to the Chinese public as “Pepsi brings your ancestors back from the grave” and KFC entered with “Finger licking good” which got translated as “eat your fingers off”.

In truth, many large brands have failed to do the research needed into the culture and customs of their target audience when moving their product into another country.

According to Mike Fromowitz of Ethnicity Multicultural Marketing and Advertising Inc.: “Many international companies have had problems with expanding their brands worldwide because they have failed to put in the research and effort necessary to understand the culture. This has led to several failed brands, to offended consumers, and to the loss of millions of dollars that comes with having to start all over again.”

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Marketing in China

Do Marketing Departments Need a Deeper Understanding of the Chinese?

The continued explosion of smartphones throughout China will provide marketing teams with major challenges over the next few years. The country is opening up and it’s not just people in Tier 1 and Tier 2 cities, where the affluent few live, that brands will be able to reach out to.

imageThey will have to get to know consumers in smaller cities and towns across the whole of China. And that means discovering a whole new set of marketing demographics.

Tier 1 and 2 cities have long been seen as areas where luxury brands from Rolex to Yves St Laurent have been successful. Even specialist food products are beginning to get a foot hold in these places, fulfilling the need for luxury items that set individual consumers apart from their compatriots.

“Online groceries are developing quickly in Tier 1 and Tier 2 cities,” says Yougang Chen, a McKinsey partner in China. “China’s urban consumers enjoy niche food products, and many kinds of products are not easily available in supermarkets.” (http://www.businessweek.com/articles/2014-02-13/how-to-reach-china-s-avid-online-shoppers)

So who are these new customers hitherto beyond the reach of social media marketers in the West? Around 54% of China’s people live in cities and that figure is growing as more office jobs are created attracting people from the rural areas looking for a better and more prosperous life. China’s cities are divided into tiers from 1-6 depending on population and economic value.

Tier 1 cities such as Beijing and Shanghai represent highly developed markets for Western brands and are home to consumers who are considered affluent. Tier 2 cities such as Nanchang and Zhuhai have been attracting increasing attention from brands because of their growing wealth and greater propensity for consumerism.

Below Tier 1 and 2, the classification, originally introduced by the Chinese government, becomes a little less easy to understand. But the truth of the matter is that smartphones are opening up these areas to greater consumerism and Western brands will have to get to with it.

Brands like Proctor and Gamble have been making contact with the less affluent members of Chinese society for years, even before the advent of social media and internet marketing. And Proctor and Gamble, the maker of household and personal-care products, has three of the top five brands in China: Colgate, Pampers and Crest.

Following some mistakes in the late 80s and early 90s, they realised that a one size fits all strategy wasn’t going to work in China and they had to get to know their consumers better. The way they did this was to send out 1000s of their employees to stay with and observe families around China, using that information to develop the right products for those people and the right marketing approach.

What brands need to understand, if they are going to sell to new markets which are being brought closer by the expansion in smartphone usage, is that they are not a uniform body of people. In other words, they are not the affluent rich.

“The city-tiered approach that Chinese marketers mastered well in traditional and digital marketing won’t work for mobile. Why? Because consumers of all levels of mobile sophistication can be found in all types of cities — and even in rural areas — and engaging them will require a nuanced understanding of a marketer’s particular audience.” Xiaofeng Wang (http://blogs.forrester.com/xiaofeng_wang/14-02-13-how_to_reach_your_unique_mobile_audience_in_china)