Do you know your Moonlight Clan from your Too Cool tribe? UK China Consumer Week 2021 touched on everything from China’s consumer tribes to KOLs, brand partnerships to ‘phygital’ retail. So how can British brands better navigate China’s dynamic consumer and retail sectors?
Post-pandemic China is a consumer market redefined. While some of the fallout from the pandemic reflects the acceleration of market trends already underway, such as live commerce and hybrid physical and digital consumer events, others have emerged as a reaction to the crisis and its impact. The recent UK-China Consumer Week 2021, a week-long online event series that kicked off on 19 April, shed light on some of the key issues British brands need to be aware of in navigating the Chinese consumer market.
Who are Chinese consumers?
Chinese consumers are highly sophisticated shoppers and often think deeply about the brands they purchase and how these will reflect their identity and style. For example, a recent study found that on average Chinese shoppers need 15 touch points in formulating a retail decision compared to seven for Western consumers. Unsurprisingly, due to China’s vast size, differing levels of development and diversity, there is no ‘one size fits all’ when it comes to selling to China.
China has many consumer tribes, and it is necessary to get to know them and understand which tribes your brand appeals to. For example, the ‘Moonlight Clan’ (月光族), exuberant urban consumers who spend their entire salary before the end of each month, are vastly different from the ‘Too Cool’ (土酷) tribe – rural youth with big aspirations in China’s small towns.
International brands should also be aware of ‘guochao,’ the rise of home-grown brands and consumer nationalism, and strive to avoid cultural faux pas and misunderstandings. Staying curious and taking the time to research, connect with, and get to know Chinese consumers is of critical importance to achieving success and longevity for a brand in-market.
Success in China hinges on continued curiosity; the speed of change and fluidity of consumer identities mean that we should all be constantly questioning our understanding and approach to the market.
The power of partnership
Navigating the journey into the Chinese market is often easier when working in collaboration with a partner. That partnership might be with a distributor, a cross-border e-commerce platform, or a celebrity that endorses a brand’s products. Again, strong communication and cultural understanding, underpinned by legal advice and IP protection are key to protecting brands and company partnerships in the China market.
Don’t underestimate the costs of market entry for China. Big market does not mean everyone can make money.” – Mike Hofmann, Melchers China
China’s retail landscape
China’s retail ecosystem is highly dynamic and incredibly innovative. The pandemic has catalysed and accelerated experimentation and innovation in many different sectors of China’s retail landscape.
Under China’s ‘new normal’ and the ‘stay-at-home economy,’ the behaviours and expectations of shoppers are constantly evolving, as people have more time to shop around and browse different e-commerce platforms. Many brands and platforms dealt with this by engaging with people who were locked down at home via live streaming or by lightening the mood with gamification and virtual avatars.
The pandemic has also deepened the blending of physical and digital (‘phygital’) retail in China. Despite rapid online innovation, brick and mortar stores still play an important role in retail in China. Hema (sometimes known in English as Freshhippo), Alibaba’s chain of fresh produce stores, is a great example of how brands can seamlessly blend physical and digital retail via a powerful omnichannel strategy.
Localisation should also always be top of mind. Companies need to think carefully about how their brand and products can best fit into the Chinese market – and indeed whether they will fit at all – from packaging and name to the contents and ingredients used, to the tier of the city in which products are released.
The China market is an amplifier. If you have a successful brand story in the UK, you can work towards amplifying that in the Chinese market. – Syek-Yi Chan, Charlotte Tilbury
Social media and social commerce
Companies need to stay on top of the latest developments and tools on social media platforms such as WeChat and Douyin and how they can be used to sell products and build brand awareness. There are a wealth of successful examples to learn from, such as the case of leading Chinese make-up brand Perfect Diary’s social commerce strategy, which used a clever brand avatar known as Xiaowanzi plus fan-based WeChat groups to foster a strong sense of community. The power of social commerce to foster a sense of community, exclusivity and belonging amongst Chinese consumers searching for their ‘tribe’ can have great potential for UK brands looking to build their reputation and presence in-market.
China’s KOL economy and the rise of live streaming
One of the most exciting and fast-developing areas of China’s consumer landscape is the rise of key opinion leaders (KOLs) and the emergence of live streaming as a popular means to buy and sell products. Live streaming and e-commerce based revenue in China from platforms like Taobao Live and Douyin reached RMB 961 billion in 2020 and is expected to exceed RMB 1 trillion in 2021.
Brands can turbo-boost sales by working with popular Chinese KOLs such as Dabo, K, and Tan Liren. Even away from KOLs with millions of followers, smaller so-called micro influences can be effective brand advocates as their fans are usually especially loyal, which may be helpful for brands in niche markets. The best time of year to launch influencer-based marketing campaigns in China is usually the Chinese New Year and Golden Week holidays, when consumption levels peak.
Impossible to resist as a consumer opportunity, China remains very much a destination for all brands looking to create a global impact and presence. – Antoaneta Becker, CBBC’s Director for Consumer Economy
CBBC would like to express our thanks to all attendees, speakers and supporting organisations, and our sponsors, TONG, Elanders Group, Samarkand Global, Ruder Finn and ADN Import Foods, who made UK-China Consumer Week possible.