China is an increasingly important market for Scottish products across a range of categories, so how can Scottish brands make the most of the China consumer opportunity in 2024 and beyond?
Since 1996, Scotland’s total exports of goods to China have grown by more than 1,000% to £1 billion per year. In the four quarters leading up to Q2 2023, Scottish exports to China grew 11.6%, nearing the high levels seen in 2017-18. This drive was primarily fuelled by a rise in the export of beverages (+35%), power-generating machinery (+11%) and road vehicles (+338%).
Chinese consumers already have a voracious appetite for Scottish products and brands, including whisky, textiles and seafood. For example, farmed salmon — the majority of which is produced in Scotland — is the UK’s biggest food export, amounting to £578 million in 2022, and sales to China soared 57% in the first half of 2023.
Scotland is also a popular destination for Chinese tourists. In 2019, China was Scotland’s fourth largest international source market by tourism expenditure in 2019, and Edinburgh was the UK’s second most-visited city after London. This looks set to continue as we draw away from the pandemic years, especially as direct transport links expand; in late 2023, Hainan Airlines announced that it would extend its direct flight between Edinburgh and Beijing, with four flights a week during the peak summer months.
As is the case across the UK, Scottish retailers and venues can prepare for a rise in the numbers of Chinese tourists by creating targeted service offerings, including hiring Mandarin-speaking staff and implementing Chinese payment options such as WeChat and Alipay where possible.
The Chinese appetite for all things Scottish will only grow as both the country’s middle class and the number of high-net-worth individuals continue to expand over the next decade, with some predictions indicating that the high-income population in China will grow from around 30 million now to around 115 million people by 2035.
For tourists and consumers in China alike, Scottish brands are associated with values like quality, tradition and sustainability. This has played into the hands of heritage brands like Napiers the Herbalist. “We’ve found that maintaining authenticity, staying true to our Scottish heritage and ensuring this is conveyed in our marketing, packaging and tone of voice has been key when trying to position ourselves for success in China,” says Arjun Koyappalli, Managing Director of Scottish health and beauty brand Napiers, who will be speaking at CBBC’s China Consumer Scotland 2024 event on 8 February.
Napiers, which was founded in Edinburgh in 1860 by pre-eminent Victorian botanist and the most famous herbalist in Scotland, Duncan Napier, offers a range of herbal remedies and natural skin care products. Its products have resonated well with young, affluent consumers who are increasingly prioritising their health and wellness and are willing to spend on products with active ingredients targeted at specific health concerns. In China, the brand employs a multi-channel strategy, including social commerce, KOL (aka influencer) live streams, and e-commerce platforms like Tmall.
Brands must walk a tightrope between maintaining their authenticity and appealing to the values of Chinese consumers. “To thrive in the Chinese market, Scottish consumer brands must embrace a strategy rooted in cultural respect and adherence to market norms. Localising their offerings and actively engaging with the Chinese audience are pivotal steps towards success,” says Dora Zhou, Managing Partner at BARK Media (who will also be speaking at the China Consumer Scotland event). “Brands that grasp the subtleties of the market, prioritise forging strong connections with consumers and wholeheartedly embrace innovation will not only endure but excel in the ever-evolving realm of Chinese business.”
In order to thrive, research is a key element; everyone should go into the Chinese market armed with stats, analysis, and research. — Kristina Koehler-Coluccia, Head of Business Advisory, Woodburn Accountants & Advisors
All brands that have succeeded in China, Scottish or otherwise, agree that it is essential to do extensive research and understand the differences in the way the Chinese market and Chinese consumers operate. “You have to visit the market to immerse yourself in the local culture. A successful international brand in China will have to listen to the local cultural narratives and reinvent itself to be relevant and exciting,” says Joanna Zhou, China Commercial Manager at Holland & Barrett.
Photo by Connor Mollison on Unsplash
