On 8 February, the China-Britain Business Council hosted its China Consumer Scotland event in partnership with Scottish Development International at its Edinburgh headquarters.
Tailor made for Scottish consumer brands interested in discovering China’s vast and potentially lucrative consumer marketplace, the event brought together leading consumer brands operating in China, alongside Chinese importers and retailers, to share their insights and tips for success in China with delegates.
The session was delivered in person ahead of CBBC’s Chinese Burns Supper and the 2024 China-Scotland Business Awards, which took place later that evening.
The event opened with a Panel Session, ‘Entering and succeeding in the Chinese market – Hear from companies in the market’, in which CBBC’s Director of Consumer Economy Antoaneta Becker chaired a discussion with Joanna Zhou, China Commercial Manager at Holland & Barrett; Arjun Koyappalli, the Managing Director of Napiers the Herbalist; and Sarah Armstrong, Founder and Creative Director of lifestyle brand, Pinyin Press.
The discussion introduced the scale and size of the China market opportunity and the ‘new normal’ in China following the Covid-19 pandemic. Despite changes to the market, growth remains impressive, with consumer spending outstripping China’s overall economic growth, and the market is packed with potential for UK brands. The market is characterised by a new ‘rational consumption’ trend, with consumers carefully planning spending due to economic pressures and societal trends. Consumers are also spending as an escape from pressures and a means to pursue wellness – which is a key buzzword in China’s consumer landscape right now. Trends to watch include the rise of Chinese whisky, which has the potential to reshape the global distillery market.
Sharing her view of opportunities in China, Holland and Barrett’s Joanna Zhou remarked: “It has been a good three years… but we can definitely see the changes in the consumer market following Covid-19 and economic changes. We have found when working with the right channels the opportunities are still available.”
She also introduced guests to a trending phrase in the China, ‘Morning C Evening A’: “Morning coffee and evening alcohol, or morning vitamin C and evening vitamin A (when used as skincare ingredients) – which symbolises Chinese consumers’ desire for fun as well as wellness”.
Zhou also shared how the company entered the China market by leveraging both B2B and B2C channels. It was easier for the company to start with cross-border e-commerce due to the fact that it was selling regulated vitamins and health products, however they have since branched into B2C with Tmall and Alibaba. For other channels, the company works with distributors, and she recommends keeping a close working relationship with them, continuously evolving and adapting those partnerships whenever possible.
With regards to Chinese consumers’ experiences, Zhou noted the importance of making the consumer journey as speedy and streamlined as possible, i.e., with as few clicks to purchase as possible. She shared how Holland & Barrett has worked with UK and Europe-based influencers to tap into the Chinese consumer market in the UK as well as domestically, with KOLs driving huge sales.
The audience also heard from Sarah Armstrong, Founder and Creative Director of lifestyle brand Pinyin Press. Sarah shared her brand’s journey in the China market and its cross-cultural design concept – which filled a gap in the market to create an affordable gift brand.
Armstrong noted that it is “interesting seeing a progression and seeing that Chinese consumers are appreciating Chinese imagery and symbols like dumplings and lucky cats”, with homeware and home gifting becoming increasingly popular.
Currently, Pinyin Press sells its products on Taobao and WeChat as well as via offline channels. Armstrong noted that she doesn’t work with KOLs as a small brand, but reaffirmed the value of meeting consumers face to face and selling products at craft markets, saying: “I put quite a lot of time into offline events, festival events, and shopping events in Shanghai. [These events] attract an excellent audience of Gen Z and Millennial consumers; I can talk to them face to face and get them engaged with my brand story and products”.
She also noted how localisation never stops – a point that was reinforced by CBBC’s Antoaneta Becker, who observed that the rise of guochao in the Chinese market means that brands can no longer simply replicate Western products for Chinese consumers but instead must work to understand cultural relevance and the importance of Chinese culture in order to win over Chinese shoppers and avoid faux-pas.
Pinyin Press’ products were on display for China Consumer Scotland guests
Arjun Koyappalli, Managing Director of Napiers the Herbalist, also shared his insights with the audience. He explained how Napiers has accelerated its growth and development over the last two years in China by working with parent company Samarkand.
The company has tailored its marketing and branding strategy in Scotland to target local Chinese consumers, and he explained that: “Edinburgh has many Chinese students and tourists. We have tapped into that audience via Xiaohongshu, and have run many offers like a special Chinese New Year offer to bring in Chinese student consumers based in Edinburgh”.
“Chinese consumers have much higher standards for packaging and presentation of products, and this has helped Napiers to level up our packaging and presentation of products”.
Koyappalli also spoke about how the brand has adopted a multi-channel approach to the Chinese market, using live streaming, social media platforms, offline and other online channels, with Napiers’ first live stream on Douyin doing an amazing three years’ worth of sales in one session.
Iain Stirling, Commercial Director of Arbikie — who sat in the audience — also joined in to share his insights on China’s beverages market, sharing how CBBC supported him to enter the market via China’s CIIE tradeshow. He described how Arbikie is a “family-run and legacy business, so it suits the Chinese market well”, with Chinese consumers valuing brand story and integrity. He added that face-to-face engagement is key to unlocking the Chinese market and observed the increasing interest amongst Chinese consumers in whisky, stating that UK distilleries should get ready for an influx of Chinese whisky lovers!
To round off what had been a thought-provoking session, each speaker shared one key tip for success in the China market.
- Joanna Zhou: “Don’t work with people you don’t trust; don’t doubt the people you work with”.
- Sarah Armstrong: “Keep adapting and start small. Even with a small slice of the market, brands can do well in China”.
- Arjun Koyappalli: “Make sure you tailor your strategy to the Chinese consumer”.
The event’s second Panel Session focused on the theme ‘Top tips to build a successful China strategy – the views from Chinese importers and retailers’, with CBBC’s Chief Commercial Officer, Claire Urry, hosting a discussion with William Dunne, Senior Business Development Manager at Poizon; Isabella Liu, International Brands Director at Matro Group; and David Hampstead, CEO and Co-Founder of Samarkand Group plc.
William Dunne, Senior Business Development Manager at Poizon – a luxury marketplace for Gen Z in China – described the value of Chinese social media platform Xiaohongshu, stating how it originated as a means for Chinese consumers to find niche brands. With Poizon’s key demographic being 25-year-olds seeking individualism, Xiaohongshu has allowed it to reach and connect with consumers interested in its unique products.
Dunne also described the role of social commerce in China, with shoppers often engaging with KOLs that they trust more than they do with brands. Consumer trust is key to cracking the Chinese market, and live streaming with trusted KOLs is a great way for brands to do this.
“For us, live streaming is a big part of our business; it’s how we started… KOLs have more of an impact in China when it comes to driving sales than in other markets…Social commerce is an ecosystem that you have to buy into in order to do well in China,” said Dunne.
Dunne shared that consumers in China are very savvy and do a lot of research prior to purchase compared to their international counterparts, and therefore, having an established brand presence and transparent supply chain in the UK is a huge advantage for brands interested in exporting to China.
With 100 million monthly active users on Poizon, the company currently only sells to China, however, it will expand its app into the US and EU. The company is also trying to tap into the Chinese diaspora in the UK now. In addition, Poizon is also seeing an increased demand for ‘real life experiences’ amongst its Chinese consumers that span beyond what just an app can offer.
He noted the importance of taking risks in the China market, saying: “You have to be willing to take a calculated risk in China, but with the right positioning, China is definitely capable of being unlocked”.
Isabella Liu, International Brands Director at the Matro Group – one of China’s leading retailers – shared her view that sustainability is a key trend inspiring Chinese consumers’ purchasing behaviour. With Matro Group based in Suzhou, known for its UNESCO world-heritage sites, she shared how the city’s well-educated and relatively affluent local population is invested in the sustainability of their purchases.
She shared how Matro Group continues to adapt and evolve in the Chinese market to remain innovative. Part of this adaptation was the establishment of the company’s app, Boundless Matro, which supports international brands with cross-border e-commerce. Liu described how Matro’s strong reputation ‘rubs off’ on brands featured on its app, winning trust amongst Chinese consumers, and how the company is also making strides to “develop and incorporate VR technology to present the authenticity of brands”.
Liu also stressed the importance of brands “thinking globally, acting locally,” and considering future trends and what consumers need, with experience-oriented consumption being a key trend for the future.
David Hampstead, CEO and Co-Founder of Samarkand Group, stated that Scottish brands need to find a partner that matches their appetite for the Chinese market, not one that will push brands too hard to enter and expand in-market.
He stated that it is useful to look at the brands that your selected partner works with to see if they will be a good fit for you. Having a strategy based on any one platform is risky as channels change and grow constantly, so having a multi-channel strategy is key. He also noted that, for Scottish brands, it would be a benefit to find a partner that understands Scotland and can help to champion Scottish identity. It can also be good to work with multiple partners to address multiple needs in the Chinese market. However this presents a challenge when it comes to ensuring harmony amongst partners and stable pricing.
Hampstead noted that “Chinese consumers are a very astute consumer group” and pointed to the importance of the rise of consumer nationalism. “National brands are growing in popularity,” he cautioned. “Fifty percent of beauty brands are now Chinese brands in China, and Chinese brands can react much quicker to local social media trends.”
Hampstead also echoed Dunne’s point that investment in social commerce is vital to success in China, with Xiaohongshu being key to the market as it is a first point of contact and research for Chinese consumers interested in your brand.
With the conclusion of the second panel session, the audience had the chance to pose questions to all of the speakers, addressing issues such as budgeting, how best to work with partners, brand visibility and case studies such as that of Tangle Teezer, which achieved success in China via organic online endorsements via KOLs.
After the panel sessions finished, the audience enjoyed two deep dive presentations: ‘Cracking the Chinese market: Proven tips for new and seasoned exporters’, delivered by Woodburn Accountants & Advisors’ Head of Business Advisory, Kristina Koehler-Coluccia, and ‘Unlocking China’s digital frontier: Navigating trends, influencers, and e-commerce triumphs’, delivered by Bark Media’s Managing Partner, Dora Zhou.
Following a light lunch and networking, Scottish consumer brands in attendance took part in CBBC’s Meet the China Buyer and Meet the China Expert sessions, with opportunities to meet buyers and panellists one-on-one to collect further insights, establish partnerships and receive individualised advice and recommendations.
If you have any consumer enquiries, please don’t hesitate to contact antoaneta.becker@cbbc.org or celine.tang@cbbc.org and we would be happy to assist you.
