Branding in China
In China, branding has changed greatly in the last few years – demands from digital marketing are multiplying, products are being purchased via social media and with this digital transformation, more local brands have growing chances of survival. We talked with Peggy Chen, Managing Director Process Shanghai, about the differences in brand management in China.
Yes and no. From the agency point of view, in China we have more time pressure when setting up the brand together with our clients, as the market requires a very quick response to various business opportunities. In Europe, clients might think further ahead, and always wish to ensure that every step is properly planned, which means that the whole process of setting up a brand takes longer. The general situation is affected by the great differences in cultural and commercial background. Also, in my experience, in Asia greater diversity may be preferred to consistency. In terms of visual impact, this generally means that the visual identity of European brands is more muted, whereas Chinese brands are more visually striking. Consumer habits also play a role here. For example, consumers in China are generally very active in trying new brands and new products. This adds to the diversity of brands developed in China. In Europe, many brands have products that are classic and timeless. They are still very welcome in the market, and enjoy great loyalty.
However, entrepreneurs’ aims, and their spirit, are mostly the same across borders. Successful entrepreneurs are always willing to devote themselves to building a brand from zero in pursuit of a grand vision.
What makes the best brands in China so inspirational? What are they doing right?
I have to say that the culture is quite different in China. Though there is no lack of articles about the increasing economic slow-down in China, there are still many possibilities for young people here. Even the slower growth rate is far better than the situation in most other countries. So this business environment still provides a very good platform for developing new brands. There are many outstanding young people who start from nothing and become very successful in a few years. Even if the market becomes increasingly tough, it will not stop determined young people who have no fear of failure. I remember talking with a very young woman manager about how she set up her first shop. She said: «I tried my best to copy everything I could learn from the competitors. And I am doing a good job. Even if this is not the perfect starting point, I know that when I have learnt more I will be better still». Even if this is not the ideal strategy, it shows a strong drive for success on the part of the young generation.
Such entrepreneurs bring a similar spirit to both the business and operations. In the Chinese market brands have great diversity. They react quickly to the market by delivering new products ever more quickly and adapt to most themes with high-speed marketing approaches. Everything seems possible – it’s this energy that makes this market so interesting and inspiring.
Could you tell me something about recent branding projects and their focus?
We recently worked with some clients who are quite active in the region. For example, one of our clients from the cosmetics industry, Morita, is bringing its outstanding products from Taiwan, with technological support from Japan, and is achieving great success with sales in China. These three different factors – Taiwan for quality control, Japan for innovation, and China for an amazing market – enable a brand to perform optimally. It shows the importance of making good use of varying constellations of resources. Of course, a key to success is ensuring that the brand communicates differently and effectively.
What kind of demands come from digital marketing – especially from social media in China?
The most popular social-media platform in China is WECHAT. It provides various functions from a friends circle to an online digital wallet. Some brands set up a WECHAT site to make it convenient for Chinese to purchase products and services on line, and it is also a channel for collecting direct feedback from purchasers, who can communicate directly with their service contact. Individuals can also set up their own “microshop” at very low cost, and start doing business online by having direct conversations to set up deals, or negotiate. This changes people’s purchasing/shopping behaviour radically. It is easy to shop on the basis of friends’ recommendations, or promotional campaigns via the WECHAT platform. There are more touch points for a business, and a brand can be communicated faster at very low cost. Many brands can easily conduct online promotional campaigns, and it is also easy for consumers to participate.
So if a brand is not now thinking about digital media or online sales approaches, it might find it difficult to survive in the years ahead. While Western companies are still thinking about whether and how they should use social media for their business, in China using social media is already daily business and business is booming. In China, activity on social media is simply essential.
But surely not every brand in China is using social media?
Not yet. For some industrial brands, it does not seem absolutely necessary to use social media to promote their brand or for successful brand communication. However, one of our clients, EWAI, in the analytical-instruments sector, is being highly successful with social media. They announced their new brand identity via social media, as well as exhibitions they participated in and honours and award they received.
They can contact their customers very efficiently, exclusively and at low cost. In Europe many people might think that using social media is still a very personal matter, and people do not want relationships with brands that only want to sell things all the time. This again might be different cultural thinking. People in China enjoy the way brands participate in the WECHAT platform with such a wide range of activities, like providing news, exhibitions, customer activities, new products, microshops, events, payments and purchasing, campaigns, and many more.
A brand not bothering about digital strategies puts its survival at risk. Is it different for small brands in China?
I would say it does not matter whether it is a big or a small brand.
Even small brands might need to think more about digital strategies, since they are unlikely to have much of a budget for creating a wonderful user experience or installing an impressive window display in their flagship shop at the heart of a big city.
You mentioned that the situation is tougher for foreign brands in China. Why is that?
Economic competition in China is really tough. People are thinking a bit harder before they purchase things like luxury goods. Quality is an important topic – and gradually there are some very high-quality brands in the local market too. Awareness of quality, technology and new designs is growing. We also can feel that people are changing too; the country is not open only globally, but also for good local brands. China is anyway so large that there are always alternatives for different products and brands.
Could you give some examples of foreign brands doing well in China?
One example is the sports brand, Nike. It brings the spirit of its core values to China with its innovative, trendy products, and the well-developed character of its brand. Nike connects with local targets though extensive Chinese-style communication. It researches what young people are thinking, and then adapt its communication on social media. It also provides a link to the world, bringing to China what is happening in the US, for example. Nike’s PR events focus on local topics and internationally actions. In this way, good management plays a key role in transforming the values of the brand for different countries through different approaches, and different ways of understanding.
Is localisation generally a way for foreign brands to stand out in the Chinese market?
Overall, I think localisation is really important, also for foreign brands here. Let me give you an example.
If people are to talk about your brand, they need a brand name they can at least pronounce. From this perspective, the most important thing for an international brand is to have a Chinese name, so that people can use the name in conversation. Even in Shanghai not everyone can speak English. If people can’t pronounce the name, this increases the gap between the customer and the brand. After the name, there are also other factors involved, such as visual identity, lifestyles, communication preferences, shared values, and so on. It is not necessary to be localised 100%, but at least at the level that excites people to try things and discuss them. I would say that the level of localisation depends very much on the brand’s position in the market, as well as the target audience to be communicated to. So the best approach is to involve your local working partners in China, and make the right decision together!
