China Focus: When the CMOs are gone – marketing is done in another way with Chinese consumers
Updated: Aug 31, 2019
Here are some facts:
l Starting from 2 years ago, the global conglomerates, including Coca Cola, Johnson & Johnson, Suntory, Uber, Lyft, Taco Bell, and McDonald’s, removed the position of Chief Marketing Officer (“CMO”).
l Just last week, several luxury brands met their Waterloo in the Chinese market for “disrespecting the One-China policy”. Celebrities terminated endorsement contracts with them; products were taken down; and public apologies were in order.
Liu Wen, Jackson Yee and Yang Mi.
Courtesy Photo/ Rex
Obviously it is crucial to understand the culture and demographics of China before forming any marketing campaigns for the local market.
There is hardly a quick answer to the key question, “how to win the hearts of Chinese consumers?” However, let’s take a look at some insights.
1. Who is the Chinese spending class?
It is statistically proven that China has the greatest potential in the global luxury industry. McKinsey’s 2019 China Luxury Report indicates that 61% of the buyers are born in the “80s” and “90s”. Their total expenditure in 2018 alone was approximately US$77 billion.
2. What does the market demand?
Thanks to the revolutionary ABC technology (A: Artificial Intelligence, B: Big Data, C:Cloud), China has entered the e-Commerce arena with a strong sense of awareness among its consumers. When the choices are overwhelming, the spending class nowadays seek for distinction – they despise mass production but long for uniqueness. The McKinsey report indicates that comparing with the “65s” and “70s”, the young “90s” are more focused on design, texture and production method when choosing luxury goods.
“Niche brand” has become one of the most popular hashtags on the “Chinese Instagram”, Little Red Book
3. How does personalization work?
One way that has been proven useful is via social network platform such as WeChat and Little Red Book, on which, consumers’ true preferences are willingly revealed and more importantly, the purchasing decisions are greatly influenced by Key Opinion Leaders (“KOL”) and Key Opinion Consumers (“KOC”). Not only that people tend to trust others they feel related to, but contributing to the product design process would create a sense of belonging and fulfillment.
Different from the traditional e-Commerce model, which relies on traffic, word-of-mouth (WOM) not only helps build up brand names but maintains a stable group of loyal followers. Not surprisingly, Chinese consumers are more likely to make a purchase when they browse fashion goods on WeChat Moment from “Daigou”, instead of established online marketplaces. This is because they find “Daigou”’s content more authentic and intimate compared with highly commercial online ads.
4. What does influencer marketing entail?
Effectively, influencer marketing depends on fans’ endorsement. The young Chinese generations expect figures of “a better me”.
The KOLs and KOCs may be different when it comes to self representations in fashion, lifestyle, excise, learning etc., but they have one thing in common, which is that they constantly promote their lifestyle, unique taste and stories of their lives. Only by successfully advocating their lifestyle and personas, can they win their followers’ hearts and keep receiving endorsement opportunities.
Taking Zhang Dayi (first-generation KOL on Taobao, who has now around 11.3m followers on Weibo and a NASDQ listed company called Ruhan) for example. On November 11, 2016 (China shopping festival), it was reported that her online store was the first to reach RMB100m on sales. However, what you may not know is that till February 2017, Zhang Dayi had posted over 10 thousand blogs and responded to countless comments. This is what makes her one of the “leaders” of public opinions.
Currently, Ruhan's top three influencers are Zhang Dayi (Weibo: 6.4M fans. Taobao store: 8.14 M fans), Da Jin (Weibo: 2.63M fans. Taobao store: 2.86M fans), and Aunt Guan (Weibo:
2.02M fans. Taobao store: 1.19M fans).
INFOGRAPHIC CREATED BY Lauren Hallanan
5. What else?
While the new model of e-commerce entrenches specialized social network, it can help to predict fans’ response on new products, and hence facilitates a rather accurate management on production, timing and inventory.
However, product personalization only works well with the support of a flexible supply chain structure. Research indicates that from collecting order to actual delivery, the common expectation of Chinese consumers is only 7 to 10 days, which means the production lines are best to be near to the consumers. We are confident to say that China is leading in logistics.
As the saying goes “whoever gets the China market, gets the world.” This is also the best timing for your brand to enter China, as long as you do it right.
If you want to know more about E-Commerce Solution | Social Network Marketing | Influencer Marketing | Logistics to China, don’t hesitate to Contact HOOLU or mail to firstname.lastname@example.org.