How does a Brand Position in China?

Brainstorming the Chinese Market

Digital transformation has introduced into the Chinese market a host of services for companies to place their offers to consumers. What are the better areas to focus on marketing efforts? And is it a viable option to enter the Chinese market as a foreign company?

In China, the success of foreign brands is facing a challenge of leveling with a new form of operational competitiveness. Chinese consumers have expectations from recollections of differentiated products to suit a wider scope of lifestyles in variety of circles. Does this mean the competition embodies an ancient civilization acting as a ventriloquist speaking into the current times? Simply said, no, it’s not. For brands, it’s a work in progress.

Opportunities Means Experimenting with Failure

The massive availability of low-wage workers, industries with economies of scale spanning for centuries, and increasing disposable consumer income have all the opportunities for companies to innovate. 

And they have, for example, in the West, the growing electric bike market attracted Chinese companies such as Niu Power. However, even for an international Chinese company with a global strategy and brand activation in foreign markets does not mean it knows the Chinese domestic market. In the past years, Niu Power’s brand reputation took a hit with discovery of executive cooking the books. At the same time, domestic demand drastically decreased for the vehicle who took to vintage luxury branding. Its SQi series has a chic exterior, mobile remote smart technologies, greener and cleaner production, but its subpar speed makes its cost performance lower than an electric bicycle[1]. Strategic positioning is a valuable source of information for brand reputation in a company’s China planning with a long-term perspective.

Balancing Foreignness and Familiarity in Locality

The product consumption of the Chinese market was in the 80s to 90s by the conspicuous association with foreign modernity, fashioned with the representation of a lifestyles in another society. Comparably, in the 2000s and 2010s, foreign brands’ competitiveness in the Chinese market has faded in most due to increased government involvement in regulations, improvement in local product quality, and fading symbolism in foreign products’ representations[2].

The growing sense of nationalism and ethnocentrism may be showcased by popular show such as “This is China” with the host Mr. Zhang in exploring Chinese society, development, and global influence. Of which presents glowing cases of the unique economics behind Chinese efficiency like the delivery services. Platforms are tailored for individuals’ needs, with a remarkable growth to serving over 420 million users by more than seven million full-time delivery workers[3]. The “China speed” has not only been felt by industries from the rapid growth of Chinese development, but microcosmically as well in the modernization of an industry.

Shift Towards Differentiation

The day-to-day strong consciousness in Chinese consumers for tailored products are also synonymous in agricultural products. The power has shifted to delivering products to meet rational expectations on quality and cost performance. Chinese consumers’ refined taste for freshly handpicked agricultural products created a great cycle of creating demand and increasing supply. Opportunities for new innovative agricultural companies to provide e-commerce, supply chain management effectiveness, and online advertising have created many centers or production facilities with standardized performances[4]. Whereas agricultural regional specialization now entered a maturation into differentiated goods like Northeastern Chinese corn with environmental conscious farming methods.

The utilitarian focus that Chinese consumers seeks in agricultural products are consistent in their consumer journey to choosing domestic brands. With the challenge of counterfeits and diminishing foreign representation using the labels “Designed in China”, foreign brands have difficulties in both succumbing to pressures of localization and excelling in differentiation to cater to consumers’ ever evolving taste for modernity.

In short, balancing these two pressures are the combined efforts of enterprise technology and management tenacity. Government support for privatization has seen family-owned business that became state-owned in twentieth centuries’ fifties return to their heirs’ ownership. Take for example three-hundred years old brand Zhang Xiao Quan that took its iconic scissors onto the local Chinese stock market. However, the introduction of new product lines in beauty and hygiene such as pimple poppers and kitchen knives led to a series of customer relationship management issues[5]. Products with strong social status symbols in the mass market can face the devaluation of their brand when competing in a new market. The lack of symbolic value created a strong link to product attributes as well.

Competing Innovation with Chinese Characteristics

Overall, a vanguard brand in the Chinese cheese market Miao Ke Lan Duo have shown to succeed with strong positioning and implement strategies and operations that didn’t stray from its mass market. The change from a cheese market dominated by foreign brands to one by Miao Ke Lan Duo lies in the product quality, research and development, advertising, and sales promotions. Refusal to compete using pricing strategy ensured keeping the lights on. And now, its first stage of establishing a grounded brand image have successfully created more exposure, which led to more positive affect for its reputation[6]. For Chinese leading enterprises, the long-term view to healthy activities is to meet higher expectations from customers with maintaining core advantages. It’s clearly possible to localize a brand’s symbolic meaning in marketing efforts not rooted from culture tradition of cheese consumers.

The norm of cheese consumption localized and dominated by a local company is an example case to factor into consumer cultures. How purchasing foreign products in an interdependent cultured consumer market contributes to competing locally. Unlike the independent cultures presented by the lifestyle from foreign goods nor the normative local collectivist cultures of the predominant sharing economy. Interdependent culture obligates Chinese consumers in certain groups to purchase as a validation to social status and wealth.

A Look at a Successful Representation of Brand Identity

The symbolic meaning is as strong in the luxury brand as is in other brands like Dettol. Traditionally, the English hygiene products brand is known famously for its antiseptic liquid and surface cleaning sprays. In 2020, Dettol experimented with disinfectant in the Chinese market with its eye-opening advertisement that it can kill germs in the washing machine as well as the laundry. Marketing based on the consumer knowledge of Dettol’s hygiene product image, thanks to this the company grew on the point of parity. As well as benefited from the penetration of washer machines in the Chinese household consumption of fast-moving consumer goods, FMCG[7]. Inconspicuous products such as in FMCG have an appeal to households with high income from professional fields.

Recommendation for Business Focus

Marketing communications can continue to sustain the value of foreign brands’ product appeals to Chinese consumers.  Adapting to the Chinese market, localization strategies, and using brand to create a leverage effect on symbolic foreign values and lifestyles must be consistent. Prioritizing delivery of message of brand symbolism leads the brand away from the zero-sum game of pricing competition. Foreign brands should not wear rose-tinted glasses where Chinese local companies will receive more visibility and be market leaders. Stratification of the Chinese society creates opportunities for product differentiation in its functionality and channel for communicating to local consumers the brand’s foreign attributes.

Now, more than ever, businesses must communicate and track their representations with services including search engine marketing, content marketing, data analytics, and social media marketing. Entering the Chinese market takes one step at a time to navigate the complex digital landscape. Services available at Cerberus Marketing feature some of the most fundamental professional marketing a business needs to stay fit in the Chinese market.

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References

[1] van Wyk, Barry. 2022. NIU is China’s ‘Tesla on two wheels,’ but is that what the market wants? https://thechinaproject.com/2022/08/18/niu-is-chinas-tesla-on-two-wheels-but-is-that-what-the-market-wants/

[2] Hui, Michael K.; Zhou, Lianxi. 2002. Symbolic Value of Foreign Products in the People’s Republic of China. Journal of International Market. Vol. 11, No. 2, 2003, pp. 36-58.

[3] Yu, Shi. 2020. This is China: Delivery for literally everything. https://news.cgtn.com/news/2020-05-17/This-is-China-Delivery-for-literally-everything-QyIctlN0Zi/index.html

[4] Chen, Yao. 2022. Differentiation builds brand memory. http://www.cbrand.com.cn/content-21-25556-1.html

[5] Jiang, JingJing. 2022. Zhang Xiaoquan repeatedly cited criticism, what is the problem?https://news.sina.com.cn/c/2022-07-19/doc-imizirav4369900.shtml

[6] Xu, JinZhong. 2021. The president of Miaoke Lando Chai Xiu: The confidence and hard spirit of cheese leading brand. https://cs.com.cn/ssgs/gsxw/202107/t20210721_6186014.html

[7] Li, Ying. 2022. Pay attention to washing machine cleaning Dettol to promote the revolution of washing quality of Chinese clothes. http://life.jrj.com.cn/2022/01/25214434214271.shtml