China marketing strategies that domestic brands do better than foreign brands

Five China market strategies that domestic brands do better than foreign brands

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Foreign brands have enjoyed positive reputations in the Chinese market for years, but as China shifts to a consumption-driven economy, domestic brands are uncovering their home-field advantage. As the nation’s digital ecosystem becomes increasingly more complex and further diverges from what’s familiar to the west, Chinese companies are better able to navigate the digital world to which they are native. On top of the booming digital world, is the development of the Chinese consumer identity, led by Gen Z who find inspiration from within national borders and not from outside. Home-grown brands are built around this new consumer identity, whereas foreign brands are built for other consumers and adapted to Chinese consumers. Below are five China market strategies that domestic brands do better than foreign brands.

Tapping into the cute or “meng” culture (萌文化)

Meng (萌) is a Chinese way of saying “cute”. Also with roots in Japan, the country where even busses are cute, meng is often personified through cartoon characters. Nowadays, more and more Chinese brands are producing cute characters – think of the e-commerce platform Tmall’s cat, the streaming platform BiliBili’s TV face logo, and the travel app Fliggy’s pig – cute brand mascots are not just for children. 

Tmall, Bilibili and Fliggy, all have meng aspects
China market strategies

Logos of Tmall, Bilibili and Fliggy, all have meng aspects

What is unique about many East Asian countries is that marketing with cute cartoon characters isn’t meant to only target children. This is why many Asian brands, especially in the food and beverage industry, create cute characters to represent their brand image to target those born in the 90’s and even the 80’s.

A recent display of meng culture in China was during 2020’s Double 11 shopping festival, where Taobao launched a cat-raising game. In the game, consumers got a virtual cat and fed it “Meow Coins”. Consumers obtained more of the previous meow coins by viewing store pages. On the game’s launch day of October 21st, it had already reached more than 100 million active users.

Taobao’s 2020 Double 11 cat game went viral among all age groups
China market strategies

Source: Taobao, Taobao’s 2020 Double 11 cat game went viral among all age groups

However, western brands in China have yet to jump on the meng bandwagon. This isn’t to say that western brands have not benefited from Chinese meng culture, every year many western cartoons which originally targeted children co-brand with clothing brands like Uniqlo. However, brands could be more active in creating “meng” characters and logos with Chinese young adult consumers in mind.

Catering packaging to the digital world

Any restaurant, luxury clothing brand or jeweler hopes to be ‘instagrammable’, and caters their décor and products to capture the attention of cameras. However, in China, this trend extends to product packaging. Many Chinese brands that have arisen in the past few years have the social media economy in mind, not just as a marketing after-thought, but in the product and packaging design.

One shining example of this is the Chinese instant coffee brand Saturnbird. The brand sells instant coffee packaged in little coffee cups. Each cup contains one serving of instant coffee, is one solid color and has a large number indicating the blend. Because these little cups were so instagrammable, a flurry of Key Opinion Consumers (KOCs) share the product on their social media. As a result, aturnbird bypasses the idea of hiring Key Opinion Leaders (KOLs), which are more expensive and perceived as less authentic than KOCs. 

Saturnbird’s official Instagram (screenshots), the packaging is made to be social media friendly, and fun to share. China market strategies

Source: Saturnbird’s official Instagram (screenshots), social media friendly packaging encourages consumers to share.

Saturnbird is not the only Chinese brand that has the digital ecosystem in mind early on in development. Despite being a soft drink brand often purchased in convenience stores, Genki Forest earned the name “internet brand” due to its heavy show sponsorship and KOL marketing strategies. The offline coffee brand Luckin Coffee’s entire business model was created for the digital world, order on the phone (whether take-out or delivery), get discounts on the app.

The lesson here is not just to make packaging photo-genic, but to think of the digital world in every step of product design, package design, business model, and of course, product promotion.

Getting the most out of WeChat

Chinese brands have been on-top of their WeChat marketing strategies. Domestic brands were some of the first to penetrate the mini-program ecosystem, and now they are leveraging the all-in-one app in a more integrated way. One example is the Chinese beauty brand Perfect Diary, which has a multi-step WeChat strategy. First, the brand funnels both offline and e-commerce traffic to WeChat, where consumers befriend a virtual KOC, the KOC then invites them to a WeChat group, from which they are sent special deals. From there, they can join the brand’s Mini-program buy exclusive products.

WeChat has so much to offer, in addition to the features mentioned above, WeChat also provides the space for gamification, customization, and so much more. Many foreign brands are just scratching the surface of WeChat’s potential. However, KFC is one exception; the American fast-food brand has launched games and interactive coffee discount programs on WeChat.

Complementing their KOL strategy with KOCs

KOL or Key Opinion Leader has been considered a “must-have” for China marketing strategies. However, KOCs just may get brands more bang for their buck, but foreign brands have not fully tapped into this resource. For starters, KOLs are large-scale influencers, their wide-spread influence can be purchased for a hefty price. In contrast, KOCs are consumers themselves, often don’t need payments to promote a product, and naturally promote products they actually like.

Brands like Saturnbird mentioned above are tapping into China’s massive pool of KOCs just by creating shareable products. But some brands are making their employees into KOCs, such as the clothing brand Peacebird. Peacebird launched the APP “Niaoda” (鸟嗒) to encourage employees and users to share their daily outfits to further cultivate and explore potential KOCs.

Xiaohongshu and Douyin are hot-spots for KOC marketing. Douyin’s algorithms continuously bring catered content to users, the app feeds strongly into niche groups and consumer tribes, which is where KOCs thrive.

One tribe in particular that demands KOCs are “skintellectuals”, or ingredient-oriented skincare consumers. These consumers have a high standard of authenticity in their information sources and thoroughly research skincare online. Both these factors make KOC marketing a crucial strategy to reach these consumers. HomeFacial Pro, a Chinese ingredient-oriented cosmetics brand perfectly targets Chinese skintellectuals thanks to their Xiaohongshu KOC strategy.

Riding the Guochao (国潮)

Guochao is a term meaning ‘national wave’ which describes the trend lead by Gen-Z making traditional Chinese elements fashionable. Guochao not only means consuming domestic brands, but any brand that shows consideration and understanding of traditional Chinese culture. Every Chinese new year, brands take their turn at incorporating Chinese culture into their product design, packaging and marketing campaigns, but what’s different now is that the demand to include cultural elements is year-round.

Leading brands in the Guochao trend are Li-Ning, which has revitalized itself through positioning itself as a national sports brand, and Florasis which incorporates elegant traditional design into their make-up.  

It goes without saying that Chinese brands are better at using Chinese culture as a marketing point. However, this trend doesn’t completely exclude foreign brands. In March 2021, Nestle launched a new Cantonese culture-inspired ice cream brand Yue Xinyi (粤新意) the three new flavor of lychee rice wine osmanthus which symbolizes a “drunk concubine”.

 the lychee rice wine Osmanthus flavor crispy fish shaped ice cream bar China market strategies

Source: Nestle press release, the lychee rice wine Osmanthus flavor crispy fish shaped ice cream bar

What foreign brands can learn from Chinese brand’s marketing strategies?

It is all too easy for foreign brands to copy and paste their domestic market strategy into new markets. But this won’t work in China for the two simple reasons of the nation’s unparalleled digital ecosystem and the unique consumer identity. Therefore, foreign brands need to China market research, which includes studying local brands’ market strategies.

Here’s what we can learn from domestic brand’s China market strategies:

  • Chinese consumers of all ages embrace cuteness. Whether through collaborations, or creating a cute logo or a cute product for the local market, there are many ways to do meng marketing.
  • Keep the digital world in mind during all steps of product creation. The word of Chinese consumers expands into the digital world. Even a physical product like coffee manages to earn the name ‘tech-company’.
  • Get the most out of WeChat, from official accounts to mini-programs to WeChat stores, learn more about WeChat marketing here.
  • Consider leveraging KOCs! After all, they are cheapeer and considered more authentic than KOLs.
  • Guochao is in. Find how your products can embrace local Chinese culture, in addition to design, think of traditional Chinese flavors, scents, and symbols.

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