discounts Chinese consumers

Daxue Talks transcript #21: What do discounts mean for Chinese consumers?

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Find here the Daxue Talks episode 21. Learn from Igor Temirov, an expert in pricing strategies, how to protect your margins while engaging customers with discounts in China.

Full transcript below:

Igor Temirov: Yes, good morning. My name is Igor Temirov. I am an expert in developing foreign markets and for the last 5 years, I’ve been in China helping several companies to enter the Chinese market. 

  1. How can you test discount strategies in China?

Igor Temirov: So there are several methods. Of course, there is AB testing when you are testing in one location versus another location or one city versus another city, but the good thing is China has different online platforms, different offline platforms so you have high-end stores, you have medium-end stores and you have low-end stores. So, this would be pretty singular to other countries, but the good thing in China and I think my colleagues know this; pricing strategy in different regions of China should be and would be pretty much the same because the price level on the shelf is maintained in China quite well which is not the case in many other countries and also the online… I think my key message is that you have to maintain your price level and the most effective way in China is online because when you go to buyers of the biggest chains they immediately take their mobile phone and they take in what are the current prices. So, that’s why it is very important to maintain this level online and this is the biggest influence of online to offline.

2. Can you provide an example of the one to three most powerful discount strategies you have implemented with SPLAT in the Chinese market? How sales per category increased?

Igor Temirov: As I mentioned we managed to analyze the social listening for our category and our brand together with one of our leading market agencies in Shanghai so that we worked with and we identified these two weeks. So, then we prepared a compression; a very well-coordinated campaign and that campaign should always include some social media element which was Wechat. So, we had also a very good selection of the KOL’s which are absolutely key in the Chinese market and a third element; so it should be coordinated with your price discount strategy on your main online platform and main offline channels. So, our sales doubled as well as our spending in this campaign and the most interesting so that again, the after effect of this campaign went through even the 11/11 and Christmas and New Year so by discounting you should always think about the length of the campaign so we should not overkill it with too frequent discounts and too many campaigns. So, I think the most effective in China would be thinking about two annual campaigns which will be like national campaigns and they should be separated for probably 5-6 months from each other and probably 4-5 local or localized campaigns, but you will have the maximum reach of your consumers and the market coverage. 

Any questions? We will find an expert to answer them. Drop your questions in the comments or send us an e-mail at dx@daxueconsulting.com.


Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.

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