How to do Guochao marketing: In-depth interviews with Chinese gen Z

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What is Guochao marketing

“GUO CHAO” (literally “national trend”) refers to the increase consumer favoritism towards Chinese brands, designs and culture. Guochao consumers embrace Chinese cultural designs and products made in China. 75% of Chinese consumers surveyed state they like products that incorporate Guochao design elements. To learn more about Guochao marketing, we conducted in-depth interviews with Chinese gen z consumers. The downloadable report below contains our findings, along with Guochao marketing case studies.

Chinese colors and elements

Based on our in-depth interviews with Chinese gen-z consumers, we found that Guochao doesn’t just mean “made in China” but embracing traditional Chinese elements and inciting national pride. Below are some color palate examples and elements that are often incorporated in Guochao marketing campaigns.

Source: daxue consulting, Guochao marketing report 2021, Chinese traditional elements

Guochao brands use a wide range of vivid colors such as gold, red, brown, purple and white. Chinese traditional cultural elements such as cranes, landscape paintings and phoenixes are used in the design.

Guochao trends: how foreign and old Chinese brands embrace traditional elements

Guochao trend 1: Chinese consumers increasingly prefer domestic brands

Aside from elements that are clearly related to Chinese culture, domestic brands in general are benefiting from improved reputations. Chinese Gen-Z now don’t consider the quality or appearance of domestic products to be inferior to foreign products. As Chinese brands have made significant progress in improving innovation, quality and technology, foreign brands can no longer rely on foreign allure to earn attention in China’s market.

From a greater perspective, the increasing tension between the US and China has caused stronger domestic consumption because of the strengthened patriotism. A study by Nielsen in 2019 shows that almost 70% of Chinese consumer prefer domestic brands.

Data Source: daxue consulting, Guochao marketing report 2021, Growth rate of Guochao products on Xiaohongshu

The E-commerce platforms in China have made domestic brands’ penetration much more efficient because of the more interactive technology between sellers and buyers and the increased user stickiness. According to the China Internet Network Information Centre, online user penetration jumped to almost 79% in March 2020.

Guochao trend 2: Foreign products are increasingly including Chinese elements

Successful adaptation of Guochao marketing avoids cultural faux pas and captures attention, adapting to include Chinese cultural elements is increasingly becoming a necessity

Why foreign brands embrace Chinese elements

International brands are becoming more “China savvy” because the national purchasing power is increasing, and is overtaking the West as the biggest market for luxury goods in the world. By collaborating with local creators and using local elements, foreign brands are able to perfectly capture the modern Chinese zeitgeist and avoid cultural blunders.

Burberry: New Year’s Eve Series

 Source: Burberry, Chinese New Year campaign 2021

Burberry’s 2021 New Year collection features a plaid element. The creative baseball cap is decorated with fun and vibrant horns to celebrate the auspiciousness of the Year of the Ox and bring personal creativity to the everyday outfit.

Adidas: New-Year Series for the Year of the Ox

Adidas has integrated fish, bulls, pixiu (貔貅), peacocks, unicorns and other patterns into its product design, launching the New Year series for the Year of the Ox. In terms of marketing, Adidas invited many celebrities to create New-Year short films and New-year wish posters to get attention and realize short-term sales growth.

Guochao trend 3: Old Chinese brands use Guochao to revitalize themselves 

Chinese consumers are turning away from foreign brands, giving older ‘forgotten’ domestic brands a second-life. For example, sportswear brand Li-Ning released new series at Paris Fashion Week in 2018, which opened the first year of “National Tide” and became the benchmark brand of Guochao.

Source: Li-Ning, Paris Fashion Week 2018

Another example is Forbidden City Wenchuang (文创), an old Chinese stationary brand, launched its first makeup and sold out in a short period of time.

The main Guochao cosmetics consumers are Gen Z who live in lower-tier cities

Data Source: Tmall, daxue consulting, Guochao marketing report 2021, Tmall domestic brand consumption

With the low-tier city consumer base being the largest and have faster increasing consumption growth, they are a cradle for the Guochao trend. For instance, domestic brand cosmetics consumption is highest in lower tier cities.

Consumers in first and second tier cities have a relatively high unit price, and online consumption contributes nearly half of the total consumption, which makes top tier cities still the core main force as of now. Gen-Z is the main force of Guochao, with the trend reaching 80% of gen-Z consumers

In-depth interviews with Chinese Gen-Z

Guochao brands have gained great reputation and market share by relying on the advantages of lower price, practical and competitive quality, but have also suffered from the perception of being “imitation”.  To examine the perception of Guochao, daxue consulting recorded 10-minute long in-person or phone interviews with Chinese born between 1995 and 2001 on the topic of Guochao trend. The average age of participants is 21.8 years old. The gender distribution is 37% male and 63% female.

Data Source: daxue consulting, Guochao marketing report 2021, what Guochao means to Chinese Gen-Z

Apparel and beauty brands are the keystones of “guochao”

Guochao brands that are already well-established in both Chinese and international markets. They include apparel and beauty brands as the keystones. New energy cars are increasingly a source of national pride. The rise of Xiaopeng and Weilai will give Chinese consumers more local and affordable choices.

Apparel or cosmetics were the types of brands which respondents bought the most among the Guochao brands. However, over half of interviewees reported that they have not bought any “Guochao” brands.

As for electronics, many interviewees expressed strong preferences for both foreign and domestic products. Foreign brands are top-of-mind in the luxury segment.

Brands that incite national pride

Brands that incite national pride are either brands with a long Chinese history, or innovative strategies. However, many interviewees stressed the importance of national artifacts.

Perfect Diary, whose marketing approach is very much in line with Chinese consumers, Is the right example of a perfect strategy in China. Many European and American makeup brands ignore the direct contact with Chinese consumers, while Perfect Diary is always close to their customers.

What foreign brands have successfully incorporate Guochao elements?

Among foreign brands which successfully incorporated Guochao elements was Balenciaga. It adopted Chinese characters in the design of their bags, in celebration of Valentine’s Day. In addition, every Spring Festival, Gucci brings out apparel products with zodiac elements. Sportswear brands like Adidas and Nike launch Chinese New Years limited edition products every year.

Is country of origin important for the Chinese consumers?

One third of participants use country of origin to evaluate quality and authenticity, while a majority do not check a products country of origin.

32% Yes

“Sometimes the place of manufacturing determines the authenticity of products”

“Country of manufacturing indicates the brand awareness and its quality”

68% No

“I care more about the design, price and reputation”

“I only buy brands I am familiar with, so country of manufacturing doesn’t matter that much”

“Online customer reviews are more important than where it is manufactured”

In what aspects Chinese brands are better than foreign brands?

Data Source: daxue consulting, Guochao marketing report 2021, For which products Chinese consumers prefer to buy domestic brands?

Interviewees said Guochao brands are attractive because of lower price, better capture of consumer demand and convenient purchasing channels. Since many foreign products are also made in China, domestic products are not necessarily inferior to foreign ones. Yet, the price for domestic products is lower. Domestic products can better capture the demand of Chinese consumers and are more in line with the Chinese culture and trends compared to foreign ones.

What foreign brands misunderstand about Chinese consumers?

Many Chinese Gen Z feel foreign brands understanding of Chinese culture is surface-level. These elements are used for pure promotional purpose. When a brand misuses Chinese cultural elements or has offensive content in promotion materials, it would be difficult for the brand to survive in the Chinese market, let alone gaining more market share. 

What would be the future evolution for Guochao marketing?

Most survey participants have an optimistic prediction of the future of Guochao, believing it will become more and more popular. However, some people also raised suggestions and concerns, such as Guochao brands’ challenges in developing in foreign markets such as increasing consumer acceptance and gaining market share, the lack of innovation and quality issues. 

See our full Guochao marketing report below

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