For any brand competing in the Chinese market, the rise of Chinese brands both in China and globally is undeniable. While trends like Guochao (国潮) drive consumers to purchase local brands for the sake of cultural pride, domestic brands are simultaneously increasing their R&D investment, raising the product quality to compete with, and in some cases, surpass the quality of foreign brands.
This leads to two strategic questions for foreign brands: how to adapt to compete with domestic brands in China, and how to plan for the expansion of Chinese companies into their home countries. This report answers these questions and exposes the true drivers of the rising domestic brand consumption (hint: it’s not just Guochao).
Download the report on the rise of Chinese companies here:
How foreign enterprises should adapt their strategy during the rise of Chinese enterprises
Re-evaluate the value proposition in China. Simply being a foreign brand does not bring much value. When targeting more practical consumers, the value proposition also must be down-to-earth and easily understood. For example, rather than the prestige of the logo, it is the quality of the product.
Leverage your own brand story and authenticity. In the age of AI when consumers are constantly bombarded with fake images, a brand with depth and story is a breath of fresh air. Foreign brands need to leverage their brand narrative, not just product specs. Domestic brands often win on speed and price, so foreign brands need to stand out by leveraging their heritage, global perspective, and unique brand values.
Uncover pockets of growth, and align with them. While consumer confidence is down, it’s not evenly impacting all industries. For example, the wellness category is still thriving, people are spending more on experiences, and the new silver generation is more willing to spend than the previous one.
Match the agility of locals. The Chinese market requires constant testing of new opportunities, such as new platforms, products, and tech. The “wait and see” approach is a death sentence.
Go beyond social media to social commerce. Domestic brands thrive on platforms like Douyin and Xiaohongshu, where content directly drives sales. Foreign brands must master this ecosystem by creating platform-native content and partnering with mid-tier and micro-influencers who have authentic, engaged followings.
