Despite being recognised for the rapid development of its economy and the global spending power of its consumers, the global perception of Chinese domestic brands has remained largely old fashioned and reductive, a perception that’s been exacerbated by the recent trade and tech wars with the US.
However, while the overall perception of Chinese brands has indeed seen improvements in recent years, COVID-19 has radically accelerated this shift.
For instance, whilst most brands outside of China have been on the back-foot trying to implement the processes and frameworks needed to serve the practical and emotive needs of shoppers living through a global crisis, Chinese brands re-wrote the playbook on how to reach, delight and build loyalty with consumers in the challenging new normal. In turn, they showed an unprecedented willingness to learn, listen, share and interact with them in ways which would be seen as ‘risky’ elsewhere. They were swift to rally, drawing on their under-recognised, deep-rooted and competitively-enforced culture of innovation, digital-embeddedness and customer-centricity to turn the challenge of COVID into an opportunity.
Here are some of the distinctive values and approaches we saw in Chinese brands' response to the pandemic, which are now coming to define them post-COVID.
Sustained innovation
With their understanding of the importance of significant R&D investment, Chinese companies are designing world class products which are propelling their sectors, led and defined by the wants and needs of globally informed purchasers. Companies such as Geely, Haier (household appliances), Huawei and Yili (milk products) have a strong reputation for product R&D.
The same spirit of innovation is pervading into brands investing in service platforms and customer insight tools. Through innovations in so called ‘Uni-Marketing’, which combines ‘Big Data’ analysis with integrated marketing strategies, brands have the ability to provide personalised services and experiences for their customers through the leading technology platforms they work with (typically from Tencent, Alibaba and JD). Brands like media platforms Toutiao and iQiyi are leveraging these insights to understand the changing needs of consumers, designing products, experiences and narratives to fit their needs.
Investments into such insight driven technologies are seen as key to success in China and leaders of brands of all sizes understand the need to focus their resources, however tight, into these valuable services.
Innate flexibility
With innate prowess and understanding of the importance and value of digital, Chinese companies and brands are integrating into consumers’ lives through numerous, frequently changing, touch-points. The ‘smart’ or connected store initiatives pioneered by Alibaba and JD.com provide relatively simple solutions to offer consumers seamless interactions with brands, whether on-or-offline. Innovative consumer companies such as Bonnie & Clyde (a beauty and cosmetics retailer) are leveraging in-store experience to capture customers through their brand ‘heartland’, with subsequent purchases and interactions happening online.
Similarly to their investments into R&D and data technologies, successful Chinese brands put investment into digital transformation at the heart of their user engagement and brand experience strategy, which is paying off in the post-COVID environment.
Cultural understanding
With extraordinarily selective purchasing pressures from key local, globally influential and informed demographics, particularly Gen Z who are vocal in their feedback to brands and responsible for a significant proportion of domestic spending, Chinese companies have learnt to listen to their customers and iterate their products, services and even philosophies in line with the sentiments they receive back.
Local brands such as NEIWAI, a leading Chinese lingerie brand whose name translates as ‘Inside and Outside’, through its message of body positivity reflects the new priorities of the powerful Gen Z community. By listening to these demographics and designing products with their input, NEIWAI has swiftly expanded from start-up to national brand and is embarking on its internationalisation plans through its global online flagship and store-openings in the US.
Willingness to adapt
Chinese brands show a readiness to do whatever it takes to improve – throughout the pandemic, brands with no previous experience swiftly learnt how to interact with customers through the numerous platforms in the consumer ecosystem – whether livestreaming sales promotions with the brand executives, turning store staff into digital personal shoppers or participating in group-buying exercises, successful brand leadership was flexible, innovative and not set in ways of thinking. Recent ‘blockbuster’ livestreaming shows for instance from Gree, China’s largest air-conditioning manufacturer, saw US$1.5 billion worth of appliances sold by the company’s chairwoman during her broadcasts in June.
Notably, brands which were reliant on the pervasive infrastructure and reach of the country’s key ecommerce platforms have started to push their interactions with customers towards their own proprietary networks, showing a willingness to provide a unique experience and interact with customers without the hand-holding of the leading platforms.
The willingness of Chinese Brands to focus on unconventional thinking and their general cultural and work-place dynamism was highlighted in the FutureBrand Index 2020 – a global perception study of the world’s top 100 brands. Chinese brands focused on consumer products did particularly well in these areas, such as Kweichow Moutai, the world’s largest distiller, which ranked 5th in the list.
Committing to ‘purpose'
The key brand lesson which came out of China’s COVID experience was that people valued the contribution that brands and companies made to the group common good, whether that was helping society generally, as with large infrastructure and delivery services that kept society fed during lock-down and supported front line staff, or in quieter individual ways whereby brands could extend their usual services into the home. This has led to an increasing preference, particularly with the younger generations, for local brands which can be seen to reflect their values and share their priorities, such as Li-Ning, the leading sportwear brand which has brought together Western silhouettes, streetwear inspirations and local flavour, reflecting the best of innovation and identity.
By utilising these principles, whether through instinct or by emulating what is working for others, successful Chinese brands have not only survived but gained share, in some cases usurping the position of the Western brands they were once said to be inferior to. Whether seeing the Chinese market as a key sales geography, testing ground or source of inspiration, understanding the tactics, value systems and fundamentals that is driving the success of Chinese brands, will benefit international brands wherever their focus is.
This article originally appeared in Business Chief APAC.
