Nadja Rauscher

The 3 Biggest Challenges for Foreign Brands in China

2017/04/17 Nadja Rauscher
The allure of its enormous 1.4 billion population and rising affluence has seen China become one of the world’s most attractive markets, but also its most competitive. Many international brands have struggled to gain a presence and generate sales. Foreign marketers often battle with understanding the intricacies of the China market, leading to initiatives being irrelevant or even inappropriate for Chinese consumers. Getting the basics right is crucial as the following three challenges reflect:

1. China is Crowded and Competitive

China is already the most crowded market on the planet, and becoming more-so by the day.  New international brands continue to enter the space, while local players are becoming more astute at adapting to trends and consumer preferences. With 500 products launching daily in China, it has become clear that brands will struggle to make an impact without a meaningful budget. This is especially true for the digital space such as WeChat, where 14 million official accounts tout for Chinese consumers’ attention. Getting noticed is difficult and resonating with the target market even more so, as only 5% of WeChat users view subscription accounts. Brands with a limited budget have to be smart and employ creative initiatives to stand out.

2. China is Different

Just as Chinese consumers have different motivations and tastes than their western peers, they use different platforms to research and endorse them.  Facebook, Google, Instagram, Pinterest, Twitter and Youtube are all blocked in China. The resulting ecosystem of channels Chinese consumers are familiar with can often become confusing for foreign marketers. QQ, Weibo, WeChat, Baidu, Taobao, Tmall, JD are the best-known, but along with these come thousands of channels that might be more appropriate for a brand chasing a specific category or demographic. While the big players boast mouthwatering user statistics, smaller niche platforms can cater to a more targeted customer segment. The channels utilised by a wine brand will therefore differ greatly from those for fashion, cosmetics or mom & baby.

3. Chinese Consumers are Discerning

Various food and product scandals have led Chinese consumers to become some of the least trusting of product authenticity until the opposite is proven. They conduct much more research around a new product or brand, employing an average of 7-10 touch points from official online channels to offline influences like friends or family. With personal opinions being the most-trusted source of information, 70% of Chinese shoppers leave reviews online after purchasing a good. These not only include a product’s quality, but the whole consumer experience from responsiveness to logistics, purchasing process, packaging, safety, speed of delivery, after-sales service and more. Fulfilling this criteria effectively can be challenging for foreign brands, particularly as  local competitors have the advantage of being closer to their target market and are therefore able to relate better to their needs and preferences.

However, many foreign brands have adapted smart methods to cater to Chinese consumers, undertaking considered efforts to understand their target market and China’s fascinating and unique characteristics. Smaller brands can even gain a substantial consumer base once an appealing brand strategy is developed.

Are you interested in China and selling to Chinese consumers but don’t know where to start? China Skinny has created a brand new free five-day mini course focused on selling in China and Chinese consumers.

For five-days we’ll break down the China market including:
1. Opportunities in China
2. The various ways to sell in China
3. Chinese consumer segments
4. How to get your product right in China
5. Commonly overlooked aspects of working in China

Get knowledgeable about China! Sign up below for China Skinny’s five-day mini course:
 
Your details are safe with us. Privacy Policy.