Mark Tanner

New Pricing Model Trends in China

2017/05/10 Mark Tanner
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Years ago, China’s sprawling network of street-noodle vendors began utilising the curious new commerce features of an app called WeChat. A willingness to embrace change signifies the innovative spirit that pulses through modern China. From those polystyrene bowls of late-night fry up all the way to billion-dollar-plus bike loan schemes a now near necessity in the lives of many Chinese, there is no shortage of inspiring innovation coming from the Middle Kingdom.

China’s rich history spans 5,000 years. Yet few periods have seen the velocity at which China has evolved as these 4 decades past. In a little over a generation Chinese consumers have seen mass urban migration, internationalisation, globalisation, a fast-track to modernity, the effects of a one child policy and steady episodes of cultural upheaval and redirection. Moulded by constant flux, the resultant consumer class is not only unfazed by change but expects and embraces it.

WeChat payment is one example. The seamless purchase of goods, services and content that can be integrated almost anywhere online and offline has opened the door for infinite new ways to buy and consume things. Similarly, live streamingvirtual reality and augmented reality from innovators like Alibaba has merged with ecommerce.

Yet innovation in China spans far beyond the well-known smartphone apps and ecommerce platforms. China Skinny is seeing it across every piece of the marketing mix. From packaging to pricing models, brands are localising best practice from overseas, and some even innovating in a way that is native to China.

One of the more interesting pricing models is subscription-based. Whilst we are yet to see any game changers like the Dollar Shave Club, burgeoning niches are constantly developing.  Each initiative helps lock in consumers who are well known for their promiscuity.

Chinese consumers find subscription models attractive for a number of reasons. Van Diemen’s Land’s subscription to fly in fresh milk from Tasmania ensures a stable supply of healthy, tasty, fresh milk for those families aware of the benefits of drinking it. Another interesting initiative is the Drinking Buddies scheme which sends members a box of six different craft beers every month and offers access to tastings and workshops. It appeals to craft beer drinkers as they can try niche beers that they may not have been able to get elsewhere – something that China’s craft beer enthusiasts crave. It’s a great low-cost way for the brand to get in front of grassroots influencers who will gain social credit from sharing new undiscovered beers among their beer drinking friends.

There are obviously plenty more innovative and cost effective ways to reach and appeal to Chinese consumers beyond the traditional distributor model. Agencies like China Skinny can assist in developing such plans.

On the subject of milk, beer and food & beverage in general, China Skinny’s Mark Tanner will be joining a host of excellent speakers from the industry to speak about food and beverage trends in China at AmCham’s Future of Food Conference on Wednesday 24 MayMore information here. Go to Page 2 to see this week’s China news and highlights.

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