Mark Tanner
Mark Tanner
15 May 2019 0 Comments

“After 5,000 years of trials and tribulations, what kind of battle have the Chinese not been through?” asks the anchor on state broadcaster CCTV, referring to the escalating the trade war. The clip received more than 3.3 billion views. “Negotiate— we can! Fight— bring it on! Bully us— YOU WISH!” says the Chinese Communist Party’s official newspaper the People’s Daily.

Following the breakdown of trade negotiations between the US and China in Washington on Friday, and new tariffs on hundreds of billions of dollars of Chinese imports, Chinese propaganda has ramped up. Compared to other geopolitical disputes, China’s state run media had been relatively passive in the 310 days since the trade war began. Yet based on recent state media sentiment, China’s faith in forging an amicable deal appears to be thinning.

Wall Street bankers, American farmers and other US exporters will be deflated following Friday’s breakdown. In addition, many foreign brands in China are likely to feel some impact.

Chinese Brands Day – which coincidently also fell on Friday – was the catalyst for a number of reports highlighting Chinese consumers’ growing preference for homegrown brands. JD.com found the sales value of Chinese brands grew 8% faster than foreign brands last year with volume growing 14% faster. Categories that have traditionally been dominated by foreign brands, such as Mum & Baby, saw strong growth from domestic competitors.

Rising Chinese nationalism is not a new trend, we’ve being seeing signs of this over the past six-or-so years, but it is accelerating with every bit of news about trade wars and Huawei-exec arrests. As powerful and impressive as China is, consumers can still be hyper-sensitive to anything that looks to be putting their country and people in a bad light.

Rising nationalism is coupled with local brands producing better quality products and services, with more resonate marketing and sales strategies. It doesn’t mean foreign brands’ days are numbered in China – there remain plenty of cases of continued growth: purchases of imported fruit grew 36% last year, Nike’s sales in Greater China grew 24% last quarter, and Roger Dubuis announced their watches “resonate very well” with Chinese consumers last week. What it does mean is foreign brands have to work harder to find they place and point of difference that connects with consumers.

In a recent China Skinny fashion project, “国潮” – “China trend” often came up when speaking to consumers. It is something brands across many categories should consider incorporating into their mix to resonate with their target market. There have been many contrived attempts from foreign brands hoping to connect with Chinese culture, however we’ve found some of the most successful examples have been collaborations with local artists and cultural influencers. This could mean working with local fashion designers right through to well-known local chefs for product development and promotion.

Yet beyond trying to connect more with Chinese culture, countless foreign brands could align more with Chinese consumers by simply getting the basics right. Too many brands are still trying to force western sales channel strategies into China’s unique marketplace, others are using armies of Caucasian models to show Chinese how good something may look on them, they’re stocking the wrong sizes, shapes, packaging, formats or even flavours. Some are even developing China strategies based on talking to the ethnically Chinese who haven’t lived in China for some time, or are from a different region to their target market.

Trade war or no trade war, rising Chinese nationalism or not, there’s still countless opportunities for foreign brands to grow from delivering thoughtful strategies in China. China Skinny would welcome the chance to chat about how we can assist with that. Go to Page 2 to see this week’s China news and highlights.

Go to Page 1 Go to Page 2