Think BR: China - obstacles and opportunities
Chinese brands need to better understand the benefits of market insight and competition before they can succeed globally, writes Jeremy Rainbird, CEO, Addiction Worldwide.
Jeremy Rainbird, CEO of Addiction Worldwide.
I came back from the IPA trip to China exhausted but elated. What a place!
More than the time difference and ensuing jet lag which I undoubtedly suffered from, I had a hangover of a different kind.
Experiencing at first hand such a radically different culture really took its toll on me mentally and I came back with my head buzzing with questions about how it might ever be possible to marry the UK advertising industry with the Chinese brand landscape.
Many of the highly successful brands currently in China are, let’s face it, of western origin anyway and, as John Tylee says so well in his recent feature, those brands are mainly being marketed to the consumer market by agencies also of western origin.
The Chinese brands which are now emerging as commercially successful in China spend relatively small amounts of money on traditional brand advertising, and the sales promotional activity that they do undertake is rarely rooted in strategic thinking from what we could see.
Tylee is right to point out that this lack of strategic direction that Chinese brands have, might in the end be what drives them to seek advice from British agencies when (and if) they look to expand into different markets.
We visited the Snow brewery while we were there. The sheer volume of Snow’s sales in China alone was staggering.
Hats off to them for overtaking Budweiser in terms of volume sales, but I left there feeling that their lack of brand ‘story’ would be a real problem if they were ever to attempt to break into other markets, and that there is a huge job to be done in educating and persuading Chinese brand owners that creating a (compelling) brand story will be the key to their success with Western consumers.
We tend to forget, or take for granted, the sophistication of our consumer market here in the UK (and West generally).
Consumers are discerning and see marketing and advertising messages transparently here.
UK consumers rarely respond to sales messages, for example in the case of buying a car, without some kind of brand knowledge and ‘driver’ (sorry) and this needs to be developed over time and on many different levels using different channels.
Customers in the West want to have a relationship with a brand, to really understand what that brand’s values are and will vote with their wallets on the ones they like and the ones they don’t.
Chinese consumers have only relatively recently had disposable income and a hunger for spending it on non-essential goods.
I found the stark contrast between the haves and the have nots quite disturbing in China, as one might expect - everything is extreme there and that’s also what makes it so fascinating and intoxicating.
It has the appearance of a free, consumer market but brands also live with the certainty that they will be ‘reigned in’ by the government should they be too successful or be seen to be making too much money.
The marriage of consumerism and communism is not always a happy one but the government will need to decide how to make it a happy one if they are to achieve success in foreign markets.
This is the point where the Chinese authorities will have to, even reluctantly, admit that they are open to advice and help from the more advanced consumer markets.
Culturally I felt the biggest gap was in the Chinese understanding the need for market insight and, in particular, market competitors.
As yet, those brands with the commercial prowess to take their products abroad haven’t undergone any evaluation against their market competitors and will find it hard to view competition as a threat. . . it’s just not the Chinese way of viewing things.
They would 'lose face’ doing so, but alas, one it's something that they will have to embrace when, and if, the time comes for that kind of export growth.
We in the West could be seen as overly critical of these fast-growing Chinese brands and their approach to marketing.
After all, they have a huge home market to sell to and their need to move overseas is not yet evident.
However, we have learned over time and after decades of honing our skills that it is not enough just to have a great product.
You have to have a great brand for real success, or rather, you will make more money if you do and de-risk a foreign launch through ‘challenger behaviour’.
Building a brand from scratch takes insight; the ability to be a real challenger brand comes from the ability to use that insight and communicate your USP, your voice and your purpose, in a confident and contrasting way to the norm for that category, proving you are better and therefore worth a try.
During my time in China, I felt excited and also overwhelmed at the job facing the Chinese creative industry if it is to compete on a truly global stage.
Would I LOVE to have a go at it? You bet! Will that chance ever come… frankly, it’s really hard to say.
Jeremy Rainbird, CEO, Addiction Worldwide
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