The lack of a convincing global brand DNA and relevant positioning is now an obstacle for many Western brands to succeed in China.
The example of Carrefour in China
The French retail group recently announced that it was selling 80% of its stake in its China operations.
Many companies have been following these changes closely.
The French group once dominated the retail trade in China but with local competition, its turnover has fallen considerably.
Indeed, when consumers began to adopt online shopping their requirements changed.
Requests for quick delivery at home or in the workplace have become commonplace. At that time, Carrefour was unable to compete with other more efficient local companies, which responded better to changing consumer preferences.
I) China, a market to conquer
China is now a large market with high potential, with increasing sophistication and digital leadership.
These characteristics explain the influx of Western brands into China. Nowadays, getting to the Chinese market is seen as the precondition for conquering the global market, especially in the field of luxury.
II) Top Mistakes of Foreign companies in China
Most companies underestimate the dynamics of the Chinese market, the need for investment and digital infrastructure, and the ever-changing preferences of Chinese consumers.
Companies may soon regret having penetrated the Chinese market if they cannot anticipate new trends.
At that time, even last-minute countermeasures are useless.
III) The DNA of a brand, an obstacle to local success
Before moving to China, many brands wonder if they should readjust their DNA to the Chinese market.
Many brands do not have a convincing and highly differentiated global brand DNA. These brands are then surprised that consumers do not buy their products.
The positioning of the brand is often confused with a vague description of the company that consumers have of it.
Some companies feel untouchable with “exceptional know-how and heritage”; despite everything, it is these companies describing themselves in this way that are the most vulnerable.
These statements are too generic and without distinction. These brands and companies completely disagree with consumers and they tend to move away from overly self-centred brands.
These brands do not justify to convince consumers to buy simply based on technical and design details. However, it should be noted that Chinese consumers look first at the brand and then only at the product.
Before entering the Chinese market, companies need to ask themselves certain questions such as:
- What rational benefit do we offer consumers?
- How is our brand so different from another?
- What emotion do we strive to inspire?
Successful brands in China offer benefits and emotions to consumers while ensuring that they are distinctive from those of the competition.
Today, Chinese consumers must first understand the benefits of the brand before buying its products.
For them to understand this brand, the company needs to define its brand for consumers and with much more precision than most companies have today.
Without this process, a Chinese launch will surely fail.
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