Annabel Kelly reports on the huge opportunities available to Western brands in China especially through e-commerce.
China is second only to the US for the size of its economy and imports. For some markets, however, China has overtaken the US. The Chinese car and light truck market is now bigger than the US market. What’s more, the Chinese – with their increased wealth and diminishing trust in local brands – have a fast growing appetite for Western products especially those that are consumed in public such as fashion, cosmetics, personal technology, food and drink, movies, and automotive. In 2013, for example, 60% of all vehicles purchased in China were not homegrown brands, an increase from the previous year.
China not only has the largest population in the world, it also has the largest internet population in the world. Over 600 million Chinese (about half) are internet users equating to twice the total population of the United States. More often than not, the Chinese access the internet via a mobile device rather than a desktop and spend more time online than their US counterparts. Social media and, in particular, instant messaging (through WeChat, QQ and other apps) is huge in China. The Chinese are also very accustomed to using QR codes and ordering from tablets in restaurants.
China is fast catching up with the US’ position as the largest e-commerce market. With few physical outlets (in the smaller cities at least); live customer support; and extremely fast and cheap delivery services; the internet is often the easiest way to purchase both consumer and B2B products. Online brands rarely deal directly with the consumer but, instead, trade in digital marketplaces such as those owned by the now public Chinese e-commerce giant, Alibaba.
As a culture, the Chinese value the group over the self and so, when it comes to making purchase decisions, they give a lot more credence to word-of-mouth recommendations – increasingly shared through social media networks – than Americans. They are also more focused on the past and the future than their live-for-the-moment American cousins perhaps explaining the popularity of brands with global heritage and the tendency of brand messaging to be aspirational in nature. In China, a chicken dinner, vacuum cleaner, or car all use the same messaging formula of good luck and prosperity for the purchaser. Tore Claesson, Creative Director at TIO China (and AKK Research partner), feels there is an opportunity for brands to break away from this safe, traditional messaging style and cut a new path: “Advertising in China is in a nascent stage where brands are not quite daring enough to differentiate themselves in an authentic way. Given this situation, there’s an opportunity for smart brands to blaze the trail, break through the clutter with original, creative, and differentiating strategies.”
Image “QR code for Chinese Wikipedia Mobile” by Great Brightstar – Own work. Licensed under Creative Commons Zero, Public Domain Dedication via Wikimedia Commons