The China market can be hard to understand and navigate from a local and global perspective. Cultural sensitivities when it comes to brand storytelling, the very quick changes in consumer demands, and difficulties in choosing the right ambassador can all lead to challenges in picking the right marketing strategies.
Additionally, the unforeseeable and ongoing COVID-19 lockdown measures in the region are shifting consumer consumption patterns, with a growing focus on sustainability and digitalization; live-streaming e-commerce, for example, doubled in popularity in 2020 and has only grown more popular ever since. Despite these changes, many international companies that are trying to break into the Chinese market are still using dated marketing tactics.
China is set to become the largest luxury market by 2025. And for many luxury names, the Chinese market accounts for 40 or 50 percent in shares of revenue. Therefore, brands now need to specialize their strategies in order to resonate with their Chinese consumers and drive business locally. Here, I look at what the four components are that make the perfect match when it comes to nuanced, value-based marketing.
Diversity and inclusion matter
Like in the west, diversity and inclusion have become predominant messages to deliver in marketing strategies. Making sure that everyone has a seat at the table is not only key for the people working for the company itself but also for the ambassadors that are representing the brand. Recently, established luxury players such as Valentino as well as names like Pandora and Adidas have all looked toward executives with prior APAC experience, indicating the trend of China-fluent hires stepping up a gear in 2022.
This is noticeable in more diverse celebrity and ambassador appointments too. Louis Vuitton leveraged Chinese Olympic Gold-medalist Eileen Gu for its December 2021 Twist campaign who inspired the younger generation through her performance on the world stage. Meanwhile, Alexander Wang collaborated with Liang Xiaoqing — best known as China’s most popular “auntie” model even though she’s only in her thirties — to connect with middle-aged or elderly women.
Gen Z as the next motor of domestic economic growth
Born between 1996 and 2010, Gen Z makes up about 15 percent of China’s population but its influence goes far beyond this percentage. It has the fastest spending growth, set to rise fourfold to 16 trillion yuan ($2.4 trillion) by 2035, according to China Renaissance. That being said, Gen Z is also the most informed, demanding, and impulsive demographic, which can make it difficult to understand as a consumer group.
Because of their growing economic power, many luxury brands have taken concerted action to reach out to Gen Z shoppers. The most common examples of this are collaborations between luxury brands and young Chinese celebrities or influencers, such as Valentino’s 520 campaign with brand ambassador Lay Zhang and singer Jessica Jung. Moreover, as Gen Zers place more value on self-expression through creative cultural products, understanding the “China Chic” trend is important. A studio founded by designer Feng Shixiong in Sanxingdui, which designs new products based off the Sanxingdui ruins, is a prime example of promoting traditional culture.
An authentic, green footprint
The pandemic has increased concerns around sustainability, shifting Chinese consumers’ perspective — and priorities — on the issue. According to a study by Credit Suisse Research Institute in February 2022, Generation Z and Millennial consumers in emerging economies are more environmentally conscious, more likely to buy sustainable products, and are willing to pay more to ensure a sustainable process for these products.
In my opinion, the younger generation has proven to be more loyal than their elders, meaning C-suite leaders need to understand what they want in order to retain them in the long term: tangible development and commitment when it comes to sustainability, ethics, and real transparency. A notable example of this is Icicle, a Chinese fashion brand whose sustainable philosophy is deeply rooted in Chinese culture. A symbiotic relationship with the natural environment has been guiding the brand’s approach to fashion since 1997. It’s this commitment to sustainability, transparency, and local culture that has laid a solid foundation for the label.
Finally, it’s not just enough to talk it
Today’s consumers do their research when purchasing items and pay special attention to a company’s manufacturing process and sustainability. According to a report on China’s sustainable consumption of clothes, up to 83 percent of responders chose environmentally friendly fabric when buying clothes. Unlike in the west, the Asia Pacific region is putting technical product marketing (creating, maintaining, and enabling sales on competitive content) at the forefront.
With this in mind, domestic names are winning the race as the rise of Guochao sparks a new interest for homegrown products that use local ingredients. Hangzhou-based beauty brand Florasis is doing a great job at utilizing local elements, turning to ancient Chinese recipes of flower essences and herbal extracts for its cosmetics.
Ultimately, this region doesn’t follow a “One-Fits-All” marketing approach. Brands must first understand what Chinese consumers need in order to resonate with them and drive business locally.
This is an op-ed article that reflects the views of the author and does not necessarily represent the views of Jing Daily.