Survival Strategies for Brands in China: A SXSWi Session

Key points from SXSWi presentation by Emily Chong, frog Dir of Marketing, Asia.

Key Understandings for China:
1. China is not a nascent market.
2. There is no such thing as “The Chinese Consumer.” With cities like Beijing at 30 million population, China is really a collective of mini countries. Treat each city like its own country. Look at tiering cities for your approach.
3. Commercialization is how china innovates. Fire-adjust idea
3.You must move fast. It takes China 19 days to copy a new iPhone.

Popular Consumer Segments:
1. The Value consumer is large. They use lots of online tools and meet-ups to find deals.
2. China’s elderly population has more disposable income than ever before.
3. The children of the 3 decade policy of 1 child China are known as “Little Emperors.” They are okay with Shanzha (knock-offs) but for other people.

Consumer Behaviors:
1. 64% of consumers prefer foreign products because of the quality.
2. Because of lack of trust for institutions, Chinese feel a moral obligation to share experiences. Social media is very popular but the communities and tools are fragmented. Consumers evolve from tools like QQ when they are young to graduating to others.
3. Important to remember the culture of emphasis on the collective, not the individual. “What will others say when they see me with this new product.”
4. China has the largest online and mobile population. eCommerce is next. Tmall.com is a growing popular ecomm network. Because of trust issues and Shanzha, Chinese prefer to see the product first hand. However, seeing is believing because of lack of trust. Example: Forever 21 had a false start. Had to close their original stores. They then reopened online first to test things like where orders are originating. They the successfully opened new stores.

Let’s Change the Discussion to Transparency

Cheerios was recently highlighted in the press for a social media campaign that went seemingly haywire. Cheerios asked fans to upload photos about what Cheerios means to them. Genetically Modified Organisms (GMO) labeling protestors overtook the campaign and used it to protest General Mills participation with the defeat of Prop 37, a California law that would require food companies and retailers to label products made with GMOs.

But is this really a case of a social media campaign gone bad? The real story isn’t about the social media campaign but rather about brand transparency. Consumers want to know more about the products they buy and have never had more power to get at the truth. We live in an age of increasing transparency and consumer empowerment. I am afraid that too many of us are not recognizing this paradigm shift and simply write episodes like this off as a marketing mistake. My hope is that leadership teams (not just Marketing) across the world are now discussing how to be more transparent, how to empower their consumers and not looking for ways to quell social media.

It’s time we all recognize it’s better to be transparent, even if that means showing your blemishes, than to maintain a shroud of secrecy of perceived perfection. Today’s consumer will respect you for that even if they disagree with you.

Leverage an Experience to Inspire

I was recently reading a music blog and a Starbucks banner ad caught my attention. It had a volume indicator moving up and down and it was asking me to create my own DJ sampling music mix. I clicked on the ad and ended up spending several minutes creating my own mix – all the while Starbucks giving me little clues to their new Frappuccino mix flavors. At the end, I shared the mix with my Facebook friends and then was given a coupon to try the new Frappuccino mixes. This fun experience got me thinking about how Starbucks use to advertise and how it has changed.

Starbucks old vs. new banner ad

I found an example of their old banner ads and compared that to this new approach. What a difference! You can tell Starbucks has embraced the idea of inspiring people to engage with their brand versus the outdated method of only relying on push messaging.

Tim Williams from the Ignition Consulting Group has a great webinar on developing creative briefs that can produce these kinds of experiences. Essentially he says to approach your brief this way:

  • Assume you can’t use advertising. What would you do?
    • What help or value can you offer your audience? This is what my colleague Andy Laing refers to as “the value exchange”.
  • Once you have the idea:
    • Why might consumers talk about this idea?
    • How do they get involved?
    • What keeps the conversation going?