Foreign brands can both over-localize and under-localize - Shaun Rein

Shaun Rein

For foreign brands working on the China market is tough, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order. They can both over-localized and under-localize, he tells Hicom-Asia. Some of the pitfalls for foreign companies.

Hicom-Asia:

HI-COM:  In your experience, what have been the most common misconceptions about China held by foreign companies? 

Shaun Rein: Companies entering China can over-localize or under-localize.  When I say over-localize, what I mean is that they can forget their core brand, their core DNA, and the result is that they have no clear direction or strategy when launching in China.  One example is [Mattel’s] Barbie.  When Barbie launched in China, they opened a Barbie themed store and Barbie themed café, avenues they had never pursued elsewhere in the world.  The result was that Barbie’s China entry appeared a bit confusing.  In another sense however Barbie under-localized; the outfits for Barbie sold in China were too ‘sexy’ and didn’t fit the local taste of young Chinese girls who generally prefer fashion that is more ‘cute’ and girly. 

Another misconception foreign companies often hold when entering China is thinking there is no need for a local mainland Chinese on the management team.  Companies would be well advised to have a local Chinese on their team and empower this individual to be able to guide and steer strategy.  This local representative knows better than anyone the unique political, regulatory and consumer dynamics that are at play in China and can help steer or pivot your company as needs be. 

HI-COM:  When it comes to a successful China market entry, what would you say are the critical elements companies should be aware of? 

SR:  Understanding what consumers want through undertaking ongoing research that has regular feedback loops.  Consumer preferences and channels can change so quickly in China that it is vital to closely monitor what is happening on a quarterly, if not daily, basis.  Understand that e-commerce as a distribution channel is huge here.  You need to also get the right manager that is aware of government policies and can help you pivot strategies as needs be.  Politics and the market are so intrinsically tied in China, creating a unique ecosystem that is not found elsewhere in the world.

More at Hicom-Asia.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list. 

Mattel, do or die in China - Shaun Rein

Shaun Rein

Mattel has seen its earlier operations in China falter, but now closed a new deal with Alibaba to sell interactive learning toys on the fragmented Chinese toy market. For Mattel it is now do or die, says business analyst Shaun Rein to Reuters.

Reuters:

Alibaba's reach and China's preoccupation with education could give Mattel the thrust it needs to win over the country's so-called "tiger mothers", who aggressively push their children to be the best in school. 

"Chinese parents tend to buy more educational toys, science kits and learning toys than all their counterparts in America and Europe," said Shaun Rein, managing director of China Market Research Group. 

While Mattel has garnered a nearly 2 percent share of the estimated $31.5 billion toys and games market in China, it has been unable to replicate the success it has enjoyed in the United States... 

Mattel isn't the only U.S. company that has struggled to navigate the Chinese market. Wal-Mart Stores Inc (WMT.N) sold its online grocery store Yihaodian in China last year in return for a stake in e-commerce firm JD.com Inc (JD.O), saying the country's e-commerce market was hyper competitive. 

Several others including Home Depot Inc (HD.N), Hershey Co (HSY.N) and Costco Wholesale Corp (COST.O) have also struggled in China. 

For now, nearly everything is riding on Mattel's partnership with Alibaba. "It is just one of a hundred initiatives for (Alibaba)," said Rein. "But for Mattel, it is really do or die."

More at Reuters.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

What did Barbie wrong in China? - Helen Wang

Helen Wang

When Barbie went down in 2011 in Shanghai yet another icon of US consumerism failed in China. Author Helen Wang looks back in Forbes and describes what Mattel did wrong.

Helen Wang:

Mattel didn’t quite understand what Chinese girls and young women want. The Chinese concept of “femininity” is very different from that of American. In China, “feminine” is more about sweet and soft rather than smart and strong, more about gentle and loving rather than dazzling and fashion-forward.  Although it has created a Chinese Barbie Ling with black hair who wears Chinese attire, Mattel failed to understand what Ling would represent in order to appeal to Chinese girls. 

Instead of making Barbie a fashion and lifestyle brand, Mattel should have made Barbie an aspirational brand to empower Chinese girls. The idea of “I can be” is not encouraged in Chinese society, but is exactly what Chinese girls need. If Barbie, or Ling for that matter, could become a role model for Chinese girls, she would have re-invented herself and Mattel would have had a better chance to succeed in China... 

Mattel tried to bring a 50-year-old brand to a new market that had just gotten to know Barbie. Chinese consumers are new consumers. They are not yet as sophisticated as their counterparts in the West. Although China has changed significantly, it hasn’t changed to the point that 6-year-old girls would want to have their own fashion runway. I grew up with only one doll. Many women of my age didn’t even have dolls when they grew up. Although my niece now has many dolls, I am afraid that having a design studio to design her own dolls is too much of a luxury for her. The market was simply not ready for that.

More in Forbes. 

Helen Wang is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

On Thursday November 1 the China Weekly Hangout will focus on eight years of harmonious society under Hu Jintao and what we can expect the next eight years under Xi Jinping. Including Janet Carmosky who will report on the findings during the National Committee on US-China Relations China Town Hall on Monday. The CWH is held on 10pm Beijing time, 3pm CET (Europe) and 10pm EST (US). More on the logistics of the hangout later this week at the China Herald or our event page at Google+.

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Mattel got carried away with Barbie story - Paul French

Image by Zingaro. I am a gipsy too. via Flickr

The sudden closure of Mattel's Barbie store in Shanghai seems to have nobody apart from Mattel, says retail analyst Paul French in the LA Times, today. He is sceptical about the firm's announcement they are merely changing plans.
The closure comes after other high-profile closures of retailers like BestBuy and Home Deposit.
The LA Times:

Paul French, the Shanghai-based founder of retail market-research company Access Asia, said Monday he was skeptical that the closure was planned.
"What’s better than a [successful] flagship store in Shanghai?" he said.
Instead, French said, Mattel probably overestimated its cachet in China and assumed Chinese women would embrace childish brands the way many women in Japan do with Hello Kitty and, well, Barbie.
"They got massively carried away with that store," French said. "Retail is all about square footage and I never saw enough people there to justify its size. The rent there would have been big."

Paul French by Fantake via Flickr

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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Mattel has another Barbie problem

Danwei points at another problems toy giant Mattel is having with Barbie, although it is not the one with lead in its paint as far as I can see. Although China Barbie focuses more on an adult audience, Mattels seems to think that we might be confused.

Without the help of Mattel we would never have found this site, so, thank you. Mattel only wants a 100,000 USD in compensation, that is pretty low for this high-end promotion.