Why global brands need to look at China for their digital transformation – Ashley Dudarenok

 

Ashley Dudarenok

Increasingly global brands not only look at China as a potential market but also as a guide on how they can use the country’s digital transformation for their global ambitions, writes marketing expert Ashley Dudarenok on her website Chozan. “By this year, China’s digital transformation sector is expected to reach $221.95 billion. It is forecasted by Mordor Intelligence to expand to $410.67 billion by 2029, with an annual growth rate of 13.1% over these years,” she writes.

Ashley Dudarenok:

Companies everywhere are looking to China for digital transformation lessons. It is now common knowledge that companies need digital transformation in order to cut costs and run efficiently in the modern age. It involves streamlining processes and the adoption of new technologies. But why China specifically?

By this year, China’s digital transformation sector is expected to reach $221.95 billion. It is forecasted by Mordor Intelligence to expand to $410.67 billion by 2029, with an annual growth rate of 13.1% over these years.

China’s digital transformation involves adopting advanced technologies like AI, 5G, IoT, and big data to modernize its economy and society. This includes integrating these technologies into traditional industries to create efficient and innovative business models.

The transformation focuses on building digital infrastructure, enhancing services, and fostering tech-driven innovation across sectors like finance, healthcare, and urban management, aiming to drive economic growth and establish China as a global tech leader.

Over 50% of thriving global companies incorporate outsourcing into their delivery strategies, according to Deloitte. 72% prioritize digital transformation, and 55% utilize unified enterprise platforms like ERP3 or SAP/4HANA.

Data migration and generative AI are becoming major growth areas. Remarkably, 80% of global business leaders believe generative AI will boost their business efficiency.

Last year, China announced its comprehensive plan for digital development, aiming to make significant strides towards building a “Digital China” by 2025 and to lead globally in digital innovation by 2035.

In 2023, China’s total data output hit 32.85 zettabytes, marking a 22.44% year-on-year increase. Additionally, core digital economy industries contributed 10% to the GDP, as highlighted in the latest Digital China development report from the NDA released last Friday.

More at Chozan.

Ashley Dudarenok 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.

Are you looking for more experts on China’s digital transformation? Do check out this list.

Private brands enjoy consumers’ trust – Rupert Hoogewerf

 

Rupert Hoogewerf

Even during the current economic headwinds, private brands continue to get the trust of China’s consumers, says Hurun chairman Rupert Hoogewerf, among the 2022 China Hurun Brands’List, where Shanghai-listed Kweichow Moutai even outranked the technology giants as Tencent and Alibaba, reports the South China Morning Post.

The South China Morning Post:

Shanghai-listed Kweichow Moutai was the most valuable Chinese brand for a fifth straight year, according to the 2022 Hurun Brands List. The liquor maker, which is also one of the most valuable stocks in the country, was the only brand on the list with value of more than 1 trillion yuan (US$145.2 billion).

The liquor giant’s brand value – measured through openly available economic data and surveys among consumers – was equivalent to the total values of the next six brands that followed it on the list: Shenzhen-listed liquor maker Wuliangye Yibin, Shanghai Tobacco’s China Tobacco, ByteDance’s Douyin, WeChat and parent firm Tencent Holdings, and JD.com, Hurun said. The rankings have been calculated according to the market value of listed companies based on their stocks’ closing prices on July 29 last year, and their peers’ price-to-earnings ratios for private firms.

“Chinese consumers’ trust in private brands has obviously strengthened in the recent few years. [About] 62 per cent of the companies in the ranking were brands by the private sector, compared with 61 per cent a year ago and 39 per cent a decade ago,” Rupert Hoogewerf, Hurun’s chairman, said in a statement.

More at the South China Morning Post.

Rupert Hoogewerf 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 consumer experts at the China Speakers Bureau? Do check out this list.

Why China is important for brands and their marketing - Matthew Brennan

Matthew Brennan

China has not only the largest group on online consumers but also a fully different digital ecosystem compared to the rest of the world. Digital veteran Matthew Brennan explains why the rest of the world needs to learn from China.

Matthew Brennan 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.

Do you need more innovation experts from the China Speakers Bureau? Do check out this list.

China consumers have become more sophisticated in dealing with brands - Tom Doctoroff

Tom Doctoroff

Consumers in China have become more sophisticated over the years in the way they handle brands, says China veteran Tom Doctoroff, Chief Cultural Office or Prophet and author of the bestseller What Chinese Want: Culture, Communism, and China's Modern Consumer, at the occasion of the 2018 Prophet China Brand Relevance Index(TM) at the Market Business Inside.

The Market Business Insider:

According to the 2018 China Brand Relevance Index™ (BRI) survey conducted by Prophet, a global brand and marketing consultancy, Chinese consumers have become more strategic in their purchase. They increasingly value meaningful and tangible innovations of home-grown Chinese brands and appreciate enriched experience through content. 

Tom Doctoroff, Chief Cultural Officer at Prophet said: "Chinese consumers are becoming increasingly sophisticated, actively seeking products and services that provide substance, innovative experience and belongingness. Over the years, we have seen a growing number of brands – both domestic and international – striving to tap into the local market and this trend will be here to stay. To win the hearts of Chinese consumers, brands should be built upon in-depth consumer insights that help boost their relevance to Chinese consumers."

More at the Market Business Insider.

Tom Doctoroff 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.

Fashion brands: caught between global and local aspirations - Shaun Rein

Shaun Rein

Western fashion brands have a hard time succeeding in China. Getting local was the old mantra, but as globetrotting Chinese find a difference between localized products and their global appeal, they also have a problem, says branding expert Shaun Rein to Reuters.

Reuters:

H&M is opening more stores in China this year than anywhere else in the world and the country is already the second biggest market for Inditex outside Spain. 

China is a big draw for retailers who hope to tap the aspirations of a fast-growing middle class, with mid-range names benefiting as consumers trade down from luxury brands since Beijing's clampdown on corruption and conspicuous spending. 

But recent history offers plenty of examples of failure. Western brands that have struggled in China include Gap Inc , Abercrombie & Fitch and Marks and Spencer , which decided last year to close five stores in smaller cities to focus on flagship stores in large cities and online. 

"Most of the Western fashion labels that are mid-range fail in China. A large part of it is that the styles and the fit are so completely different," said Shaun Rein, founder of market intelligence firm China Market Research... 

Rein of China Market Research says Western brands must strike a delicate balance. "You have to keep your global brand image and you can't be that creatively different in China than other markets. The Chinese travel around the world," he said. "It is good to localise. But it hard to localise an aspiration."

More in 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 branding experts at the China Speakers Bureau? Do check out this list.  

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The consolidation of China´s fashion labels - Ben Cavender

Ben Cavender

The world looked with surprise when Nanjing dress-maker V-Grass Fashion bought South-Korean Teenie Weenie for double its own market value. But moving ahead in such a drastic way, seems to be the only way forward for China´s fragmented apparel market, tells retail analyst Ben Cavender to Bloomberg.

Bloomberg:

In China’s competitive apparel market, the top two companies - Heilan Home Co. and Fast Retailing Co.’s Uniqlo brand - had 1.2 per cent and 1 per cent market share respectively in 2015, according to researcher Euromonitor International. 

“The apparel space here needs to consolidate, and the winners going forward are companies with the right systems in place, such as inventory management, the right locations,” said Ben Cavender, a China Market Research Group analyst. “Teenie Weenie is in a good position as it targets the younger casual fashion consumer base.” 

In the past year, V-Grass has shut a third of its boutiques located in third and fourth-tier Chinese cities, and in lower-end malls in bigger cities, Tao said. While those outlets had been profitable, the company wants to presence to establish itself in high-end locations in the biggest cities.

More at Bloomberg.

Ben Cavender 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 experts on China´s outbound investments at the China Speakers Bureau? Do check out this list.    

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Why foreign food brands do well in China - Shaun Rein

Shaun Rein

Despite often higher costs, Chinese consumers try to buy foreign brands, when they are looking for food products to avoid the pollution and scandals with domestic brands. Business analyst Shaun Rein, and author of The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia explains to Bloomberg why: they want peace of mind.

Bloomberg:

Consumers in mainland China are demanding foreign brands that promise something many local products can’t: peace of mind. Worsening pollution and several product-safety scares have led to increased sales for imports that are considered safer, from baby formula and facial creams to fresh fruit and live seafood. “The fear of pollution is changing consumer spending,” says Shaun Rein, managing director of Shanghai-based China Market Research Group. “Anything that’s sort of natural is doing really well.”

More at Bloomberg.

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? Check out this list.

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Consistency: key for brands - Tom Doctoroff

Tom Doctoroff

 Getting your customers involved with a key idea and be consistent, that is the message China advertising guru Tom Doctoroff has for agencies, trying to survive between traditional and digital advertising models. The need for affinity with brands has not changed. 

Tom Doctoroff 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.    

Presentation: Tom Doctoroff from The Paley Center for Media on FORA.tv

China Weekly Hangout
The +China Weekly Hangout will have open office hours coming Thursday, where you can drop in to discuss any issue, but where we want to focus on technical problems you have or we have had with hangouts. The development of this Google tool is going pretty fast, offering every week more new bells and whistles, but also with regularly new challenges. You can join us on Thursday 28 November 10pm Beijing time, 3pm CET (Europe) or 9am EST (US/Canada). You can read our announcement here, or join the event by watching, commenting or actively joining at our event page. 

What do Chinese tourists want? - The +China Weekly Hangout asked Roy Graff of ChinaContact on June 20, who joined us to discuss the increasingly diversifying market of Chinese tourists. And yes, there is no longer one answer for basic questions. Moderation by +Fons Tuinstra of the China Speakers Bureau.

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Japan brands continue to dominate Asian consumer loyalty - Tom Doctoroff

Tom Doctoroff

Japan brands will dominate consumer loyalty in Asia, while China brands will offer them competition only in the long run, although they are learning fast, says JWT's North Asia CEO Tom Doctoroff in CNBC.

CNBC:

“Japanese brands are built on scale, heritage, product differentiation and significant (advertising) spending,” said Tom Doctoroff, North Asia CEO at J. Walter Thompson (JWT), who points out that much of the creative, brand building responsibilities for Japanese consumer firms have been outsourced to multinational agencies.

Doctoroff believes the country’s brands will continue to dominate consumer loyalty in Asia going forward, particularly because Japanese companies are ramping up their focus on international expansion...

“There is absolutely no Chinese brand right now that is actively preferred to Western or Japanese brands,” Doctoroff said.

However, he added that mainland consumer firms are beginning to understand the importance of image...

One such push by Chinese consumer firms to increase brand recognition is via product placement. The recently released Hollywood movie, Transformers 3: Dark of the Moon, featured products from mainland names including PC-makerLenovo, flat-screen television manufacturer TCL and leading dairy products firm Yili.

This may be one small step in the right direction, but Doctoroff points out they still have a long way to go.

“The real barrier is the structure of Chinese organizations and their focus on short-term sales versus long term growth. Chinese CEOs are not solely motivated by gains in shareholder value, they have one eye focused on the market and the other one on political motivations,” he concluded.

More about Japan's brand names in CNBC.

Tom Doctoroff 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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• Louis Vuitton strengthens brand at Beijing museum - Shaun Rein (chinaherald.net)
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