Foreign brands in need of a post-corona strategy - Ashley Dudarenok

Ashley Dudarenok(left), Shirley Ze Yu (right), Martina Fuchs (under)

Marketing veteran Ashley Dudarenok sees great opportunities past-corona crisis as foreign brands desperately look for new China strategies. She discusses with political economist Shirley Ze Yu and Martina Fuchs, and is a bit gloomy about Hong Kong for the next six months, but optimistic about China.

Ashley Dudarenok and Shirley Ze Yu are speakers at the China Speakers Bureau. Do you need one of them (or both) at your meeting, conference or online meeting? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on the opportunities after the corona crisis? Do check out this list.

China's consumers are trading down - Shaun Rein

Shaun Rein

China's consumers used to pay a premium to foreign products, because of the presumed quality and status connected to it. But those easy days for foreign brands are over, says business analyst Shaun Rein at the City Wireselect.
City Wireselect:

In his address, Rein, who focused on the real winner from the trade war between China and the US, also looked at the themes that are underpinning Chinese consumer growth at present. 

Drawing from his book The War for China’s Wallet, Shanghai-based Rein said that there is still an ardent belief in the West that Chinese consumers want expensive foreign items.   

‘The middle class story is changing,’ he said. ‘They are willing to trade down. Where they would have spent the equivalent of $5 on a Starbucks, they are now spending $2 on Luckin Coffee. Rather than spending large sums on a Coach handbag, they are now more willing to buy a no-name brand from a Chinese producer 

‘The main theme for 2019 is that the Chinese middle class is trading down. You need to position for the companies that will benefit and also avoid those that are going to be taken away from. Consumer confidence is low, that is a factor, but they are also talking more about value.’ 

Rein tied the change to other factors in daily Chinese life. He said the so-called ‘China Dream’, of becoming hugely affluent as the country grows, is receding, which is also affecting spending habits. 

‘The China Dream is changing. At one point, it was about buying foreign goods to show your prowess. In 2011, we did research where we looked at 5,000 Chinese people’s habits, and 85% said they would always buy foreign brands. 

‘We redid the study in 2016 and 60% said they would by Chinese goods over foreign. We haven’t done it since but the trend is only one way. Chinese consumers no longer want a Kit Kat or Nestlé, they want Chinese brands. They are viewed as equally as good but with more attractive price points.’

More at the City Wireselect.

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

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.