5 lessons in marketing to Chinese consumers

China’s growing middle-class has become an important consumer base for Western companies. However, Chinese culture, trends and opinions can be difficult to keep up with for multinationals. In addition, Chinese consumer behaviour is changing at a rapid pace. This has prompted Chinese companies to connect with consumers in new ways. But how exactly do successful Chinese brands connect with consumers?

1. Brands must understand modern day Chinese consumers

Brands must follow modern Chinese cultural trends and must continue doing so once successfully marketing products. This means keeping up with the rapidly evolving consumer patterns.

Cultural trends are created by consumers and are the voice of consumers. Successful brands in China are built in the hearts of customers. Only companies that listen to the voices of customers, can become successful brands.

In a guest article in the Chinese online publication the CY Zone, Chinese marketing expert Shen Haitao highlights that Chinese consumers are looking for increasingly comfortable lives and products which will simplify their everyday business.

With the rapid economic development, China’s middle class has grown significantly in the past years. According to a study by consulting firm McKinsey & Company, China’s middle class has reached 200 million and by 2022 76% of China’s urban population will be considered middle class. This economic shift directly influences Chinese consumer behaviour.

Consumers’ demand for high-quality products and services is increasing. This demand is fuelling competition between Chinese brands. The pressure forces continuous developments in brand marketing but also creates new business opportunities for brands.

2. Chinese consumers are looking for reassurance and quality

China’s economic reform significantly impacted Chinese consumers. With the rapid economic development, consumption grew and improved production methods, resulted in higher quality of many goods. Thus, consumers are now looking for products which benefit their lives.

Shen Haitao points out that Chinese consumers live increasingly fast paced lives and scandals, for example in the food industry, have shaken consumers’ trust. Therefore building a brand which establishes trust with consumer has become a key to success.

These days, Chinese consumers are looking for reassurance when purchasing a branded item.

Therefore brands have to not only create high-quality goods but also build an emotional connection with consumers when marketing the brand. Trust is a key element in the way Chinese consumers make purchasing decisions. This means that only those brands that can establish this bond with their customers can achieve long-term sustainable growth.

3. Build close relationships between consumers and customers

Unlike European consumers, Chinese consumers are not brand loyal. Regardless which brand, service or product, if it does not continuously bring value to Chinese customers, they will find a better alternative.

While Apple has successfully established themselves in the Chinese market, domestic technology companies are now starting to outcompete the iPhone producer. Many consumers who previously purchased iPhones have now started to purchase domestic brands such as Huawei instead. On Chinese social media platform WeChat, consumers explained that this trend was caused by Apple’s inability to innovate their product. “Although I don’t enjoy adapting to new mobile phones, I still decided to switch to Huawei. I don’t like how Apple’s phones are getting slower and slower. This is how they make you continuously buy their newest iPhone mode. I hate it” commented a user named Xiao A.

In this particular case, Apple capitalised on the common believe that old technology inevitably slows down. Apple intentionally slowed down old devices in order to incentivise consumers to upgrade to newer iPhone models. Previously Chinese consumers had only few high-end smartphone brands available to them. Therefore they had little choice but to continue purchasing Apple iPhones. However, the Chinese market these days produces an oversupply of high-quality, high-end smartphones. This has made consumers more likely to purchase brands which give them independence over when to upgrade their technology devices.

Brands must not just improve consumers’ lives but must build an emotional connection with them. Any brand which only markets a set of product will be eventually lose Chinese consumers. This is the resurgence of an ancient Chinese philosophical concept in modern day brand marketing. Over 500 years ago, ancient Chinese philosopher Wang Yangming argued that knowledge and action must be integrated. The idea that brands must be integrated in their environment in order to stay relevant is modelled after Wang Yangming’s philosophical thought and has become the core idea of modern Chinese marketing. In modern day China enterprises have become a social instrument with the fundamental purpose of solving people’s problems and improving customers’ lives.

4. The quality of the product is key to brand success

The internet and social media have completely transformed what Chinese consumers value in a brand. While previously it was important for a brand to be widely known. In the era of global connectivity, brand marketing is focusing on the essence of a brand. The essence of the brand is the relationship it is able to build between the owner of the brand and its users. The most important link between owners and users is the product itself.

In the past Chinese consumers were primarily focused on the values and the connotations a brand communicated. If this social contract was nott fulfilled, the product did not match customers’ expectations. In that case customers likely decided to purchase a different brand.

Because nowadays competition between brands has become so fierce, it has become too easy to find a substitute for any product. As a result, products themselves have once again become a key aspect of a brand’s success. Brands which want to be successful in China must create products that exceed customers’ expectations.

5. Connecting to consumers

Promoting a product has always been an important way to target new consumer. However, in the era of internet and social media, the purpose of promoting an item has changed fundamentally. Chinese consumers want promotions to connect with them, not to tell them why they should purchase the item. Integrating consumers in the brand has become a key aspect of a brands success.

In China’s competitive consumer market it has become important to continuously establish connections with consumers, to listen to consumers’ voices and to help consumers solve their problems.

Next Steps

Today China’s consumer market is rapidly changing. It is important for brands to gain an accurate understanding of the underlying cultural trends that inform Chinese consumers, to establish an emotional bond between the brand and the consumer, and to continuously deliver high-quality products and services. While the Chinese consumer goods market is highly competitive, it offers many opportunities and will continue to grow at a rapid pace. At Hampton Group we focus on providing accurate insights into China. If you are interested in successfully entering into the Chinese market with your brand, contact us at office@hamptonholding.com.