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The Year of Tiger and no hunt for western brands

By Domenica Di Lieto | Chief executive officer

January 28, 2022 | 6 min read

The clock is ticking for many western brands in China, predicts Domenica Di Lieto, the chief executive officer of Chinese planning and marketing consultancy Emerging Communications. The Year of the Tiger will be one in which fortunes are turned around, or the planning will be focused on packing up and returning home.

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The problem is most brands from outside China don’t know they no longer hold favoured status

There was a time when China was a marketers dream for brands from Europe and the US. All they had to do was to present themselves before an adoring Chinese public to guarantee sales. Geographic origin was the supreme brand USP.

Those times are gone. It has been replaced by Guochao, or ‘national trend’ based on a growing and significant appreciation of Chinese design, quality of production, and soft nationalism. ‘Made in China’ has become ‘Designed in China’, and supporting marketing based on history and culture plays perfectly to an audience riding the crest of a wave of benign patriotism and nostalgia for China’s past.

Guochao allows brands to tap into consumer needs to connect with the nation’s history through the products they buy, and the fashion they wear. Retail giants Alibaba, JD and NetEase have created Guochao shopping festivals in response. An estimated £4 billion in Guochao fashion sales took place last year.

The problem is most brands from outside China don’t know they no longer hold favored status, or if they do, they aren’t demonstrating it in marketing strategy.

The turnaround in consumer sentiment compounds another problem for most non-indigenous brands. The majority of marketers are still finding it difficult to let go of the practices that are successful at home but don’t work in China. Namely, the brand as the hero. It has no resonance in China. It merely serves to distance buyers from sellers.

Consumers want to know what a brand will do for them, how it will support their values, life choices, and aspirations. Glitzy video production and big-name endorsement cannot make a proposition relevant if it does not directly enhance buyer goals. It is an unhelpful fact most western brands have trouble accepting, and understandably so. Creating messages tailored to such discriminating consumers is more difficult than bigging up the brand.

The marketing challenge does not end there. Because hiring high profile KOLs and celebrities has worked so well in the past, and because it is a convenient way to instantly acquire very large attentive audiences, Western marketers are reluctant to dial down their use in favor of UGC and Key Opinion Consumer (KOC) marketing that is now significantly more effective. It requires significantly more understanding of consumers at ground level, and the ability to recruit and nurture KOCs and social media groups.

However, it is possible for European and American brands to utilize Guochao themselves. Assuming its credentials is possible. But adopting UGC and KOC communications as the primary conduit to Chinese consumers is essential. It takes a firm will to acquire the ground-level knowledge to get it right. The alternative is hiring an agency with the relevant strategic planning and implementation experience to do the thinking and activation. This probably won’t be one of the big network offices in China that often suffer the lack of localized granular awareness as their clients.

Guochao credentials can be acquired in a number of ways, including working with Chinese designers and creating partnerships with indigenous companies, capitalizing on calendar events, traditions, family, and even food. But it has to be subtle. An outsider clumsily pasting on Chinese cultural references will be viewed through a similar prism as the D&G pizza-eating chopstick video.

Chinese designers and partners are essential not just because they provide the necessary cultural authority, but they have intrinsic insight into what will work, and what the commercial boundaries are. The risk of faux pas diminishes, and the likelihood of sales rises vastly if local knowledge is involved.

Similarly, employing Chinese talent in the design and execution of marketing inevitably leads to communication that resonates with the target audience when engaging in UGC and KOC activity. Doubters only have to look at how homegrown brands comprehensively outperformed outsiders in marketing in recent years.

When it comes to working with those at ground level, it requires experience and knowledge to gain the trust, tailor content exactly, and closely manage on a permanent basis. There are few second chances when it goes wrong.

The clock is ticking for many western brands in China. The Year of the Tiger will be one in which fortunes are turned around, or the planning will be focused on packing up and returning home. There is no need for it to be the second option.

Domenica Di Lieto is the chief executive officer of Chinese planning and marketing consultancy Emerging Communications

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