Ocean of The Consumption
Marketing and Promotion Agency helps Western brands to enter and grow sales on China’s market.
Consumers in China initially respect western lifestyle brands, which are often regarded as a better benchmark of quality.
Ironically, western newcomers often choose to enter the market in a location that is an easy travel destination, but can be quite the opposite from ideal in regard to competition, and new customer acquisition cost (CAC).
Chinese market has the biggest segment matrix divided by geography, demography, income, and media channels. Analysing the dynamics of the lifestyle marketing in China, can reveal unexpected sweet spots.
“Highly digitalized consumers significantly reduce marketing cost.”
“Powerful marketplaces with highly involved users. “
“Deeply integrated local payment gateways”
“Simple to reach niche segments.”
“Offline marketing became more efficient with consumer digitalisation.”
“Fast and cheap transportation“
“Virtual presence and operations in China”
“Able to provide tailored and better offers with less restriction from EU GDPR”
“More freedom in operating with data.”
Comments from our clients who already established sales channel in China:
“Unfamiliar media environment and limitation of using same website, social media channel and other channels”
“Paradox of being a highly competitive market, but having a lot of space for niche market products.”
“Market entry cost is relatively high comparing to other Asian countries”
“Finding good partners that will help to overcome local difficulties”
Which sales channel fit
your brand to enter China market?
Choosing a local representative partner is the most cost-efficient option to penetrate the China’s market. However, it bears several risks to transfer representative rights to local for-profit-companies. Risk management and careful selection can help to avoid costly problems.
China’s digital marketing tools can develop a pool of potential partners, and compare candidates before the interview.
Highly advisable to handle the rights of marketing property, and other IP through an agreement to separate a marketing agency or trusted lawyers office. The purpose being to maintain control over your Chinese localized brand, brand usage, and long-term development plan in the China’s market.
To find representative, check: B2B Marketing
It’s very common to develop distributor networks to cover the China market. Distributors can be divided according to business segments or territory. It is possible to search for potential distributors, but the most efficient way is to create pull-effect from consumers to distributors.
Niche segmented marketing can connect brands directly to end-users, and emphasize specific messages. That type of marketing allows to turn market best distributors to become interested to joint supply chain and the fair conditions.
Distributors can be the most effective way to expand sales to new territories and segments. However, in China, distributors often have conflicting interest with the brand. One way to manage potential conflict cost is by managing your marketing channels separately from your China sales channel.
Western companies may initially think that direct sales require a big initial investment, and employees working a lot of hours. However, for testing waters, direct sales can be handled through a virtual presence in China.
China’s lifestyle cluster is a highly developed infrastructure, and it is possible to start your own direct sales operations without having operations in China. All tasks can be coordinated and sub-contracted to local partners through safe structure that allow headquarters to lead China’s sales on a project management basis.
Over 147 million Chinese people between the age of 19 – 35 are part of the one-child generation, and considered Chinese Young Free Spenders (Millennials) that want “Lifestyle”.
According to the new report shown by Tencent Social Ads, this number has tripled the savings of the post-90s generation, indicating a higher purchasing power and financial autonomy.
In fact, being the only child means they were the center of attention because, without other children, parents were more willing to make financial sacrifices to ensure a bright future for that single child.
Moreover, their ability to spend comes from their parents and family, and also their lifestyles are more influenced by internalization tendencies.
2020 identified an important category of consumers who outsized role in keeping Chinese consumer spending. These consumers are young digital natives who reside predominantly in Tier 2, 3 or 4 cities, where living costs are lower.
Flush with disposable cash, they are optimistic about their futures, and have little hesitation about spending their money, whether on a new tech device, an overseas trip, or high-end skincare.
They have a lot more time on their hands than their counterparts in larger metropolises. This allows them free time to eat out, follow the latest trends, and buy products that will enhance their lifestyle and social status.
Young spenders also believe that expensive products are generally better than cheaper ones, and they aren’t particularly concerned with saving for the future. Young spenders constitute 25% of the population, but 60% of total spending growth.
China Lifestyle Marketing
Chinese consumers take “the pursuit of an active lifestyle” to an extreme. The primary purpose of new brand is not to own that, but to declare its ownership. “Camera eats first!” – popular phrase in Shanghai snobby restaurants, symbolizes well China lifestyle marketing.
In contrast, there are a broad range of inspirational young consumers who are not only concerned with getting noticed, but seeking a higher purpose and more fulfilling life experiences. More millennial and zoomer generation consumers in China are motivated by opportunities to make a social impact and are environmentally conscious. Brands that align themselves with these values building communication channel with consumers including content that reflects audience on a more meaningful level.
Our China lifestyle marketing experience, shows that one of the most effective ways of relating to customers in China is to communicate with them on a deeper level: answer their questions, become their friend, thank them respond to their feedback; and take their feedback seriously when creating future content.