The China consumer market remains a challenge and yet it still offers a huge opportunity for brands looking to enter the market. In fact, online sales in China are still growing despite the current pandemic and slow economic recovery. During 2021, China’s online retail sales reached 13.1 trillion yuan, an increase of 14.1% over the previous year.
Overseas brands can take advantage of China’s economic changes, reduce costs, increase efficiency, and focus on strategic initiatives by leveraging the appropriate digital marketing strategies. To succeed in China’s complex and incredibly diverse consumer market, it is important to tailor your digital marketing strategies to local preferences as well.
Here are 3 steps you and your brand can take to maximize your China digital marketing efforts in 2023.
Step #1 Assess where you are now
There are several methods available to evaluate your position in the China market, including reviewing marketing results, conducting a brand audit, and conducting consumer research. Let’s take a look at how your brand can do so.
Review your digital marketing result in 2022
Taking a look at how your marketing initiatives performed this past year can help you prepare for 2023. Identify what worked, what didn’t, and how to move forward before you make new ones. Ask yourself a few questions to assess the effectiveness of your current marketing strategy based on past marketing goals and results.
Example of a checklist:
- Have you achieved your previous goals? If not, why not?
- Do you attract relevant traffic to your brand websites or social media accounts?
- Have you been hitting your conversion goal?
- Which tactics did you try? What worked well? What didn’t work?
- Do your marketing and sales strategies align?
- Were you able to get all the resources you needed? Is there anything you might need to improve your results?
Most businesses see entering the Chinese market as a way to rapidly increase sales or as a place to try out innovative strategies. While this holds true to some extent for expanding into new domestic markets, entering China requires a much greater dedication and far more resources than the vast majority of enterprises anticipate. You can take the leap into the China market only if you and your brand are able to answer these questions positively.
Conduct a digital brand audit
Make sure your current marketing situation stays innovative and agile, and take time to assess it. The purpose of a brand audit is to analyze how the brand is performing compared to its stated goals and then determine where it fits within the wider market.
Consequently, methodologies will vary between industries and companies. In spite of the specific criteria you choose to measure, an audit should allow you to analyze your brand’s performance, Identify your strengths and weaknesses, ensure that your strategy aligns with the expectations of your customers, and know where you stand in the market compared to your competitors.
Some of the topics you may want to cover in your brand audit are:
Internal branding: brand positioning and differentiation, brand voice, brand values, brand culture, unique selling points, products, and services.
External branding: brand identity, brand awareness, website, advertising, SEO, social media matrix and performance review, eCommerce performance, campaigns, content marketing, direct and indirect competitors ranking.
Typically, a brand audit framework based on the research goals is set up, your sales performance are analysed, your social media performance are divided into, and your key competitors are benchmarked. Lastly, actionable insights for improvement are developed.
For example, data tools are used to collect a brand’s RED platform performance by interaction volume over a period of time or by KOL investment. To determine where the brand stands in the market, the data is benchmarked with those of other key competitors.
Consumer research
A business looking to enter China must first grasp the Chinese market and culture in order to achieve rapid growth in China. To be successful in China, you must first understand the Chinese consumer.
A clear understanding of the target audience is essential for brands to make their marketing and sales activities successful. Consumer research allows you to gain a deeper understanding of consumer demographics, attitudes, and behavior, consumer habits, consumption scenarios, consumer journeys, and consumer motivations.
This is so that you can improve your brand’s marketing strategies based on the 7Ps (product, price, promotion, place, people, process, and physical evidence) perspective. As a whole, the 7 Ps make up what is called the “marketing mix,” which is essential for any company looking to promote their goods or services. This is especially true with China.
Source: Louis Vuitton on WeChat
Here is one example of a brand doing their consumer research well. According to the 2021 TMI×BCG China Digital Luxury Report, there are more than 50% of consumers who use WeChat to discover and research luxury goods. Brands’ own WeChat mini-programs and shopping guide recommendations are able to attract consumers who spend a lot (annual consumption exceeding 300,000 yuan). Therefore, it is suggested for luxury brands to leverage Tencent’s WeChat ecosystem in order to benefit from the highly digitalized Chinese market.
This consumer preference has led to Louis Vuitton (LV) offering diverse WeChat mini-program stores that meet the needs of different customer groups, providing the ultimate online shopping experience. Louis Vuitton has launched more than five WeChat mini-program malls with varying designs and selections, to cater to different consumer groups and consumption scenarios.
Step #2 Identify what good looks like
For a brand looking to enter China, identifying what good looks like is important. Conducting competitor research or case studies can help your brand understand what good looks like in the China market.
Competitor research
While consumer research is typically prioritized during preparations to enter the China market, competitive research and digital monitoring are often overlooked. But since existing market competitors are already targeting the same customer categories, providing solutions for consumers’ pain spots, and satisfying expectations, competition research is crucial. Brands can find a path to expansion by doing in-depth analysis of their competitors.
Your competitive edge depends on knowing who your competitors are and how you can differentiate yourself from them. The following topics may be covered in the competitor’s analysis: key players, key competitors’ pricing, channels, performance, and benchmark marketing tactics.
There are two key methods when it comes to competitor research, primary market research and secondary market research.
- Primary market research method: surveys (quantitative, qualitative), focus groups, interviews ( consumers or experts), observation, product testing, etc.
- Secondary market research method: analyzing data and existing research to gain a deeper understanding.
Study other brands’ successes and failures
To identify patterns and causes of actions or decisions, case studies are needed to examine one individual, group, or event in depth. A case study method may involve observation, experiments, structured interviews, questionnaires, and/or documentary analysis to gather data. The results can help you know more about your main competitor and how you can compete with them.
Let’s look at the Audi ad plagiarism scandal PR crisis case as an example. An advertisement video for Volkswagen Audi was uploaded to Chinese social media at the beginning of this year, and the company was accused of plagiarizing content from a Douyin influencer. The video advertisement for the brand, which features the well-known actor Andy Lau, has resulted in a significant backlash from the general public due to allegations of plagiarism.
Source: Audi and Bei Da Man Ge’s Douyin accounts
Audi issued an apology to Andy and the Douyin influencer the next day for the “copywriting infringement”, noting that the London-based ad agency, Saatchi, was the one that produced it. Since then, the ad has been removed from all online channels. Both Lau and Saatchi have also released their own apologies.
Several days later, the influencers announced that he would give them permission to use his content. However, it was too late. Audi had already taken a reputational hit.
As we can see, in pursuit of the China market, foreign brands tend to market with China’s traditional cultural elements, especially during national festivals and special events. However, brands need to avoid the risk of copyright infringement.
Indeed brands could be held mainly liable for the below.
- PRC Advertising Law holds both advertisers and ad agencies responsible if their ads infringe other parties’ legitimate civil rights and interests (Article 68), which includes copyright. In other words, Audi, as the advertiser, was not exempt from liability even if it claims Saatchi was the one that created the advertisement.
- Civil liabilities can include stopping the infringement, taking remedial action, apologizing, and paying damages for copyright infringement. In the event that the above methods are not applicable, the court may award compensation amounting from RMB 500 to RMB 5,000,000.
It is therefore necessary for companies to fully understand China’s legal requirements and cultural identity before entering the market. Consult local counsel both from a legal and commercial perspective before hosting promotional events or launching advertisements.
Step #3 Find out how to get there
Identifying your goals and objectives is an essential part of strategic marketing planning. Setting SMART (Specific, Measurable, Attainable, Relevant, Timely) goals can be a great way to establish priorities, focus, and reasonable expectations. The possible goals for 2023 include launching new products, increasing social media traffic through paid media, launching an SEO program to increase conversions, growing brand visibility through branding campaigns, and improving customer experience. Then you can allocate resources that will be most effective for achieving your SMART goals.
For example, social media account goals and objectives can be defined from two perspectives: the specific purpose the brand’s social media serves, and the role it plays in the user journey.
According to social media functions, account goals can be divided into brand-breaking circles (recognized and accepted by a larger audience), brand-building, and grass-planting conversions. A user journey perspective(Awareness, Consideration, Purchase, Retention, Advocacy) can also be used to plan your social media account goals. It is possible to differentiate the role of platforms at different stages of the customer journey, which include discovery, interest assessment, purchase, repurchase, and recommendation touchpoints.
Brands need to identify their target audience on different social media platforms after setting goals. Ideally, the brand’s target audience portrait matches the platform user portrait.
Conclusion
It’s already November, and brands are busy planning for 2023. As mentioned, it is no easy task because of China’s incredibly diverse and complex consumer market. But there is tremendous potential for overseas companies.Adapting your digital marketing strategies to Chinese consumer preferences is vital for success in China’s consumer market. It’s crucial to have an effective digital marketing strategy in place if you wish to create better advertisements, reach your target audience with tailored advertisements, and track your business’ progress in 2023.
The three steps will help you optimize your digital marketing efforts based on Chinese market trends. First, take a look at marketing results, conduct a brand audit, and conduct consumer research to determine your brand’s position in China today. Then, analyze your competitors or study their case studies to benchmark your business against them. Lastly, setting marketing goals and developing a marketing strategy will help you reach your goals.
Alarice can help you prepare your brand and plan your China digital marketing strategy for the next year. If you need marketing research and strategy in China, China consumers research or more, feel free to contact us. We’re here to help.
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