China Marketing Weekly: Entering China Market Requires More Consideration Than Ever Before
In China, we’ve entered the holiday gauntlet! The Mid-Autumn Festival just ended and Golden Week is just around the corner. Mid-Autumn may be all about family, but Golden Week is considered a travel week. Being one of the longest holidays of the year, second to Lunar New Year, most Chinese travel - to both domestic and international locations. Mid-Autumn was a hot season for e-commerce sites; Golden Week is a peak for hotels, airlines and tourist sites, etc.
On The Blog
This week, Lu-Hai continues discussing what innate advantages Western brands have in China. Chinese companies are quick-learners (look at Xiaomi) and they certainly keep up with overseas competitors. Unlike twenty years ago, it’s much more difficult now to win Chinese consumers’ hearts. So, what attracts Chinese consumers to foreign labels? Read here.
Mid-Autumn is one of China’s most popular holidays and represents reunion and family unification while traditionally watching the moon and eating “mooncakes.” It’s a great time for brands to get creative, and mooncakes are often the focus. Of course, mooncakes are available year long for less than $2 USD, however, in the last decade, the treats have evolved into a very pricey commodity. They’re gifted to employees, business partners, and previously even considered a kind of bribe. Both domestic and international brands promote themed and exclusive mooncake sets during the Festival. This isn’t limited to food industries- Starbucks sold sets for 50$, but some of the more luxurious are sold by The Peninsula Hotel ($80) and were even promoted by Becky Li, one of China’s biggest KOLs.
Ironically, mooncakes aren’t liked by many. The craze doesn’t reflect Chinese love for pastries - but rather their love for displaying social status.
Most of the ads rolled out for Mid-Autumn Festival relate to two themes: mooncakes or the moon itself. As the number of ads in China, both on and offline, are innumerable it’s difficult to find an ad lacking creativity or beauty. Here are some foreign brands that got a lot of attention online:
China-Sweden conflict heats up. Following the incident where police removed Chinese tourists from a Stockholm hotel, the Chinese Embassy and China-based netizens accused Sweden of racism. Later, a satirical news segment on Sweden’s national network teaching Chinese tourists how to behave abroad heated up Chinese tensions. The video was also posted on Youku (read more in English).
This isn’t the first time a European country was criticized for the handling of Chinese tourists- last month, a Swiss resort introduced a separate train for Asian tourists after complaints about their behaviour (source in English). Meanwhile, foreigners in China are only allowed to stay in hotels with a special permit allowing foreigner lodging...
However, just as Sweden announced they will temporarily stop deporting Uighurs to China, the conflict may grow even more fierce.
Counterfeit dealers may benefit from Trump’s new tariffs. The new restrictions imposed on goods like fashion accessories or leather/fur materials have just been executed. The 10% rate will increase to 25% by January 2019. However, counterfeit products don’t go through the same channels as regular or luxury products and are therefore likely to skip the fees. - Read more (English)
How will the new e-commerce law affect popular platforms, like Taobao? It protects users from low-quality and counterfeit goods and forces e-commerce platforms to make sure the products comply with related intellectual property laws and regulations. The platforms will be held responsible for any issues - therefore they’re likely to improve verification processes. What’s more, unlike JD.com, Taobao and Pinduoduo don’t rely solely on well-established brands. Any small seller or a family business can open a Taobao store. Prices are often low - merchants rely on cheap-labour with no insurance and don’t pay taxes. The new law aims and ending that - and the higher costs may close many businesses. - Read more (English)
Today’s Headlines introduces its own mini-programs. Early on, it’s only available on Android. Mini-programs are ways to keep users inside the app longer and monetize them - they offer an in-app Alipay feature. The mini-program applets open in a new tab within the app making the browsing experience smoother for users. What does it mean for brands? Increased visibility and opportunity to reach potential users based on keywords they search, as well as a higher chance for users to convert. - Read more (Chinese)
The Forbidden Palace releases a series of themed bank cards in cooperation with China Minsheng Bank. The cards feature memorable royal Qing Dynasty family members and works as a usual credit card, but if used inside the Forbidden City, other features and discounts are enabled. For example, if the card application process is started through Luckin Coffee’s ad, and the card is used at the recent Forbidden City location, the user receives exclusive discounts.
The card is promoted via a well-designed WeChat mini-program featuring Qing Dynasty-style video. - Read more (Chinese)
Lesson here? Chinese consumers truly love exclusive offers. Western brands that can incorporate Chinese culture into its products with limited-time offers are very likely to catch a lot of attention. Higher creativity means more shares.
Starbucks started its official delivery service in Shanghai and Beijing, cooperating with Ele.me. Other cities should offer the service before the end of 2018. It’s part of last August’s signed deal with Alibaba. So far, Starbucks’s beverages were available for delivery via third-party company. - Read more (in Chinese)
Want to know more about Starbucks’s marketing strategy in China? Check our recent blog post.