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Building relationships and brands in China

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Doing business in China can be a labyrinth, but understanding the cultural drivers behind it can be your compass. This guide explores key trends, consumer preferences, and cultural nuances to help you navigate the market successfully.

To achieve successful market penetration, here are insights from Leigh Howard, Chief Executive of Asialink Business at the University of Melbourne, who is recognized as one of Australia’s foremost authorities on international business.

Understand the consumer base

Despite economic challenges, Chinese consumers remain resilient. In a post-pandemic world, Chinese consumers have not traded down their lifestyle, instead they are becoming more selective in product quality and more sophisticated in their buying channels. Product or service localisation in China should ideally be supported with adequate research or consumer testing.

Key localisation considerations include brand, product features, prices and marketing. It is important not to lose Australian authenticity in the process of localisation.Older consumers in China now are increasingly utilising digital platforms for essential needs like grocery shopping and family communication, making them more accessible through online channels compared to the pre-pandemic era.

Chinese consumers are drawn to Australian products primarily due to their association with the perception of being clean, organic, safe, and authentic; attributes that have gained the trust of Chinese consumers. Chinese consumers are shifting away from the traditional 996 (72 hours per week) hard-working culture and embracing leisure activities like skateboarding, frisbee, and skiing. Consider cultural elements to your branding or marketing campaigns, Ensure the cultural elements are used in a way that is respectful to Chinese culture, history, and people. This is where brands can get it wrong.

How Australian business can capitalise

As Australian businesses seek to capitalise on the positive energy, an understanding of major trends and events in the region will prove pivotal for success. A focal point for this year will be the major elections taking place in Asia. Indonesia will be the first major Asian democracy to head to the polls on Valentine’s Day, followed by voting for South Korea’s parliament in April and Indian general elections by mid-year.

In contrast to other parts of the world, these elections are anticipated to deliver political continuity, allowing businesses to reaffirm their long-term commitment to the region. Closer to home, there’s a renewed government focus on Southeast Asia following the release of Australia’s Southeast Asia Economic Strategy to 2040, which is encouraging diversification to the rest of the region. Coupled with economic instabilities witnessed in China last year, Australian businesses are vigilantly watching opportunities in these markets. However, China remains an attractive consumer market, and the Lunar New Year period sees a massive spike in consumer spending.

Digital and social marketing landscape

Incorporating Chinese Key Opinion Leaders (KOLs) into a marketing approach is crucial for swiftly establishing consumer trust and enhancing brand presence. Chinese consumers, particularly among Millennials and Gen Z, exhibit a strong reliance on KOL recommendations, especially when it concerns new products like cosmetics, beauty items, and food, and turn to KOLs for reassurance through their reviews.

Douyin is the domestic twin of global phenomenon TikTok. Although the two platforms remain separate, and content is unavailable to access from their counterparts. At 700 million plus active users and growing, the explosive growth in content and user base owes to the rising Gen Z demographic and 5G connectivity. WeChat remains a vital marketing channel. Digital marketing in China is a specialised field, and it is recommended to always speak with professional digital marketing agencies.

Think long-term

Invest time to understand how business and regulations work in China. Know your own value propositions and the IP assets that underpin those values. Consider what brand localisation looks like and control the local version of your brand. Registering a trademark in English, means potentially being in a disadvantaged position if the local Chinese version becomes dominant in the market. Be proactive in protecting IP rights. Build a strong brand story and entrepreneurial profile that add layers and details to the brand.

A Unique Selling Proposition developed in the past may not work anymore in the post-pandemic era. Invest in market research to understand the nuances of customer preferences, needs and behavior, and localise offerings and strategy. Adapt to the changing trends. China is an attractive market that needs a long-term perspective and too often a business will stop after a short-term pilot. Don’t be that business.”

About Asialink Business

Since 2013, Asialink Business has helped thousands of Australian organisations and professionals seize opportunities in Asia.

To find out more visit www.asialinkbusiness.com.au

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