Change is a constant when engaging with China’s fast-moving consumers. This is no static market – what worked yesterday may not work today, and tomorrow’s a different story again. ExporterToday editor Glenn Baker shares some of his takeaways from NZTE’s recent China Digital Marketing Conference at Auckland’s Pullman Hotel.
I received an email from a long-standing contact in Beijing. An ex-pat Kiwi who co-owns a digital marketing agency that assists foreign brands to successfully navigate China’s vast, often confusing social media networks.
Was I going to the China Digital Marketing Conference in Auckland on March 13? He asked.
Such is the importance of digital marketing when looking to gain a foothold in China – the NZTE-organised conference, with its strong line-up of speakers, had been noticed both here and offshore.
China is still seen as the big nut to crack and digital marketing is the science to crack it.
My Beijing contact was keen to get some feedback on the conference – his concern is that Kiwi exporters need to work with someone on the ground in China to truly understand what they’re dealing with, and keep up with the market dynamics – which are in a constant state of change.
I understand his concerns. Fortunately, most of the speakers were based in China and had extensive (ongoing) experience in the China market – with the exception of ASB economist Kim Mundy, who confessed she had never been there.
Mundy did, however, come armed with some useful statistics and facts about China to whet the audience’s appetite. These included the fact that China now accounts for 20 percent of New Zealand’s exports by value. And while the economy is slowing – the quality of that growth is improving – moving from investment-driven growth to consumption-driven growth.
Brand strategy was a major theme of the day – covered first by Andrew Kuiler, CEO of Shanghai-based, “insights driven” brand consultancy The Silk Initiative, which represents recognised brands from all over the world in the China market.
“[In China] there are sensorial experiences the consumer looks for that certainly wouldn’t work on the average Kiwi consumer.” – Andrew Kuiler.
In his talk, to inspire China brand success Keiler identified where the market opportunities currently lie for Kiwi F&B exporters. These include the booming health and wellness sector – a reflection of the current fitness craze in China. Think functional drinks, healthier snacks (away from rice and moving to grains, allergen-free and nutritional supplements), dairy and protein (‘fake’ protein is getting a bad rap), and innovative products that involve “thinking outside the box”.
“[In China] there are sensorial experiences the consumer looks for that certainly wouldn’t work on the average Kiwi consumer,” explains Kuiler. “It’s a way to break in and disrupt a category, and it works quite well.”
He says the brands making the big money on WeChat, particularly in F&B retail, are the ones that have gone viral; the ones that have connected to the Chinese culture really well.
Hey Tea (which features cream cheese on top of tea) is an example.
There are also expectations among young Chinese consumers of immersive experiences – Starbucks Roastery for instance. It goes beyond a good product and a brand story. Consumers want brands to help fulfil their lifestyle, help educate, help connect the story around the coffee bean, explains Kuiler.
Activation tactics are also important in China, and technology can provide that cut-through – help a brand stand out in a very large crowd.
Kuiler was keen to break down some of the Western stereotypes that still exist around the China market – many of which he first encountered while growing up in Australia. Packaging is a great example. Kuiler used the example of chocolate Tim Tam biscuits as a case study on how to successfully adapt a brand to the China market. In this case it was important to adopt a Chinese name. Often there is just one aspect of your packaging that won’t work in China, says Kuiler, adding that it’s not just ‘look and feel’, and colour, but even about the sound of a product’s packaging.
Look and feel is linked to people’s aesthetic preferences – which differs from country to country. “Australian ‘clean and green’ is very different to New Zealand or Swedish ‘clean and green’,” says Kuiler.
Linking a product to a hero occasion was also important – young female office workers wanting to treat their co-workers mid-afternoon with a snack.
Time for a rethink
Kuiler believes it’s time to rethink “China made easy”. Often it’s better for brands to target lower-tier cities where there is more opportunity to disrupt the market and succeed.
He also pointed out that the biggest brand you’re against in China is the “China brand”.
“China has its own dream and it is talked about everywhere – in the subways, on TV, in neighbourhood announcements,” explains Kuiler. Young people especially are incredibly proud of the country’s achievements and supportive of home brands. It’s not enough just about bringing a supreme product to market, he says, you have to bring your total A-game.
Think about the intersection between what the consumer really wants and what your brand does best.
Kuiler sums up The Silk Initiative’s philosophy when approaching China as producing brands and products with a particular consumer in mind.
His key takeaways on selecting influencers or KOLs (Key Opinion Leaders) to support your brand include:
- Ensuring clarity on brand positioning.
- Initially throwing a wide net and not jumping in too quickly (there are a lot of KOLs and many ‘cost a bomb’).
- Empower them; and vary content.
Summing up his morning presentation at the conference, Kuiler provided the following bullet points:
- Know where your brand should play and win. Are you in China for the short term or long term?
- Ensure due diligence, support, resource and funding. Don’t be cheap and fast.
- Have your category and brand ‘space clearly mapped and defined.
- Land a well-articulated ‘hero occasion’ and consumer target profile.
- Adapt the brand, product and packaging using local insight.
- GTM (go to market) distribution and comms strategy must be built on analytics.
- Engage reputable partners for in-market support to ensure ROI.
- Be prepared to learn and adapt.
Jordi Du, GM at United Media Solutions was first up after the morning break with some tips on how to use Chinese social media, work with KOLs and create a community of fans, and make some real returns on your social media investment.
Du explained that you don’t have to ‘think big’ in China, where there are thousands of social media apps, and where one million users is often the starting point on a single ‘smaller’ platform.
“In China more than 95 percent of Internet users go online using their mobile device; that’s the equivalent of 695 million people – more than twice the population of the US.
“Combine that with the fact that one-third of WeChat users spend more than three hours every single day on the site. It’s easy to understand how crucial social media is for consumer purchases.”
Du provided some valuable insight into Chinese consumer behaviour on social media, starting with the fact that in China there is a very low level of trust – so consumers will do a lot of online research and analysis to check out a new brand. They will seek information from within a trusted circle – often family, friends or perhaps a WeChat group – and look for an online KOL recommendation as well as a trustworthy and credible channel to source a product.
They may even go to the brand’s official website or channel to confirm the credibility of what they’ve seen so far, and to benchmark the price.
“So try to localise your website or official channel, and think about how you want your channel to function,” says Du.
He went on to explain how to build an online community through compelling and engaging content, and convert that community into sales. This can be achieved through the establishment of a WeChat (or Weibo) group which attracts people with common interests and backgrounds for you to engage with. Acquire fans through offline channels too – perhaps involving a cultural event, gamification or the use of trackable QR codes.
KOLs require careful selection; be wary of the “water army” (fake fans), says Du, and consider an omni-channel approach – you don’t have to stick to just WeChat and Weibo.
Content is the most important aspect of social media engagement, and must align with your brand’s values and identity, Du reminded the audience. “As well as entertaining your target audience, does [the content] represent your brand? Is it something people want to see, hear or read?”
It’s wise to segment your content and only push what’s relevant to each market within China – because each regional market is different.
There’s no magic formula for the frequency and timing of posts either, says Du. It depends on the product and audience. “Are they getting up at 7am and surfing WeChat or are they wanting to read an article before they go to bed at 10pm?”
Avoid posting at the same time as your competitors, he advises, and respect IP within your content – don’t use any unauthorised images or quotes.
Perhaps most important of all, respect the local culture and avoid posting sensitive material.
Maximise and recycle your content exposure outside the normal social media channels too, says Du – for example, through your customer service representative’s channel.
All this, and more
Ronan Gilhawley, Global Strategy Group and National Head of Retail for KPMG Australia completed the morning’s line-up of speakers and provided an interesting insight into online-offline integration in China, as well as pricing strategies.
He points out that in China cross-border e-commerce is the fastest growing segment within the e-commerce market – compared to domestic e-commerce. As for platforms – Tmall and JD.com are the leaders in e-commerce with more than 80 percent combined market share.
Not surprisingly, health-related products are the best-sellers in cross-border e-commerce, he says.
I liked his comment about the fact that everyone has been to China and made mistakes. The key is to connect with those people so mistakes aren’t repeated, he says.
Ask yourself – where do you want to play [in China]? Who do you want to play with? And how do you win?
All good food for thought as everyone headed to lunch.
The afternoon began with an interesting panel session, chaired by Glen Murphy, Regional Director of Great China at NZTE and covering brand building, social media tools, managing social media, measuring ROI on social media, channel partners, the retail landscape, and a whole lot more.
Then it was the turn of the Alibaba Group team, led by business development director (NZ) Pier Smulders to remind the audience of the sheer size of the ‘Alibaba Economy’ (dwarfing that of certain national economies) and the fact that, in China, “entertainment is shopping and shopping is entertainment”.
Smulders also spoke of the “new retail” market in China – the reinvention of retail, involving the coming together of both online and offline retail.
Alibaba has 400-plus New Zealand brands across its platforms – ranging from commodity through to lifestyle – and he explained how, through Alibaba Cloud Services, Alibaba is now a “data technology company” utilising AI in retail and AR (augmented reality) to help move product.
It was a slick presentation from the Alibaba team, and could easily have been the focus of a whole separate article.
Post afternoon tea, Damon Paling, NZTE’s Shanghai-based Regional Director of Greater China provided further excellent insight into China’s e-commerce business models, to round off a full-on day of knowledge sharing (regular ExporterToday followers will be familiar with Paling’s wisdom on the China market – built-up over many years based there).
As some people headed for the networking refreshments, and others to do battle with Auckland’s commuter chaos, I reflected on my one major lesson from this day-long digital marketing conference – the fact that what worked yesterday in China, may already not be working today.
The key for Kiwi export firms is to keep innovating.
Glenn Baker is editor of NZBusiness and ExporterToday.