Marketing to China? Look for non-obvious trends

What's cool in China nowadays? Welcome to the biggest question facing marketers today, and one that was explored at yesterday's MarketingPulse conference, organised by the Hong Kong Trade Development Council (HKTDC). Campaign Asia-Pacific was a media partner in the event.

'New China', political ideology aside, is cool. The market is strong enough to be a global powerhouse, said Viveca Chan, chairman and chief executive officer of WE Marketing Group. "In the next 10 years, the Chinese Dream is going to come true," she declared, echoing Chinese leader Xi Jinping when he in 2013 articulated a twin-goal for the entire country to ultimately renew national pride and achieve personal wealth. In the digital marketing realm that same year, China already became the largest e-commerce market in the world, Chan reminded delegates.

"President Xi said if you want to be the winner of the market you need to move with the megatrends," she emphasised. Obvious megatrends are the belt and road initiative, the rise of the middle class, the idea of a sharing economy and the phenomenon of new retail, she said.

While these are vital, they are also too obvious, Chan said.

Many experts talk about marketing trend forecasts, but everyone's predictions are similar, and most of the 'predictions' are already happening currently. 

Atypical, or non-obvious, trends will uncover new opportunities in China

'Enlightened consumption' is one, said Chan. It's nothing to do with French philosophy or religion though. It means how discerning consumers in China are, being empowered with more information about products and services than ever, she said.

'Disruptive distribution' is another, as traditional models of distribution get reinvented and brands seek more efficiency and build more direct connections with consumers. A Chinese competitor to Starbucks, Luckin Coffee, is one example. "Its 600 outlets really challenge the traditional view of location, location, location, Chan explained. "They were using big data to decide on their locations, based on a 'new retail' approach for coffee".

Chinese millennials don’t see themselves as ‘tourists’ but ‘global citizens'

80% of Airbnb users in China are under 35 years of age, said Mia Chen, head of marketing at Airbnb China. They, too, are balancing old and new value systems to make decisions on travelling, she said.

Chen cited a 2016 BBC poll where people are increasingly identifying themselves as global rather than national citizens. "Travelling is a process of becoming ‘global citizens’ and enriching themselves. This aligns with our own brand strategy."

"When we launched our Chinese name last year (meaning: 'to welcome each other with love'), we wanted to be good friends with our millennial users. To do that, we want to know how they live and travel. We want to listen to their hearts," she described.

For example, Chinese millennials today have mixed feelings about Chinese New Year. They have to go home, as part of traditions, but only to be bombarded with questions from their family, but they also want to go travelling to take advantage of the holidays. "This is a pain point," said Chen. "We suggested [with an ad campaign] that millennials bring their parents to travel abroad, outside of their hometowns. So they don’t have to spend their Chinese New Year stuck at 'home'."

A lotus leaf will cover the whole pond by the 30th day of growth

Pechoin (pictured above), an 87-year-old Chinese skincare brand, had outgrown its original pond, as millennials associate Pechoin with something their mothers will use. Needing to grow in new ponds, the traditional brand decided to reposition itself, and claimed a breakthrough in 2017.

Chihkai Huang, brand director of Pechoin recounted how the company went all out.

"We spent a lot of money on TVCs even though effectiveness has been lowering, but we are not after GRP only," Huang said. "At the same time, for cellphone screens, we produced content that didn’t cost us too much money. So people felt we are different. 

"Upgrading our products was very important. People are willing to spend more but also expect even more at the same time with value befitting the price. If we sell a product for RMB200, we want to give them value worth RMB400."

Huang referred to an adage that says a lotus leaf will cover a pond by the 30th day of growth. "Just like us, we were blossoming everywhere, by remembering our roots of oriental beauty and natural ingredients. How did we do it? Product quality. Accessibility. Display. Exposure," he said. "Customers are under no obligation to create a survival space for you; you have to grow."

Chewing gum is actually competing with WeChat

Applying Huang's vein of thinking to save the dire state of advertising agencies was 3water Li, founder of the quirky W agency based in Shanghai.

"Who are our competitors?" Li asked. "A lot of people think we compete with other agencies, like chewing gum competing with another gum brand. Not really. WeChat is actually the competitor of chewing gum. A lot of people buy gum when lining up at a store to pay, but WeChat has taken over their attention at the checkout line, resulting in fewer purchases of gum."

With the marketing ecosystem changing rapidly and experiencing disintermediation, W applied a hypermedia approach to its business model, said Li. W is an advertising agency, record company, concert organiser, movie maker (of motion-picture standard, Li emphasised), radio channel, overseas education platform and even bike manufacturer rolled into one.

While W has a lofty belief "in being a creator, not just a creative", but is also doing this to adapt to the complicated and diverse market in China, notwithstanding a gloomy prophecy. "Since the line between agency and client is blurring, we need to create inter-dependence and encourage everyone to solve a problem together. This is the only way out for our advertising future. Otherwise, we are doomed."