As the world’s second-largest economy and a major hub for international trade, China presents an enormous business opportunity for brands looking to expand globally. However, navigating the complex Chinese market can be daunting, even for the most experienced brands. That’s why we are thrilled to announce our new partnership with Hot Pot China. This leading digital marketing agency specializes in helping international brands with their market entry in China. With our combined expertise, we are well-positioned to support brands seeking to join this dynamic market. In this blog post, we spoke with Adam Doffman, Marketing Manager of Hot Pot China, to discuss how our partnership can help your brand successfully enter the Chinese market.
Q: Why should a brand consider entering the Chinese market?
Brands should consider China because of the enormous opportunity it represents. China’s potential is vast, especially compared to other parts of the world where GDP values are declining, and consumer confidence is low. While China may not be experiencing the same double-digit growth as in previous years, the country’s GDP is still experiencing a robust rate of expansion. China’s market remains in a very healthy state of change as The Economist forecasts a 5% GDP growth this year.
Q: How does the Chinese market differ from the Western market? What does the competitive landscape look like for fashion brands?
Chinese shoppers are very knowledgeable. They’re constantly seeking out the newest and most distinctive trends and are thrilled to endorse any brand or product they have confidence in. Consumers have a level of sophistication but are also actively looking for brands to surprise and delight them and tell their friends about. Some 3 major differences between the two markets are:
- Digital Platforms:
China’s digital platforms differ entirely from the West. Some of the most popular platforms are Douyin (TikTok application for China), Weibo, Wēixìn (WeChat), and Xiaohongshu (Little Red Book). All four platforms offer distinct content and provide different ways for consumers to engage with them.
- Consumer Journey:
Chinese shoppers consider the pre-assistance phase very important, especially with the many apps and platforms. This phase holds immense significance as it sets the tone for the rest of the journey. Consumers seek a vast level of involvement from brands and retailers in the run-up to the purchase. One statistic showed that pre-assistance purchase is the case in 80% of online transactions. When you compare that to the Western consumer purchase journey, the Chinese consumer journey is much more individual and lone.
- Cultural Expectations:
The third significant difference is the cultural expectations Chinese shoppers have, that is, what they put importance on. In the Western market, many brands focus on sustainability and purpose in their messaging. Although it may seem crucial for specific Chinese consumers, it’s a relatively insignificant factor in most cases. Our agency has recently conducted some extensive research on footwear consumers. The results showed that consumers prioritize style and comfort over sustainability when choosing footwear. This is also true in terms of the broader fashion categories. Consumers have different priorities and expectations, which also apply to other sectors.
Q: How should a brand navigate cultural and linguistic differences?
The Chinese market has different cultural, linguistic, and business practices, and many brands forget to appreciate them. Our first tip is to embrace the challenge rather than avoid it. That’s the mindset a brand needs to have. In addition, research and insight are required to navigate these differences. Before starting to work with brands, we suggest understanding Chinese consumers’ preferences and behaviours qualitatively and quantitatively for the best results. At Hot Pot China, we’ve formed a unique group of Chinese consumers known as our “Cultural Intelligence Community.” We work closely with this community on different projects aimed at helping brands expand into China.
The second tip we suggest is to take a localized approach. As a brand in China, it is essential to do so. Although we may acknowledge cultural and linguistic differences between Western and Chinese consumers, we must also recognize that significant variations exist between the demographics in Chinese provinces and regions. For example, Heilongjiang in Northern China is very different in terms of climate, culture, and expectations compared to Chengdu in the Southwest. Different cities in China, like Beijing and Chengdu, have varying lifestyles, expectations, and quality of life preferences.
For our third tip, we advise the brands we work with to take a localized approach and look to brands doing it well. For example, Shake Shack recently opened their store in Chengdu and ran a localized campaign. They used local language and slang, common themes, and cultural symbols that are specific and popular in Chengdu. Additionally, they created a branded Mahjong set, which played well with Chengdu natives. Shake Shack’s localized approach acknowledged the local Chengdu culture rather than viewing the market as a monolith.
Suppose brands truly want to connect with a diverse range of consumers. In that case, it is essential to conduct in-depth research to gain a deep and comprehensive understanding of their audience’s unique characteristics, including their location, region, and even province. Employing a localized approach in this manner can deliver positive results. By committing to these strategies, brands can better position themselves to connect with their target audiences and establish meaningful relationships.
Q: What experiences does your agency have working with brands entering the Chinese market? What successful fashion brand launches did your agency manage?
With our extensive expertise, we can guide brands in their venture into the Chinese market and lead them from penetrating the market to launching winning marketing campaigns. Some of the top successful fashion brand launches that our agency managed are Canada Goose and La Perla.
Q: How does your agency provide opportunities for fashion brands to enter the Chinese market?
Our agency takes great pride in offering our clients expert insights on the latest opportunities available. Whether it’s from a channel perspective or the perspective of reaching your target audience, we provide informed guidance that you can trust. Our diligent research methods ensure that we always stay ahead of the game in identifying new opportunities to help your business succeed. Our consumer research shows that a certain brand in a category may be popular amongst a specific subculture in a Chinese city. We also observe how consumers use specific platforms to engage with content uniquely and make purchases. We’ll use all our insights and data to identify and share market opportunities with our clients.
Q: What channels do you recommend to reach Chinese consumers?
The objectives and insights determine the appropriate channel for your brand. At our company, we frequently collaborate with Key Opinion Leaders (KOLs) and social media influencers. We possess a wealth of expertise and know-how in leveraging leading social media platforms such as Douyin, Weibo, Xiaohongshu, as well as video-sharing portals like Bilibili. Our expertise is wide-ranging across all the major digital platforms.
Q: What qualities and strategies should a fashion brand have to succeed in the Chinese market?
One critical factor that Chinese consumers cannot overlook is the quality and design of your product or service. This aspect is paramount as it greatly influences what they consider essential and affects the reviews and recommendations they pass on.
Secondly, having a brand story and an emotional narrative behind the brand is essential. Consumers want to be spoken to in a way that resonates with their culture. 65% of Gen-Z customers want to emotionally connect with brands, even if they’re from different cultures and have brand stories unrelated to China.
Lastly, ensure that your brand’s marketing tactics are on the right platform to meet the Chinese consumers you want to target. It’s no good having the right messaging and conveying an emotional story if it’s not in the right place where consumers are. Our agency is here to assist you by providing expert advice on the most effective digital channels for your marketing strategy.
Q: What kind of products and collections do consumers in the Chinese market look for? How can brands differentiate themselves?
There is a growing demand for luxury and exclusive products, resulting in many fashion brands creating collections exclusively for the Chinese market. A noticeable trend is the increased focus on high-quality and comfortable designs. Additionally, as mentioned earlier, localization and curating products to suit the need are also desired.
Q: How do you measure and analyze the success of a fashion brand launch in China?
Our agency’s core focus is ensuring the success of the brands we work with by striving for excellence and achieving optimal outcomes. We aim to go above and beyond the marketing metrics we deliver to our clients for campaigns. We always strive for tangible commercial results and measure success from a commercial success point of view. That said, the Chinese market is not something we perceive, and we often tell our clients that it is not a quick or short-term ROI driver. It requires a long-term mindset and approach to profitability for future growth.
Furthermore, we see the marketing campaigns we run for our clients as innovative ways of measuring success from a tangible ROI perspective. We examine our sales and marketing data, focusing on key indicators such as impressions and views, to discover correlations and trends that connect our marketing efforts with our investments’ results.
Q: What ongoing support does Hot Pot China provide to fashion brands after their launch in the Chinese market?
We specialize in helping brands enter the market by creating a detailed five-year plan that analyzes profit and loss opportunities. In addition, we offer ongoing support as a part of our product offering in the guise of the 3 products that we offer:
- Digital Marketing and Offline Marketing Execution:
Our company specializes in establishing long-term partnerships with brands to manage their marketing budget in China effectively. We have expertise in various channels and can proficiently execute marketing strategies to ensure maximum impact.
- Standalone Research and Insight Projects:
At our research team, we provide tools that help brands gain a profound comprehension of their target audience. These valuable insights can be utilized to refine and enhance their overall marketing strategy, providing a much more impactful and rewarding approach for businesses. We help brands make better business decisions by conducting research projects to help them decide on important things like pricing and messaging. Hot Pot China is dedicated to providing brands with the necessary tools and knowledge to succeed in today’s competitive marketplace.
- Influencer Management:
We have great expertise in sourcing and managing KOLs within the Chinese market and have an extensive influencer network.
Our partnership with Hot Pot China represents an exciting opportunity for fashion brands looking to do business in China. With their in-depth knowledge of the local market, consumer behaviour, and marketing, combined with our global experience and industry matchmaking, we are confident that we can provide brands with the support they seek to enter and succeed in the Chinese market. Don’t let the complexity of foreign markets hold you back any longer – contact FNAD today to learn more about how we can help your brand grow and expand into China with our partner Hot Pot China.