EMW Global Insights: How to target Chinese consumers post-COVID

The COVID-19 pandemic has been a monumental life-changing event all around the world, but hardly any country was as affected by it as China. After around 3 years of strict lockdowns, the country is finally reopening, which means the world’s second largest economy is re-joining the global market. This analysis will identify changes in consumer behaviour since the pandemic and focus on how to target Chinese customers in this post-pandemic world.

Online vs Offline

As was the case around the world, China saw a significant rise in online shopping during the pandemic as consumers sought more convenient channels while in lockdown. Online retail spending increased from 10.63 trillion RMB in 2019 to 11.76 trillion in 2020, a whopping 10.6% growth.

This shift to online shopping was most noticeable in the purchasing behaviour for groceries. According to McKinsey, 74% of customers purchased groceries online during the pandemic. While on its own this is not a revealing statistic since this trend was felt around the world, it becomes interesting when combined with data about offline shopping. Despite widespread adoption of online shopping by Chinese consumers, 63% still enjoy the authentic experience of offline shopping, which indicates that this traditional medium will not be replaced entirely.

Online and offline retailing should not be viewed as direct competitors, as demonstrated by the fact that 60% of Asian consumers prefer brands with both online and offline channels. Therefore, combining the two provides consumers with a superior and more complete shopping experience as it allows them to physically identify the product they want in-store and pay online for convenience, akin to the ‘showrooming’ strategy used by Best Buy. Conversely, a product displayed on a brand’s website may pique the customer’s interest but lack the tangibility or detail offered by offline channels, such as trying on an item for size. While in the UK this has led to consumers ordering multiple items and returning those that don’t fit, leaving behind a larger carbon footprint, Chinese consumers value the interplay between online and offline channels, meaning brands looking to enter this market should view them as complementary to maximise revenue.

Chinese sportswear brand Li-Ning has demonstrated the value of nurturing both online and offline channels. They have a well-established offline presence with over 7,000 physical stores across China. While maintaining a competitive advantage through its offline distribution channel, Li-Ning has rapidly developed its online channels in recent years. Identifying WeChat, China’s most popular social media platform, as the ideal online channel, Li-Ning posts advertisements on the platforms “Friend Zone”. As is the case with online shopping around the world, as customers engage with the advertisements, Li-Ning’s data monitoring system records and evaluates the user’s preference, allowing for more targeted advertising. Additionally, once a purchase has been completed, the customer is automatically subscribed to Li-Ning’s WeChat channel where the brand announces the release dates of upcoming products. For limited edition products, such as their collaboration with Hongqi, Li-Ning use a random draw system, similar to Nike’s SNKRS app, where interested individuals sign up for a chance to purchase the product. Users have a higher chance of success when they invite others to participate, offering Li-Ning further online reach. This has given the brand a significant loyal following among the sought-after Gen Z consumers while maintaining their existing client base through their physical stores.

Corporate Social Responsibility

The COVID pandemic and lockdowns has resulted in Chinese consumers becoming more sensitive to social issues. As a result, significantly more importance is placed on corporate social responsibility and how much a brand gives back to the community. An example that effectively demonstrates the value of giving back to Chinese consumers is local Chinese sportswear brand ERKE, who donated 50 million RMB to the Henan flood relief effort in 2021. This led to the brand’s live streaming to attract a whopping 9+ million viewers, up from under 10,000 the previous week.

Conversely, Hive Box, a Chinese brand offering parcel self-pickup and drop-off services, earned heavy criticism when they didn’t demonstrate any corporate social responsibility during the pandemic. When lockdowns were implemented by the Chinese government, people were unable to leave their homes, let alone pick up parcels from their local Hive Box. During this period, the brand announced that non-members who leave their parcels in boxes will be charged 0.5 yuan every 12 hours. This move was understandably deemed tone-deaf and greedy, given how much people were already struggling at the time, bringing down a storm of public criticism and backlash on the brand.

Localisation

The importance of localising content is known around the world, but nowhere is it as pertinent as in China. Since the country has such a unique social media landscape, with platforms like WeChat, Douyin, Kuaishou and Weibo replacing the Western Instagram, Twitter, Facebook and TikTok. Therefore, it is not only important to localise content for the Chinese market, but brands have to adapt it for local social media platforms and know how to navigate this vastly different environment. It is important to keep in mind that localising content does not mean merely translating existing content, but rather creating new content tailored to the Chinese market. Due to significant differences in interests and culture, it is unadvisable to simply reuse content.

We at EMW Global have seen this first hand through our regional teams in China, who have worked with the Brazilian National team, Clube Regatas do Flamengo (both among the most successful teams in LATAM), as well as Liverpool star Roberto Firmino, and most recently Arsenal star Jorginho, adapting and creating content for Chinese social media while activating content for different partnerships. Due to the overwhelming differences to Western social media and lack of local knowledge, brands often require intermediaries who have the relevant expertise in this field as there are a plethora of pitfalls to avoid which can have catastrophic results for brand image.

However, a properly executed Chinese social media strategy can yield incredible results. We at EMW Global partnered football legends Gabriel Batistuta and Roberto Carlos with Douyin to create live streaming content during the 2022 World Cup. This was part of Douyin’s wider strategy to move into the live streaming and sports broadcasting space, and was very successful, resulting in 1.2 million and a whopping 7.7 million live viewers respectively.

Adaptation

Social media is not the only example of localisation that facilitates brands’ access to Chinese consumers. According to BCG, 59% of Chinese consumers consider the connection between products and local cultures to be essential. This becomes apparent upon analysis of foreign brands’ chosen name in China. While there have been many disastrous translation mistakes in the past, like Pepsi translating “Come alive with Pepsi” to “Pepsi will bring your ancestors back from the dead” or KFC translating their iconic slogan “Finger lickin’ good” to “eat your fingers off”. Brands now realise the importance of localisation and have put more thought into these important translations.

Some brands opt for a literal translation, such as Apple and Burger King who are known as 苹果(Píngguǒ) and 汉堡王 (Hàn bǎo wáng) respectively. Others elect a phonetic match for their Chinese brand name, which feels like the most uninspired route as no real meaning is retained in the brand name. However, this seems to work for major brands like McDonalds’s whose Chinese brand name, 麦当劳 (Màidāngláo) means “wheat serves as labour”, which doesn’t really describe the brand at all. A more interesting approach is choosing a translated brand name that effectively communicates the brand’s image and meaning. For example, BMW chose 宝马 (Bǎomǎ) as their Chinese brand name, which means “precious horse” while Canon went with 佳能 (Jiā néng) meaning “excellent capability”. Then there is Coca Cola, the undeniable winner of the Chinese brand name game. Though their first brand name meant "bite the wax tadpole" or "female horse stuffed with wax" depending on the dialect, after reserarching over 40,000 Chinese characters they came up with 可口可乐 (Kěkǒukělè), which is loosely translated to “happiness in the mouth”. What makes this so brilliant is the combination of phonetic similarity and underlying meaning to create a truly iconic Chinese brand name.

Furthermore, localised payment methods such as WeChat and Alipay greatly enhances the customer experience for Chinese consumers. Research indicates that over a quarter will quit payment when the payment process is too time-consuming. This is best exemplified by Alipay’s sponsorship of Euro 2020, through which they helped local merchants throughout Europe such as restaurants, hotels and service providers reach the Chinese customer base by integrating their service. This bridged a gap to Chinese tourists, allowing them to pay in their preferred method, thereby making them feel more at home and prone to purchases.

Looking Forward

In a world where China continues to grow in importance for global brands, understanding how to navigate this complex market and effectively target Chinese customers is more pertinent than ever. We have examined three major topics that are relevant to brands looking to capture part of the Chinese market, but this is by no means an exhaustive list. There are a plethora of cultural nuances that must be taken into account when addressing Chinese consumers. This is why partners who have this local knowledge and experience are becoming increasingly important and useful to brands.

We have explored the importance of maintaining both an online and offline presence, analysed the increased importance of corporate social responsibility in the wake of COVID-19 and attempted to identify key areas for localisation, including a rough guide to choosing a Chinese brand name. We hope this has provided at least a basic understanding of the fundamentals of transporting brands into China and what major pitfalls to avoid.

EMW Global has specialized over the last 5 years in localizing brands, whether they be fortune 500 companies, football clubs, national teams or global sports stars, in the Chinese market. So, if you found the information provided here helpful, and are looking for more information and advice, then please feel free to contact EMW Global. Having been founded in China and grown internationally from our hub in Shanghai, we have the necessary expertise to create or consult on China-facing marketing campaigns and projects.