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Never presume or assume in China; perception is very much the basis of their reality

In a country like China, presumption and assumption are difficult states of mind to adopt if you want to be successful; particularly because nothing is ever clear in communication with the Chinese unless it is explicit and often its not. Culturally, leaving things in a state of ‘grey’ is quite normal, and there is an unwritten sub-text that is understood by locals, and that we foreigners take years to come close to interpreting. Most of us have gathered throughout our lives that perception is often the basis of reality. However, perception in China is the only thing that determines how you, your brand and anything else you work on is seen and evaluated, often actual facts are carefully ignored.

Most foreigners tend to presume that the international brands that we all know and are familiar with, are equally well recognised by others around us, and therefore we assume that the values and attributes of that brand are universally recognised the world over. It has always amazed me over the many years that I have worked in this sector in China, how many senior executives of globally recognised brands come here and assume that the populous both knows the name of the brand, and somehow has an existing affinity for it. The big news for them every time is that China is a blank canvas, and whether you are a multi-billion dollar conglomerate or a relatively new start up; you all have no choice but to start in the middle kingdom from exactly the same place.

Of course the investment levels differ depending on the size of the business and its targets, but basically the process is the same. The great thing about the blank piece of paper is that, those within the organisation who establish the China strategy potentially have a free hand to communicate just about any message they choose to, and in fact an opportunity exists (and is often taken up) to completely change how the brand is seen here verses its perception elsewhere across the globe. Taking a brand that sits in the premium or fast fashion sectors internationally, and selling it as luxury in China has been done more than once!

Investing in perception and avoiding presumption

Well before a brand new to China actually sets foot on the soil, it needs to have established a perception in the eyes and minds of the Chinese people through positioning online, and via print and social media. What people read or hear has a huge influence on whether the brand or product is accepted in general, and how it is seen and compared to other more established names in the same sector. As in all markets, the bigger the competitor in the eyes of the Chinese, the more effort is required to affect positive perceptions.

The country is littered with examples of those who got it wrong and presumed one thing, without actually taking into account the power of perception in a country where it plays a huge part in general society. The following is an classic example that I’d like to share with you.

Like many growing sectors in China, alcoholic drinks, and in particular wine represents a huge opportunity for any brand, producer or even growing region from across the world. Drinking wine and sharing it with others demonstrates taste, status and of course wealth to the Chinese, but in the majority of cases, those doing the drinking have little or no understanding of wine culture. Of course, this is not a bad thing, but it leads to the inevitable influence of perception, and he who manipulates perception in his favour wins, at least at that point. This is where France and the French made the first bold moves.

To the Chinese, France is the home of the best wine, and perhaps there is an element of accuracy in this view, depending on your own experience and knowledge. This situation is a result of French vineyards and brands repeating and reinforcing their message over and over, or at least for as long as it took for some Chinese consumers to absorb it, and then repeat it to others. Now, I am not a wine expert although I do like a glass or two, but I myself might have more faith in French wine than that from elsewhere in the world even with my greater knowledge. However, to consider wine from countries other than France is a challenge for any Chinese to master having been told that ‘French is best’ enough times to believe it, and to fear that to support product from other countries might present a great loss of face or a sign of ignorance. If the wine you choose is not from a French producer, you are already at a disadvantage!

Having said that I am not a wine expert, I do know a moderate amount about the subject to enable me to select reasonably good wines when required to do so. Product from other European countries would be included in my choice, together with those from the new world. I was therefore pleased about six months ago to see a new wine bar/store open close to our office in Shanghai selling only those wines from the Piermonte region of Italy, a territory I am reasonably familiar with and whose wines I personally like. I cannot however, say whether the region itself, or an entrepreneur with specific connections to this part of Italy, had established the store.
The choice of the physical location was good, in that it was in the right part of the city, but what was completely absent was any attempt to explain where the wine came from, why it was good, and why people should try and buy it. In fact there appeared to be a perception by the owners and staff that Chinese people would just walk through the door, sit down and order wine that could have come from anywhere across the globe. Often I would walk past the premises after leaving the office in the evening when other local restaurants and bars would be full of those enjoying a drink or a snack, yet this place was always empty; clearly something was wrong.

Needless to say, the continued lack of custom, apparently due to poor marketing meant the place closed some weeks ago, and Chinese people missed out on an opportunity to try some great wine from somewhere other than France.

Tell them who you are, where you’re from and why you’re great!

I compare marketing to a dating show; you need to show or tell the person you are trying to attract about yourself so they start to build a connection with you. For luxury brands, by telling them where you are from, they start to reinforce images they have of that location (assuming it’s a good one), and of course, don’t hold back in telling them why you are so great. At that point the ingredients are in place for them to potentially fall in love with you.

In this example, the people behind the wine bar certainly appear to have failed on all counts to do any of these things. What we have to consider is that even for those of us who are foreigners, the choice of wines in the world is huge, and we cannot be expected to know every grape, region, vineyard and producer unless we are a serious wine buff or we work in that specific industry. I doubt that too many non Italians would know much about the wines of Piermonte, or be able to name (m)any, so this bar/store needed to tell its potential clientele a story. The story needs hooks that in this case would be geographic, involve famous wines from the region such as Barolo and perhaps some historical references that give it longevity.

Putting the name of the region on the door and having bottles on view is neither exciting nor different to make what was an important retail space stand out, most independent wine bars do this anyway. Given the sales success of Italy in China covering sports cars, to pasta and luxury goods, making sure those passing the door could see the product inside was Italian would have helped, there was no ‘draw’ to the uninitiated. Even if Italy struggles with France in the wine space, using the countries strong sectors that the Chinese know about to support its less known one’s would really help.

Perhaps the biggest failing of the owners was to start in the wrong place. As I have pointed out, the bar/store didn’t clearly state many things about its origins and quality, but above all, there was a failure to establish perceptions even before a bricks and mortar presence was established. If you want the Chinese consumer to know who you are, what you stand for and why you are so great, tell them via the traditional and digital media first, and do it repeatedly for long enough! A one-page advertisement will be seen and barely acknowledged, but repeated sightings in print and online will establish a perception of strong investment, reliability, quality and many other attributes. Consumers will start talking about the brand and asking where they can buy it.

At this point, open your store and not before.

Building foundations in China will develop sales elsewhere in the world

The last point to make here is that by establishing a reputation with Chinese consumers in China, a brand does not need to set up shop in China itself, those with money spend more when outside of the country than they do in it. If they start to recognise your name and fall in love with it, they will seek you out when they take their holidays, or travel on business. The brand building and awareness will be developing, and you haven’t had the expense and hard work of opening a physical presence in China!

Perhaps five or more years ago, relatively few Chinese travelled internationally, so every brand needed stores in China to monetize their investment and publicise their brand, but today everyone from 18 year old students to 60 year old grandparents travel, and buy items for their own consumption and as gifts for friends. The people will come to you if you have got the basics right and consistently delivered a message that they can understand and empathise with. Of course there is no guarantee of sales by spending marketing budget in China, but if you don’t do this, most people will tell you that you can guarantee that you will not sell much, if anything to the travelling Chinese.

So don’t panic about opening stores in China if you haven’t already done so. Be consistent in how you talk about the brand to guarantee its perception in terms of positioning, spread the word on social media, online and in magazines and ensure the middle class and affluent consumer in China can find you when they travel, the rest will come. When sales from those who travel is sufficient enough, invest in building your physical presence in China, and not before, it won’t pay for itself. Above all, don’t assume or presume anything here but invest in establishing a perception of the brand, even if its different from the way it’s seen elsewhere on the planet.


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