Market opportunity assessment

Establishing a Sinocised offer

Localising marketing materials

Media relations and management

Targeted bespoke brand introduction and marketing events

How do we work with luxury brands wanting to connect with China?

Over the next few years, China will present luxury brands perhaps their largest growth opportunity, no matter their size or whether they plan to have a physical presence here or not. The number of Chinese who travel overseas will continue to increase, as will their disposable income and desire for luxury products and services. Whether you work for a brand that plans to open stores in China over the coming few years, or one that is known for its existing presence elsewhere, there are some essential marketing activities that must be implemented in China in order to establish the brand and its credentials and gain success.

Establishing trust in the brand is always the first step in China, no matter the size of the brand, and its ‘fame’ elsewhere in the world. Luxury consumers here already have huge choices so new brands must both establish their name and positioning very early on in the market engagement process. Recognition in China is about both reaching the end consumer and the potential distribution partner; you need them both to seek you out.

FDKG has specialist knowledge of marketing in China and the Chinese luxury consumers. Using a proven systematic approach we take our clients through a series of stages of the brand building, trust and engagement cycle to build a solid foundation from which to grow.

The diagrams shown pictorially demonstrate the stages of the system, in the case of brands planning to attract travelling consumers completing all activities listed will complete a positioning cycle, for those with a plan to open direct or in-direct stores in China, the combination of activities would be tailored to their specific needs.

The attraction of the Chinese market is its diversity and size. While market growth opportunities still exist for brands with strong investment capabilities to expand into the 2nd, 3rd and even 4th tier cities, an opportunity equally exists for affordable luxury brands to grow their popularity with the affluent and middle class Chinese consumers. However the current slowing of the market growth requires an understanding of the competitive landscape, and more thought as how to differentiate brand perceptions in order to maintain growth.

With so many Chinese consumers travelling to purchase abroad, a door is opening for those brands currently non-resident to establish their name here. The investment is not small, as media costs here are generally high, but this path to fame is well trodden and the default for any brand wanting mindshare from domestic consumers. There is no way around it, and just assuming that the travelling Chinese will either find your stores, and as unlikely, come in and spend money with you is naïve.

Market opportunity assessment

China probably offers luxury brands their largest growth potential in terms of both the domestic opportunity, and that of its travelling consumers. However, effectively assessing that opportunity requires an independent and unbiased approach, and should be based on strong current and historical local market knowledge. Trying to do this from a distance, or without spending enough time studying the market will not suffice.

We at FDKG are able to provide both the detailed local knowledge and experience, and the independent and impartial approach required to deliver market opportunity assessments to luxury brands that review all or any of the following:

  • Market size and growth potential
  • Provide an analysis of the competitive landscape
  • The current business model and its performance
  • The target consumer, and their expectations
  • Future growth potential and the brand expansion landscape

For those brands with limited or no exposure in China, the changing marketplace represents a real opportunity to enter China or establish the brand name clearly in the eyes if the Chinese consumer, but understanding the market they live in is critical. Even for those brands aiming to find a distribution partner in China, they should have their own independent understanding of the market and its potential, before discussions commence.

Examples of our work: • Market opportunity and entry assessment

The slowing of domestic consumption in 2012 does perhaps hide another factor affecting the market; that of increased consumer knowledge. As a nation, the Chinese can learn things very fast, perhaps not in a way that we might in Europe and the US, but still they learn by watching and listening to what they are told by brands and others they respect and trust. Last year was no exception on this rapid learning curve.

For new brands entering China, or those aiming to attract the travelling luxury consumer, they must stand out from the crowd, tell engaging stories and position themselves appropriately. Above all, they need to be consistent in their actions and demonstrate commitment to China.

Establishing a Sinocised offer

China is a unique market in almost every market sector, and often works in ways that can be almost the opposite to other geographies. The cultural values and drivers are different, and in fact for most brands the USP’s they consider their real differentiators, may have limited relevance in China, yet the things they think of as of limited value, is highly regarded here.

Success in China will involve identification of those attributes that will make the brand shine in the eyes of the consumers and creating sinocised stories and messages that tell the appropriate brand story and magnify its values in Chinese are critical. FDKG works with its clients to identify the key attributes of the brand, create the localised messages required, and choose the correct Chinese words and expressions that add culturally correct value to these messages. Importing the brand wholesale, and delivering literal translations does not work.

This process involves our depth of cultural understanding and cooperation between our staff and the management of the brand, the better we understand it, the better we can express it and the stronger the sinocised offer.

Speaking and writing in English is now quite common in China, at least in the tier one cities, but what is said in Chinese to get a particular message across is not in any way a literal process of translation. Identification of China specific product values and benefits, and their inclusion in websites and other collateral is essential if consumers are to be hooked. The general immaturity of the majority of Chinese luxury consumers means that making communication obvious across all marketing materials is the only approach.

Localising marketing materials

After seeing a brand mentioned in the media, or hearing about it from friends and family, the next place any Chinese consumer will look on the Internet to verify that the brand is genuine. It is therefore important for all luxury brands to have Chinese friendly pages on their websites. These pages do not need to be overly complex, but communicate localized messages, heritage and establish a vision of the brand in the eyes of the visitor. If the site is to drive travelling Chinese to purchase outside of the country, it needs to tell them where and how to find the point of purchase, and show that this really exists and has a physical presence. Product imagery is very important, and will reinforce brand perception and value in the viewer’s eyes.

The absence of a physical presence in China will require the production of some specific marketing collateral that can be used to demonstrate the physical embodiment of the product. Although many Chinese read and speak English, local language materials ensure consistency of message, and avoid confusion. They will also be used to show others, and will act as the basis of word of mouth communication.

Social media is important in China, as can be witnessed when sitting in restaurants and coffee shops where Chinese middle, upper middle and wealthy consumers sit using their phones reporting their thoughts and activities throughout the day. Recommendations and comments from friends and family on Weibo are extremely influential in the sales process for all brands around the globe, and a strong presence and following can create enormous positive PR and drive consumers to websites and physical points of presence.

Our team establishes Weibo sites for brands and posts content in Chinese on behalf of our clients, it also creates localised content for websites and collateral based on agreed messages as part of its comprehensive service.

We might all assume that as a 7 star hotel the Burj Al Arab might not feel that it needed to target any one-consumer group because of its status and fame. However, it appears that even the mighty Burj will work hard for the Chinese. It recently announced that to celebrate Chinese New Year, it would offer authentic Chinese dining, and music, and will light up its exterior with Chinese characters on February 10th to celebrate the arrival of the year of the snake.

The efforts of the Burj have not gone unnoticed in the Chinese media; as a result the hotel can expect some great free PR even amongst those who could not afford to stay there but aspire to do so one day. The free Metro Express paper handed out on the subway today has a front-page image of the hotel with a computer-generated image of the Chinese signage superimposed on its towering façade.

Media relations and management

Being seen in the media regularly is an initial and necessary stamp of approval for any brand wanting to sell to China as consumers consider that if a brand can get into the media, it must have either the necessary money to invest or the reputation to be trusted. This rule applies whether the consumer is to buy in China, or elsewhere in the world.

On behalf of our clients we work with traditional and new media to tell the agreed brand stories and have them published and repeated by consumers in conversations online or face-to-face once they have been read. By knowing and understanding our clients and their key attributes, we regularly meet with the media to gain maximum coverage in print and on the Internet.The result of this activity is to build brand awareness, and by repeated visibility, greater status for the brand in the eyes and a place in the heart of the consumer.

Chinese luxury consumers want to connect with a brand and establish a sense of association with it in their hearts, if they cannot achieve this they will not have a desire or need to visit your store anywhere in the world.

Examples of our work: • Press

Our recommendation is firstly to plan smaller events that are exquisitely executed in terms of detail and content that are educational and informative, and make those in attendance really engage with the brand. These events are not about selling, but delivering lifestyle advice and imparting information on a very personal basis. Those attending will not only feel special, but they will look at the brand differently, expressing those unique feelings to their network of friends, and so the engagement continues. At large events by comparison, individuals are not recognised, and it is almost impossible to impart any form of knowledge or deliver a meaningful experience to anyone.

Targeted bespoke brand introduction and marketing events

For brands planning to enter China, it is important to test consumer sentiment about the product, and carry out pre-launch promotional activities for the media and groups of influencers. For those brands that plan to attract Chinese luxury consumers to their stores or hotels, there is also a need to the demonstrate product in China and/or communicate the brand attributes and values personally, as this will be taken by both the media and consumers as a commitment to the country.

In the past, all the luxury brands with a presence in China have held large and very expensive parties and product launches to which large groups of consumers and the press are invited. The attractiveness of these events to consumers has waned and now they regard smaller, more personal experiential gatherings as a sign of respect from the brands.

FDKG plans and runs this style of event as part of a brand promotion or product introduction plan. We select appropriate venues, formats and content that fits the positioning of the brand in China and its goals. We can also invite the media and luxury consumers of the appropriate status to the brand in order to maximize the ROI as much as possible. In the case of service brands currently not based in China such as hotels or department stores, the event may be a very high quality dinner in a top hotel during which guests receive an informative introduction to the brand. For those with product, the event is often a chance for the guests to get very close to it as a means of establishing their initial desire.

Examples of our work: • Events