United States, European brands face Chinese consumer

Beijing – China economic slowdown Do not discourage American and European brands from reorganizing their strategies to reach Chinese buyers.

Instead, the attraction of the second largest consumer market in the world forces companies to adapt to the growing competition from local brands.

In the case of Kraft HeinzBringing more people to China to buy ketchup this year has also meant the hiring of a local agency to help create catchy campaigns – decorate columns of the metro station to imitate ketchup bottles and promote condiment like a new touch on a popular dish: eggs and sautéed tomatoes.

It is a difficult market to approach, even for the marketing company based in Shanghai Good Idea Growth Network (GGN). The agency experienced at least five different waves of consumer trends during its 14 years of history, said founder Stephy Liu, Mandarin, translated by CNBC. “The gameplay continues to change.”

But GGG even succeeded after rejected an offer to acquire the British WPP advertising giant, said Liu, noting that around half of its customers are foreign brands.

Although Kraft Heinz has not yet finished in its China Ketchup campaign, the company reported net sales in the second quarter in the emerging markets 4.2% climbed A year ago, helping to compensate for the drops in North America.

WPP explored a potential acquisition of GGN but did not end up going far in the process, according to a person familiar with the discussions.

Kraft Heinz did not immediately respond to requests for comments.

From Starbucks’ difficulties For the successes of Lululemon in China, it has become clear that the right mixture of location is essential.

“Among international brands in China, winners often devote more than 40% of marketing income, in particular platform content and marketing, while iterating products depending on market data,” said Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, which helps foreign brands in China.

This year, Cooke said that Under armor Created products at less than 100 yuan ($ 14) in order to attract a mass of online buyers, while using live flows with dedicated users and then build fitness communities and sell more premium products offline.

Douyin, belonging to Bytedance, has become a force of electronic commerce in recent years since celebrities and companies have started to use the application to Live sales During the pandemic. And by figures, there is no questions to know that jumping it in the world Xiaohongshu and Douyin is worth it for businesses.

Adaptation to this new ecosystem of social trade has become the biggest challenge for brands in the past two years, said Liu de GGN. “Foreign brands will think:” Isn’t it only Tiktok? “”

She warned that success requires a complex strategy that can involve changing everything, how a team is structured with the types of products sold. But gain is important.

“In a half year, it can help you sell more than you have sold (Alibaba‘s) Tmall in two years, “said Liu.

In addition to social media, a critical factor in the strategies of many companies is access to hordes of data on what consumers in China buy.

Chinese electronic commerce platforms, including Alibaba’s Tmall, share much more data on what is popular than Amazon.com The fact, said Cooke of Wpic. In China, “people generally know what their competitors sell and for which they sell.”

With this granular data, the Chinese makeup journal Perfect Diary was able to succeed by identifying a point of pain on the market and by creating a lipstick targeting this lower price segment, said Cooke. He noted that foreign brands have also forced foreign brands to create specific products for China, a big change in the past five years.

The platforms of electronic commerce in China also often show approximate figures on the number of orders placed by product, while third-party companies such as Synun offer large quantities of classification of products and other online sales data for free.

In the case of AppleThe launch of the iPhone 17 of September 19 is the Chinese Electronic Commerce company JD.com published sales data for mainland China. The electronics-focused platform announced that the first minute of pre-orders in the iPhone 17 series had exceeded the pre-order volume of the first day of the iPhone 16 series from last year.

Apple’s story also underlines how it is possible to Reignite Local Interest Despite the loss of market share due to domestic competition. Some Beijing customers told CNBC that they liked the new iPhone Cosmic Orange color, and that more premises intended to buy their first iPhone this year, as they had heard of new attractive features such as the biggest internal storage.

Chinese factories quickly jumped on the trend, releasing iPhone cases with a similar orange shade even before the model 17 was released.

“Winning brands are those that have created local R&D centers and field products teams,” said Ashley Dudarenok, founder of Chozan, a marketing consulting company in China. “This allows them to identify early trends, develop products adapted to local needs and launch them in months, not years. This is an important departure from the past, where global products were often simply deployed on the Chinese market.”

Even with the right data and social media platforms, cultural integration becomes more and more important, especially as Chinese brands find success By pressing the own history of the country of craft craftsmanship.

“Brands go beyond superficial heads to Chinese culture,” said Dudarenok. She stressed that Loewe had joined Jade Carving Masters, while Burberry has teamed up with bamboo weaving artists.

And despite Decrease sales on the Chinese luxury market,, Lvmh This summer opened a catchy ship in Shanghai – immediately generating a lot of local buzz.

Unlike the LVMH luggage store in Manhattan, the site of Shanghai draws from the history of the Chinese city as a port of entrance for international travelers in Asia about a century ago.

The new store also captures the roots of the European brand in hand -made travel trunks – which contrasts with the inability of Chinese brands to offer the same emotional appeal, Joe Ngai, president of Greater China in McKinsey, underlined in a Linkedin Post.

“As Chinese customers develop in their confidence and their desire for local elements,” he said, “creating more crossings between the West and the East is one of the unique opportunities for multinationals in China.”

– Eunice Yoon de CNBC contributed to this report.