WE Communications 26 Jun 2018 // 10:00AM GMT
While a decade ago China was known to be the “world’s factory,” manufacturing everyday household goods for companies across the globe, in recent years tech and internet companies have redefined the face of Chinese industry. Both Tencent and Alibaba are now among the world’s top 10 most valuable companies. Indeed, Chinese companies are now leading the way in the most disruptive global tech trends, including autonomous vehicles, machine learning and blockchain. According to Deloitte, global CFOs’ optimism about the Chinese market has never been higher. But all this innovation has come with a side effect: Chinese consumers’ expectations of brands and businesses have risen to match the market’s optimism.
WE Communications’ Brands in Motion study uncovered these elevated expectations after looking at 10 rational and 10 emotional drivers of consumer opinion across eight industry categories in six countries: Australia, China, Germany, South Africa, the U.K., and the U.S. More than 3,000 consumers and 1,000 B2B decision-makers were surveyed in each market.
Chinese respondents indicated an optimistic market that trusted in brands and industries. They were by far the most likely to say that a category is socially beneficial, and China had the highest average scores across all rational and emotional drivers. Contrast this to the U.K. market, which tends toward low rational and emotional scores and a pessimistic outlook.
But a rosy outlook comes with raised expectations for brands about what constitutes innovative and groundbreaking products.
China’s upbeat outlook is all the more striking when compared with consumer attitudes elsewhere in the world. “With its thriving economy, China is looking at the next five years with a strong sense of optimism,” said WE’s Penny Burgess, managing director, China, who cautions that while that optimism means opportunities, China is a highly complex market. “Consumers here are sophisticated and desire the highest standards of innovation and quality. In many areas, we’ve surpassed western markets when it comes to technological advancements, so brands need to understand not only the heightened expectations of consumers, but also the rapid changes in how media and products are being consumed.”
Brands looking into entering the Chinese market need to recognize that standards for innovation vary, and localizing your innovation message is key. Consider utilizing local research firms or agencies familiar with the market’s particulars to get a head start. We’ve also found that cultivating a startup mentality can be helpful. The quicker a brand can launch a product in China, the quicker it gains brand recognition — this goes against the western preference of researching, prototyping and iterating until a product is perfect.
There’s never been a better time to enter the Chinese market — but it’s also never been more challenging. Do your research, fine-tune your innovation story and zhù nǐ chénggōng!
Learn more about WE’s Brands in Motion research.