Winning Chinese consumers: The challenge

"Doing business in China is not a sprint, but a Long March."

Operational challenge
 
  • Countless mid-sized companies with excellent quality products and a solid, partly family-run background are eager to profit from the potential in China, but the hurdles are high:
    • Without profound China competence, strong distribution, excellent visibility and target group-oriented communication measures, Western brands in China are failing
    • Doing business in China is complex, challenging and costly: High expectations quickly turn into deep disappointment
    • The Chinese market is ultracompetitive, dynamic and heterogeneous
    • Brands from all over the world compete against each other and against local brands to win the favor of Chinese consumers
    • Lack of access, networks and expertise
    • Market entry costs with local company foundation and staff are disproportionate to the expected initial revenues
    • The later the market entry, the higher the penetration costs
    • Chinese brands are gradually conquering world markets and attacking the home markets of Western brands
  • The alternative classic export model with local distributors has strong operational and strategic constraints:
    • The potentials and success factors in China remain a "black box"
    • Geographical distance and time lag hinder professional and permanent steering and control of local partners
    • No continuous observation of the market and competition
    • Arranged "sight-seeing" during headquarter management visits give a distorted picture of reality
    • Numerous local distributors lack a deep understanding of brands, their values ​​& unique selling points; lack of responsibility and awareness of the importance of corporate identity as well as low level of creativity and innovative spirit for brand building
  • To win a country with continental dimensions like China, one exclusive distributor for the entire country is never enough. Only a nationwide network of highly performing well connected distributors in the most important cities and sales channels leads to the long-term exploitation of potential and sustainable success
Bei dem klassischen Exportmodell bleibt der Zukunftsmarkt China eine

Cultural challenge
 
"Hide a knife behind a smile."
Sunzi, Stratagem No. 10
 
  • China is the opposite of the West, intercultural misunderstandings are inevitable
  • Relationships and networks are key success factors
  • Brand building starts from scratch for many companies: Many of the most popular and well-known brands in the West have 0% brand awareness in China
  • 5,000 years of uninterrupted cultural history characterize the socialization of consumers and largely determine factors such as purchase behavior, preference system, benefit expectations, habits of use and taste perception
  • Relevant Western USPs are only conditionally applicable in China: Re-evaluating the positioning, the benefits and reasons to believe
  • Checking if brand and product values are accepted in China and in what way content can be transmitted effectively
  • Risk: Language and writing with 50,000 characters, 400 syllables and four tones are an additional hurdle
  • The culture-specific meaning of colors, shapes and symbols opens up a wide field for wrong decisions