The Chinese market is evolving fast. It has maintained a healthy economic growth, huge market size and consumption potential. Moreover, factors such as maturing consumer psychology, new emerging consumer groups and the fast-evolving digital ecosystem are further bringing more opportunities for development. Giants in the tech industry like Baidu, Alibaba and Tencent (BAT), have played a crucial role in promoting China’s digital ecosystem. By deftly capturing market opportunities paired with strategic vision and diligence, they have helped China’s digital ecosystem break boundaries. The progress spearheaded by these tech companies can account for the first half of China’s digital transformation.

Digital transformation has now entered the latter half as traditional enterprises start to flex their muscles.

In China’s unique digital ecosystem, almost all brands existing in the Chinese market (local or international) are embarking on their digital transformations to some extent, and many have discovered a unique path in China that differs from anywhere else in the world. Compared to other regions, China openly welcomes digitization. This is mostly driven by CEOs of national corporations, who are more inclined to prioritize external customer-oriented factors such as consumer experience and e-commerce that would serve to benefit their businesses.

From Haier, Midea, Pechoin to Lining, national and heritage brands alike are embracing and exploring the potentials of this digital technology. Even foreign brands like Oreo and Dyson are also constantly adjusting their digital strategies to meet the needs of the local Chinese market.

Adapting the Brand-Building Model to Win

Under this backdrop, brand building in China is at a crossroads. Many enterprises are looking for new ways to build and develop more meaningful connections with consumers.

The brand management theories originated from the West and the best practices of multinational companies cannot apply to the development of the brand in the Chinese market. Many companies in China ignore the importance of brand building and exploit digital marketing tools at the expense of brand equity, in hope of quickly capturing the attention of consumers and increasing sales in the short-term.

In short, brands need a new brand-building model to succeed in China today.

The new model applies the core components of traditional marketing – targeting, positioning, planning, activation and engagement – but changes how these concepts are achieved. We call such an upgraded model the META model, which stands for the Maintain, Evolve and Transform Approach.

This model examines the following:

  • The thinking and construction methods of brand building in the digital age
  • The needed changes
  • The degree to which the change is elaborated and demonstrated

Using its steps, marketers in China will be able to modify their approach to brand building to successfully navigate the current challenges and opportunities in the market.

Maintain a Clear Brand Positioning

A brand’s positioning should clearly define what the brand stands for, why it exists and what value propositions it can deliver to consumers. New technologies should not and will not change the need for brands from a strategic perspective—whether it is for business in the Chinese or international market, traditional manufacturing company or new economy digital firms.

One thing remains unchanged: a brand positioning should understand the consumers’ emotional and functional needs and be communicated in a clear, authentic, trustworthy and relevant way. Achieving this will not only define but also deepen the relationship with consumers.

At the same time, while foreign brands should maintain a fundamental brand truth that is both universal and consistent, its brand positioning should also be localized and adapted for different cultures. In China, while a brand may have a unifying global reason-to-be,  its positioning must speak to the unique local needs. And this is only possible if a company has developed a true understanding of local consumers and cultures.

Louis Vuitton, as a luxury fashion label that started in manufacturing travel luggage, has always stayed true to its traveler spirit in its brand positioning. This core positioning has remained consistent in Louis Vuitton’s brand communication as well as product launches for decades. The digital age did not weaken its brand positioning; it has provided many opportunities for Louis Vuitton to better communicate the traveler spirit through new media channels and new partnerships. For example, the brand utilizes WeChat to provide its customers with personalized travel stamps and has formed partnerships with companies such as Mobike to use geolocation technology to better promote the meaning of travel to its audience.

Final Thoughts

Cultural, economic and technological changes in China have created an extraordinary opportunity for both local and multinational companies. But the old way of doing business is no longer delivering results. Our META model, in partnership with Alimama, can help companies adapt their brand-building strategies for today’s unique Chinese market.

 

This article was published in the September 2019 edition of the CEIBS Business Review. Read the original article in Chinese on the CEIBS website.

Download the full whitepaper to learn more about the META Model and stay tuned for our following articles in the series, where we will explain how to Evolve and Transform the brand-building methods for China in the digital age.

Contact us to learn how you can apply the META brand-building model to your company to unlock growth in China.

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