Lazy multinational brands take the Hong Kong consumer too easy as a benchmark for all Chinese. In Marketing-Interactive branding specialist Shaun Rein explains why that is wrong. And why the Chinese market is a tough deal for many multinationals, because of domestic competitors.
As consumer segments differ between Hong Kong and China, Rein believes it is not useful for Western brands to research Hong Kong consumers and extrapolate that knowledge to China, common for brands looking to use Hong Kong to springboard themselves into China.
“That’s taking the easy way out – people think because we’re all Chinese, it’s easy to apply knowledge of Hong Kong consumers to Chinese consumers. But the Chinese consumer is just different,” Rein said.
“For example, there is a customer segment of tai-tai‘s in Hong Kong but there is no exact same segment in mainland China.”
Instead, it is young professionals in their late twenties who have enormous purchasing power….
For multinational brands, it is common for the CMO to make decisions and generate content from head office and simply translate marketing materials and creatives into China in local offices.
This failure to take local consumer needs into consideration is exacberated in the context of fierce competition from homegrown Chinese brands.
As China is a big market, local brands are able to grow to a much larger scale, increasing their ability to take on multinational brands.
“Even though big brands such as Nestle dominate many industries in other countries, local Chinese competitors are best-of-breed and world-class brands in their own right,” Rein said.
“The Chinese government and private equity firms are also very supportive of domestic companies.”
This makes localisation of international brands a key part of the puzzle to staying ahead of local competition.
Rein believes China should account for a quarter of the business of FMCG companies and international brands should hire marketers based locally with an understanding of the Chinese market.
“The Chinese consumer market is changing much faster than Europe or the US, where consumer segments are fairly mature and segmented and easier to get to know,” he said.
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