Sales of big Western brands like Unilever, Nestle, P&G and Beiersdorf have dropped in China. Not a declining market is to be blamed – since people do not stop washing their hair – but e-commerce. Branding guru Tom Doctoroff looks for the Huffington Post at “the great leveler”.
The pitfalls are obvious. The country’s commercial terrain has always been transactional. Commoditization is an ever-present danger. Many still consider low price the ultimate weapon on dog-eat-dog commercial terrain. “Brand equity” is degraded as a theoretical abstraction.
Across China’s still untamed brandscape, e-commerce threatens to be the great leveler. Price comparison is instantaneous. According to Reinhold Jakobi, Nestlé China’s food and beverage managing director, “If we like or not, e-commerce will change our business. If you go online, everyone gets the same screen space.”
What’s more, China has entered the era of O2O, or offline to online marketing. Digital platforms wring further efficiencies from excess human capital to provide new — and cheap — services. For example, Helijia.com employs idle salon workers to deliver anytime, anywhere nail beauty service. Beequick.cn, a grocery delivery service, now covers more than 10,000 small communities across Beijing, Shanghai and Guangzhou. And Ayibang.com offers on-demand house cleaning.
But, if managed skillfully, digital commerce can enhance — rather than degrade — value perceptions. High-tech cheap tricks can morph into deep love. When marketers harmonize digital and offline assets, online transactions blossom into intimate relationships.
Salvation beckons on the higher plane of “cross-platform integration.” With alignment across digital and traditional channels, at every stage of the shopper journey, marketers kill two birds with one stone. First, the brand’s value proposition is reinforced at the point of purchase. Second, consumer confusion is mitigated. Both reduce price sensitivity. Both elevate margins.
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