China market entry: 3 tips on how to get it right first time
Written by Andrew Kuiler, Managing Director @TheSilkInitiative
The Silk Initiative (TSI) is your brand bridge to the fast-evolving food and beverage consumer in China. To ensure your brand’s China market entry reaches its full potential in this complex and dynamic country, here are three considerations that you simply cannot afford to ignore:
1) Don’t just replicate – what worked at home, won’t work in China
After it became the first foreign fast food company to set up business in China in 1987, KFC has since become the largest restaurant chain and one of the most powerful non-Chinese brands in the country. Unlike its closely guarded secret recipes, one of the main ingredients in the company’s successful market entry into the world’s second largest economy is well known – localization!
In fact, failure to refine the global strategy as needed to meet local China market needs is one of the major reasons why global brands fail in China.
Can you guess which US brand’s ten most popular potato chip flavors adapted for the Chinese market include cucumber (#9), blueberry (#7) and lemon tea (#6)?
Click here to find out.
2) Invest in consumer immersions – there’s no better way to understand the people who engage with your brand
Spending the time to do deep consumer immersions is the only way to uncover attitudes and perceptions and reveal insights into consumers’ lives, habits and preferences. Through consumer immersions, you get to capture a slice of people’s daily lives first hand. By observing and accompanying them, in their homes, in their work places, in various social settings, you find out what really makes them tick.
In a recent project for a major US meat company, TSI was engaged to help the Client learn which needs are most important in the purchase of certain products, and what triggers and barriers exist that drive or deter this.
During the consumer immersions we conducted, we uncovered how Chinese consumers evaluate what’s trustworthy and found that product safety is one of the key drivers. This is a particularly timely insight in the wake of yet another China food safety scandal in the news recently, this time about how meat, some of which apparently originated in the US, was being injected with bleach to make it appear bigger and juicier.
3) Engage the right partners on the ground
China not only has great physical diversity, being one of the top five countries in the world in terms of land mass, but as a country with at least seven distinct, mutually intelligible dialect groups, of which Mandarin is one, it also has massive cultural diversity. This means that a “one-size-fits-all” approach to any China market entry is doomed to fail.
You simply cannot design the right approach from your overseas head office. You need people who are attuned to local conditions and who have knowledge of cultural and environmental factors that influence purchasing decisions. With their help, you can gain an in-depth, fully researched understanding of Chinese consumer behavior and adapt your marketing mix to suit local differences.
When a major US breakfast food brand engaged TSI to develop a pipeline of snack products to launch in China, we conducted consumer immersions in 4 key regional cities. Maybe you already know a little about traditional Chinese medicine (TCM) and its concepts of how certain foods produce inner heat or have cooling properties? With our help, our Client learned how subtle differences exist between young urbanites in top tier cities with regards the extent to which these TCM philosophies about food inform their purchasing choices.
For example, beliefs about how certain types of seeds and fruits popular in breakfast meals increase inner heat in the body are potential barriers to the purchase of certain products depending on whether you are male or female, which region of China you’re from, and what time of year it is.
Only with levels of insight like this, can you make the right decisions about your brand strategy and product offerings for a successful China market entry.
Want to get a copy of our free eBook in which we share more incredible insights from the hearts and homes of Chinese consumers? All you have to do is email us with your biggest unanswered question about how to get your food or beverage brand ready for China market entry.