China’s vast consumer market, in particular its e-commerce channels, which accounted for approximately £1.1 trillion of purchases from nearly one billion internet users in 2024, are an attractive proposition for many global consumer brands, including those from the UK. The UK’s e-commerce sales totalled £97 million in 2024, making China’s total market ten times larger, although spend per capita is only around half of that in the UK.

Many of both the marketing channels and points of sale – from TV advertising and subway billboards, through to retail stores and online platforms – look similar, but are sufficiently different to derail strategies which have not been sufficiently localised. Whether online or offline, understanding the variance in routes to market, consumer behaviours, and consumer preferences of China versus the UK is vital for any retailer looking to achieve breakthrough success.

Digital Journey: Marketplace vs DTC

Online sales represent just over 30% of total retail sales in the UK, versus a slightly higher 37% in China. However, the digital shopping habits of these two nations’ consumers are shaped quite differently.

Many UK brands launch to market through a direct-to-consumer (DTC) strategy, creating an optimised, highly converting website, and driving traffic through social media campaigns and search engine marketing, email marketing, and affiliate activity. This offers trackable ROI, reduced overheads, and a direct relationship with customers – all attractive qualities in a go-to-market strategy for brands.

China, meanwhile, has a separate digital ecosystem, which has created a different user journey for customers. Rather than on a search engine, consumer search typically starts on either a marketplace, such as Alibaba’s Taobao or JD.com, or on social media platforms such as Xiaohongshu (Little Red Book) or Douyin (Tiktok). Many of these platforms operate in silos – making effective tracking of marketing investment more challenging. Chinese consumers are also accustomed to the convenience of shopping on marketplace apps or indeed natively on social media apps, with almost no sales occurring through brand-operated standalone websites.

Consumer Behaviour: Trust in Recommendations vs Trust in Brand

Chinese shopping behaviour has been shaped by a cultural preference for receiving personal recommendations from trusted sources – whether family and friends, celebrities, or in the digital age, Key Opinion Leaders (‘KOLs’). Gen Z and millennial shoppers, who comprise 65% of China’s online consumers, rely on KOL recommendations and peer reviews on platforms like Little Red Book. Trust in brands is built through social proof, with 80% of Chinese shoppers citing user-generated content as a key purchase driver. This has also driven the inexorable rise of livestream shopping, with livestreamer talent vouching for quality and providing real-time replies to customer queries during their streams.

In the UK, trust is more commonly built through relying on online review sites like TrustPilot – used by 75% of online shoppers – or in physical retail settings through brand partnerships with trusted retailers such as John Lewis. Heritage retailers such as Fortnum and Mason can rely on centuries-old reputations for quality. Influencers play a different role – often brand discovery among younger consumers – but consumers are often wary of content that is seen as too commercial from online stars they follow.

Cultural Nuances

In both the UK and China, aligning your brand with consumers’ daily lives and cultural habits can be a powerful way of building loyalty. Differences in the cultural calendar – Christmas vs Lunar New Year, or the different timings of Valentine’s Day for example – are the basic building blocks of a localised marketing calendar.

Centring Chinese faces and voices as part of any campaign is vital to creating a deep connection. Chinese beauty consumers, for example, seek reassurance that the products are adapted for their skin tone and specific skincare needs, and fashion aficionados want to be sure that garment sizing has been properly adapted.

Cases of marketing messaging which has fallen foul of cultural values – from campaign fails from brands like Dolce & Gabbana, through to backlash for global positions taken by brands like H&M on Xinjiang cotton, demonstrate the need for careful localisation and planning for any player entering the Chinese market.

Functional Retail vs Retailtainment

Many shopping districts in the UK – from retail parks to high streets – prioritise the functional, and above all, sales. Brands rarely venture outside of their niche or dedicate expensive retail floorspace to non-commercial goals, although more integrated O2O solutions, such as click-and-collect, a preference of 60% of shoppers, is starting to bring the digital revolution to British high streets.

Chinese stores are increasingly experiential, and many major brands view them as a marketing channel first and sales opportunity second. From the explosion of pop-ups offering immersive brand experiences, through to stores converted into brand-focused exhibitions, which centre storytelling around brand history and values, and the incorporation of cafes into luxury boutiques, China’s retail environment is at the cutting edge of store design and function.

Malls, meanwhile, are competing for footfall with increasingly entertainment-focused offerings – from trendy restaurants, through to more unusual offerings such as equestrianism experiences. These offers supplement the shopping options and increase time spent in-store, improving both customer experience and sales performance.

Marketing Investment Strategies

In China, marketing investment is heavily skewed towards digital advertising, with social and KOL work taking up approximately 60% of total budgets, versus around 40% in the UK. China’s fast-paced digital environment means users expect quicker reactions to trends, and rapid new product development and launch.

Livestreaming is a perfect example of China’s need-for-speed. This sales channel, which has become the main growth driver of e-commerce sales in China in the past five years, offers merchants an opportunity to generate huge sales in a matter of minutes. However, opportunities to partner with high-profile livestreamers emerge and disappear quickly, with only brands with sufficient light-footed adaptability able to take advantage.

The golden 60:40 rule for allocation of brand marketing versus performance marketing in the UK has shifted towards a preference for performance marketing in recent years – with the ratio now close to 50:50. In China, brands have over-invested in performance marketing – with the ratio closer to 25:75, during the boom years of online e-commerce. In a lower-growth environment, we’re seeing brands shift their focus to longer-term brand building, favouring customer loyalty over continually acquiring new audiences at scale.

Key Takeaways

Brands looking to succeed in China’s competitive consumer marketing landscape in 2025 must ensure they understand their customer journeys, localise their messaging and marketing materials, and work with market experts to navigate a nuanced and sophisticated market. Building long-term success relies on aligning your brand with consumer needs, and a long-term commitment to nurturing customer relationships.

Jack Porteous is the Commercial Director at TONG Global (www.tong.global), a marketing and strategy helping bands to connect with their Chinese customers. Follow him on LinkedIn (https://www.linkedin.com/in/jackporteous/) for more insights on China’s consumer economy, digital ecosystem, and marketing ecosystem.

The post What Are the Key Differences Between Marketing to the Chinese and UK Markets? appeared first on Focus - China Britain Business Council.

This article summarises the key themes from the report, highlighting how British brands can adapt to a more cautious yet still opportunity-rich environment.

China’s economic slowdown: What it means for marketers

After decades of near-uninterrupted expansion, China’s consumer economy has slowed significantly. A growing middle class once fuelled seemingly boundless growth; now, many consumers are becoming more selective, cautious, and value-conscious. According to Totem, 2024’s consumption growth was described as “glacial”, with e-commerce sales growing modestly (12-15%) and physical retail suffering widespread closures.

British brands that are used to betting on China’s lower-tier cities for rapid growth must now adapt. Strategies in 2025 are shifting towards performance-driven marketing, precision targeting by generation and income tier, and a renewed focus on return on investment. Expansion for its own sake is being replaced with prioritised spending and cautious optimism.

Digital marketing in China: Where to invest in 2025

Despite broader economic pressures, China remains a global frontrunner in digital commerce and marketing innovation. Social commerce in particular, spanning livestreaming, influencers (KOLs), and beyond, is proving resilient. In fact, over half of surveyed brands plan to increase their social media budgets in 2025, even as overall budgets shrink.

This presents an opening for UK companies with digital expertise. Brands that understand the local tech landscape and can tailor their approach to Chinese consumer behaviours across platforms like RED, Douyin, and WeChat will be best placed to succeed. Notably, the focus has shifted from generating hype to fostering confidence and trust, underscoring the importance of credible content and community engagement.

Sentiment and spend: A reality check

The brand sentiment going into 2025 is cautious. Totem’s survey found that only 17% of marketing leaders were optimistic about the year ahead, while nearly half expected to cut their marketing budgets. Most brands are narrowing their focus to proven channels and core customer segments. Spending is being redirected away from traditional media and toward performance-driven digital and social commerce tools.

For British brands, this shift calls for prudence and agility. Success in 2025 will mean doing more with less – delivering measurable returns and tightening the link between marketing activity and sales performance.

Gen Z in China: A key demographic for British brands

One of the most significant strategic pivots in 2025 is the move from city-tier segmentation to generational targeting. While Gen X and Y still drive purchasing power, it is Gen Z that increasingly shapes trends and brand perceptions.

Despite youth unemployment and rising disillusionment, China’s Gen Z remains curious, digitally fluent, and trend-driven, often supported by family safety nets. They seek novelty, relevance, and authenticity in their brand engagements. British brands can win here by aligning with Gen Z values such as sustainability, creativity, and personal expression.

The report recommends that brands without a clear demographic focus consider making Gen Z their “anchor audience” – not just for the short-term gains but to build long-term brand equity.

Emotional branding: Standing out in a price-sensitive market

As discounting becomes widespread, foreign brands, which are often at a cost disadvantage, must lean into emotional resonance to justify their price points. Totem identifies three emotional levers that particularly resonate with Chinese consumers: humour, nostalgia, and escapism.

Gen Z, in particular, is seeking moments of escape – from Covid-era constraints, economic pressures, and digital fatigue. Meanwhile, older consumers find comfort in nostalgia and familiar quality. British brands are well-placed to tap into these emotional triggers through rich storytelling, cultural references, and brand heritage.

In 2025, it’s not about being louder – it’s about being more meaningful. Emotional relevance will be a key differentiator.

China retail trends: From malls to pop-ups

A fascinating new trend is the rise of “swarms” – crowds that converge on specific retail activations or pop-ups driven by online buzz, especially via platforms like RED. These gatherings offer excitement, community, and value, an antidote to social isolation and screen fatigue.

For British brands, this creates a compelling opportunity to rethink their physical presence in China. Instead of long-term leases in traditional malls, think short-term, high-impact brand activations that create sharable, offline-to-online experiences – tea ceremonies, fashion events, or VR demos rooted in British culture could work especially well.

UK-China trade and market entry in 2025

The global context in 2025 is fraught with uncertainty. The return of Donald Trump to the US presidency has reignited trade tensions, with China likely to retaliate against American brands. Some experts foresee closer economic ties between China and non-US markets, including Europe and Canada.

For post-Brexit Britain, this presents both risk and opportunity. UK brands that position themselves as independent and constructive partners to China may find a window to strengthen bilateral trade relationships, particularly as Chinese authorities look for trustworthy foreign partners.

The long-term view: Strategic optimism

Despite the short-term headwinds, Totem’s report ends on a cautiously optimistic note. There are signs that China may emerge from the downturn ahead of other major markets, especially if government stimulus and private-sector confidence gain traction. The return of tech figure Jack Ma in late 2024 has also been read as a symbolic gesture of renewed support for innovation.

For British brands, the message is clear: don’t retreat from China, but refine your approach. Targeted, digitally savvy, emotionally intelligent strategies will serve brands well in this next chapter.

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Emotional marketing: Connecting beyond the product

In recent years, the importance of building emotional connections with consumers has gained prominence, especially for brands targeting younger consumers. Products that offer emotional fulfilment, such as hobby-related purchases and even blind boxes, have become central to the purchasing logic of Gen Z. During the Singles’ Day shopping festival, surveys showed that more than 40% of young consumers prioritised emotional value when making purchasing decisions.

Brands can tap into this trend by creating products and marketing campaigns that resonate emotionally with consumers. A strong example of this is brands finding a way to speak to female empowerment, an increasingly important topic among China’s younger generations. Jack Porteous, Commerical Director, TONG Global (who will be speaking at the UK-China Business Forum on 5 March), points to Aesop, which leveraged its International Women’s Day campaign by spotlighting a diverse range of female authors and distributing their work. This type of meaningful storytelling aligns with consumer values and aspirations, enhancing emotional connections and brand relevance.

Building trust to appeal to cautious consumers

Economic uncertainties and shifting social attitudes have led to more cautious consumption patterns among Chinese consumers. A type of “luxury shame” has emerged, where individuals refrain from luxury purchases (or at least showing them off) due to economic slowdowns and government crackdowns on extravagant displays (including shutting down the social media accounts of influencers considered to be flaunting their wealth). Consequently, consumers are becoming more discerning, opting for value-retaining, recognisable luxury items over trendy purchases.

To build trust and demonstrate value, brands should focus on transparency, quality, and sustainability. Communicating the enduring value and craftsmanship of products can appeal to consumers seeking long-term value. Moreover, aligning with cultural values and offering localised products can enhance brand relevance. That being said, brands should avoid superficial attempts at localisation, such as merely adopting traditional Chinese motifs for the Lunar New Year. Stanley Mugs, for example, failed to create a meaningful connection with the festival in their Chinese New Year collection. “British brands should first be confident to express their own brand identity and what makes them unique, localising the tone and presentation to best suit a Chinese audience,” Porteous advises.

Understanding niche consumer segments

China’s consumer market presents a unique blend of tradition and innovation, with opportunities across multiple sectors. The country’s evolving consumer behaviour is guided by trends toward wellness, premiumisation, and lifestyle enrichment, driven by urbanisation and changing family structures.

A recent report by WPIC Marketing +Technologies highlighted the beauty, personal care and fashion segments, which have shown robust growth in 2024. Driven by post-pandemic demand, beauty product sales increased by 6%, personal care by 2.3%, and fashion by a remarkable 14.4% in 2024. This resurgence is accompanied by trends such as creative makeup, scientific skincare, “quiet luxury” and athleisure wear.

For early-stage brands in the market, brand relevance means finding the right channel and having an extreme focus on their niche – connecting the brand’s proposition to a consumer need. More established brands can focus on building community as a way to establish deeper relationships. Porteous points to Brompton Bicycles as an example of a brand that has done this well, hosting a “Brompton World Championship” in China in 2024, which leaned into the lifestyle aspect of the brand and fostered a passionate community.

The key role of social commerce

Social commerce has become a crucial component of China’s digital retail landscape. Platforms like Xiaohongshu (also known as RED or Little Red Book) and Douyin have successfully integrated e-commerce with social media, allowing users to seamlessly share and read product experiences and make purchases within the app. Unlike traditional e-commerce platforms, many of which emphasise volume and discounts, Xiaohongshu, in particular, focuses on aspirational lifestyles, attracting financially independent users who are less price-sensitive.

Brands should establish a strong presence on platforms like Xiaohongshu and Douyin, collaborating with influencers (especially so-called niche or micro-influencers, also called key opinion consumers (KOCs) in the Chinese context) and creating engaging content that encourages user interaction. Live streaming, mini-dramas, and key opinion leader (KOL) marketing are essential strategies to convert social engagement into sales. Additionally, successful brands have adapted to shifts in channel preferences and societal changes among their consumers, ensuring they communicate with their audience on their own terms.

Conclusion

Building brand relevance and customer loyalty in China’s consumer market necessitates a deep understanding of evolving consumer behaviours and strategic engagement across various platforms. Whether through emotional marketing, addressing cautious consumption, targeting niche segments, or leveraging social commerce, brands must remain agile and consumer-focused. Furthermore, long-term success hinges on ensuring that consumers buy into and love the brand, not just its best-selling product. As major luxury houses like Loewe and Louis Vuitton have demonstrated, effective localisation involves cultural co-creation – partnering with local artists and talents, for example, while retaining the brand’s core identity.

In a highly competitive and rapidly evolving market, brands that prioritise relevance, authenticity, and long-term connection will be best positioned to achieve sustainable growth.

The 2025 UK-China Business Forum is a full-day conference focused on the theme of UK-China partnerships and the opportunities for growth in both markets through export and investment.

During the morning session, the Forum will explore how to develop these opportunities, analysing both the benefits and challenges from a practical point of view, with senior businesspeople sharing their valuable insights through real-life case studies.

In the afternoon, the Forum will examine four key areas:

• Ageing populations, which require a different approach to healthcare, with more focus on prevention rather than cure, there is huge scope for UK-China academic and business collaboration.
• The Chinese consumer, amongst which there is undoubted interest in UK brands, where engagement is built on cultural relevance and emotional connection.
• Smart transport solutions, which have the potential for tremendous benefits, both for the UK as a whole, as well as for businesses and their employees.
• Green transition, an area where China and the UK are both looking for wins and where there is potential for cooperation and growth in both markets.

The event will be followed by CBBC’s Spring Reception.

Click here for more information and to register for the UK-China Business Forum

The post How to build brand relevance and customer loyalty in China’s consumer market appeared first on Focus - China Britain Business Council.

While nothing new, emotional marketing – a kind of strategy that uses storytelling, personalisation, and emotional triggers to create a deep connection between a brand and its customers to drive engagement and loyalty – has emerged as a key strategy for brands in China in recent years.

A new prioritising of self-care, self-awareness and self-expression as part of consumption decisions is a common thread across China, the UK and many other countries, especially among younger consumers. As a result, consumers are increasingly looking for brands to fulfil their needs rather than persuade them to buy things.

This has been driven by a number of factors, including economic instability, growing awareness of sustainability and, of course, the Covid-19 pandemic. According to China Skinny, “The lockdowns and health risks [during Covid] forced consumers [in China] to reflect on what is important to them. It contributed to much greater self-awareness of feelings, emotions and previously-taboo areas such as mental health.”

Jack Porteous, Commercial Director at TONG Global, points to a textbook case of how this paradigm shift is affecting marketing campaigns with Nike’s ‘Just Do It’ campaign. According to Porteous, the campaign “was really focused on pushing boundaries, self-discipline and self-development – in 2024, this seems a bit out of touch with the prevailing mood of young Chinese… a generation weary from a stuttering economy, the pandemic [and] stressful ‘996’ work environments.”

Understanding the Chinese market in the era of emotional marketing requires brands to prioritise cultural sensitivity and relevance. “This means delving into Chinese traditions, values and the cultural landscape itself,” says Porteous. “Importantly, there are specific online trends among Gen Z audiences that have changed the conversation on emotional marketing tactics.”

Trending topics online in the past year have included “visiting temples” (寺庙), “Gen Z overhaul the workplace” (00后整治职场), and “woman power” (女性力量).

This is a strategy that takes time and patience to get right, and Porteous advises companies look to local Chinese brands as valuable resources.

For example, Chinese mother and baby brand Babycare recently ran a campaign called “Today don’t call me mum”, which focused on the need for self-care and the desire to have an independent identity among young mothers. “This tapped into the emotional desire of mothers to break away from the expectation that their lives now revolve around their children, focusing [instead] on self-care and self-confidence,” says Porteous.

Blue Moon’s recent Mother’s Day campaign provoked an online backlash (@小红薯5FDE652E/Xiaohongshu)

But Chinese brands can get it wrong, too. According to China Skinny, a recent example is home cleaning company Blue Moon, which, for this year’s Mother’s Day, ran a poorly thought-out campaign fronted by a male Douyin KOL and with a slogan that roughly translated to: “In the past, mum used a big bottle of laundry detergent to wash our clothes, which was heavy and tiring. Now, with extraordinary future laundry technology, mum’s laundry is easier, lighter, and more effortless.”

While the campaign effectively expressed Blue Moon’s impressive product innovations, needless to say, many consumers did not appreciate the insinuation that doing laundry is exclusively a mother’s duty.

Campaigns like this show the potential pitfalls of basing marketing decisions on consumer data alone; mothers certainly constitute a major market demographic and are often the drivers of purchasing decisions in the household in China. However, as we noted in a recent article on consumer tribes, emotionally-resonant marketing needs to look below the surface of consumer data to uncover the factors that influence purchasing decisions.

For example, it’s not enough to decide that your brand is going to focus on mental wellbeing; you need to think about why it’s a priority for your brand, why it will resonate with your target consumer, and how you will convey that with your messaging. Chinese consumers certainly won’t hesitate to hop online and criticise a campaign they find crass or inauthentic.

Ultimately, this strategy requires brand managers to work closely with their China partners to define a target audience and set out a clear marketing strategy that communicates their brand values and stories consistently and innovatively. This should be achieved with a combination of data and on-the-ground insights.

Explore successful China marketing strategies at China Consumer 2024

CBBC’s flagship consumer event, China Consumer, will take place in London on 14 October 2024. The event will explore a diverse range of topics, including phygital retail, sustainability in China, cybersecurity and more through panel sessions, brand interviews, a networking lunch, and break-out workshops.

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The post How to connect with Chinese consumers in the era of emotional marketing appeared first on Focus - China Britain Business Council.

Success in the Chinese market is rarely the result of a uni-directional strategy; it requires a more complex approach that takes in multiple platforms and strategies.

To help businesses build a presence and loyalty in the Chinese market, Dana Goldburd from Up2China has outlined what businesses need to know about the most common digital marketing methods. By highlighting the advantages and challenges of various marketing approaches, companies can navigate the complexities of China’s dynamic market landscape with greater clarity and informed decision-making.

Live streaming

The gold-paved streets of China’s live streaming landscape have attracted many brands, keen to get a slice of a market valued in the trillions of RMB. For millions of Chinese consumers, live streams are a major part of the e-commerce experience, watched as much for entertainment as they are for commerce.

Pros: No marketing method enables real-time engagement with an audience quite like live streaming. Via a well-known host or an in-house presenter, brands can answer audience questions and get feedback in real-time. This makes it great for brands that need to provide product education – for example, a nutritional supplement or a professional haircare product – enabling them to explain key benefits and functions.

Cons: A successful live stream is often dependent on the popularity and skill of the host, and the best hosts come at a high price. There is also a complicated regulatory landscape to navigate, as well as the threat of technical challenges or disruptions.

Key opinion leaders

China is a global leader in influencer marketing, with the market for key opinion leaders (KOLs) – the more common term for influencers in the Chinese context – reaching RMB 340 billion (£37.7 billion) in 2021.

Pros: An endorsement from the right KOL instantly adds credibility to your brand. Chinese consumers trust KOL recommendations and use them to decide what to buy, ranking the opinions of KOLs almost as highly as recommendations from family and friends when it comes to making purchasing decisions.

Cons: As with live streaming, working with major KOLs is very costly and may be out of reach for smaller brands. Moreover, some Chinese consumers are starting to have doubts about the authenticity of KOL recommendations. For companies, there is a risk that promotions with a KOL who promotes a lot of different brands comes off as inauthentic.

Key opinion consumers

In response to the cons of KOLs, many brands are instead choosing to work with key opinion consumers (KOCs) – basically micro-influencers with a much smaller but much more engaged audience base.

Pros: As the name suggests, consumers turn to KOCs for trusted opinions on products and brands and working with the right one can give you access to a highly engaged community of potential brand loyalists. Since they have fewer followers, campaigns with KOCs are also typically less expensive than KOLs.

Cons: There are many creators who could qualify as KOCs, so identifying the right one for your brand can be challenging. Since they have limited influence on a broader scale, KOC collaborations are better considered as one part of a broader marketing strategy.

Official social media channels

Wherever they are in the world, businesses need to have a strong social media presence. In China, consumers expect to be able to use social media – especially the biggest platforms like WeChat and Weibo – to find out key information about businesses.

Pros: A strong social media presence gives you control over your brand’s content and tone of voice. It allows you to engage with your audience and build a community of people who resonate with your content and tone. Moreover, detailed metrics about followers can be used to inform other marketing strategies.

Cons: Social media visibility is at the mercy of the algorithm, which can make growth seem slow, especially if you are a new business just starting out. Businesses must also consider the risk of social media crises, as negative opinion spreads very quickly on Chinese social platforms.

For more insights from CBBC Member Up2China, join CBBC’s upcoming Consumer Masterclass on ‘Navigating the Chinese Market: Strategies for Success’ on 25 April. Click here to register.

This article is based on an infographic created by Up2China. Click here to view the original infographic.

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Solo dining restaurants with tables and chairs sectioned into individual booths like private train compartments have drawn increasing footfall from white-collar eaters in major Chinese cities over the past few years. The emergence of this kind of solo dining setting is in response to China’s growing population of singles who see dining alone as part of their fast-paced daily routine, further stimulated by Covid-19 controls.

In 2018, the number of single adults in China reached 240 million in 2018, with over 77 million living alone,  with the post-80s and post-90s generations making up the majority. This is a result of continuously declining marriage rates since 2014, coupled with a rising divorce rate, according to the Ministry of Civil Affairs.

The rise in the number of single people has driven up the demand for one-person meals. Unlike the older generations, young Chinese singles don’t show much enthusiasm for cooking by themselves. A report published in 2019 by Sinolink Securities Consumer Research Centre showed that the majority (approximately 42%) of China’s single adults “cook occasionally”, followed by over 20% who “never cook”.

Alongside the rise of solo dining restaurants, ready-to-eat and pre-cooked meals are also gaining popularity as they provide a convenient and reasonably nutritious solution. Takeaway businesses are also tapping into one-person households, adapting meal options normally enjoyed by a group such as hotpot, to versions suitable for single diners.

There has been a refashioning of services and products in the wider food sector as well, resulting in an increasing number of goods falling into the one-person meals category. Products such as self-heating hot pot and instant rice boxes recorded a year-on-year surge in sales of 80% and 800% respectively during this year’s 618 mid-year online shopping season, according to a staff member at the food department of China’s e-commerce giant Tmall.

Despite eating alone, consumers still have high expectations for the food they are eating. Consumers are interested in health value and “yi shi gan 仪式感” or sense of ceremony, fulfilling both their nutritional and emotional needs. Gone are the days when a packet of instant noodles was a solution for solo diners – replaced instead by meals with varied ingredients that cater to the diverse nutritional needs of savvy young consumers.

An advert for Xun Wei Shi’s hand-pulled biang biang noodles

One company that has been leading this transformation is Chinese pre-made dish brand Xun Wei Shi. Xun Wei Shi redeveloped the traditional concept of instant noodles into nourishing meals by incorporating ingredients such as seafood and recipes including braised chicken with red dates, a soup dish that is normally shared amongst families in China and is known for its health benefits.

Further catering to the palates of young people, the brand also introduced internet-famous dishes such as “snail noodles” (luosifen, a traditional Guangxi dish) and biang biang noodles – all designed for single diners. To enrich the dining experience, the brand also includes a small amount of semi-finished dough in their packages so that consumers can have fun hand-pulling the noodles before they tuck in.

An advert for drinks brand Rio aimed at single consumers

Tapping into the emotional aspect of eating or drinking alone is the alcoholic beverage maker Rio. The brand became a first-mover in China’s single drinking market with the debut of its Tipsy series in 2018, a line with only 3% alcohol that is dedicated to Gen Z single drinkers. Under the tagline “A Small Indulgence on Your Own”, the series includes five fruity drinks designed to be a “companion” for young single dwellers. The slogan appears to have resonated with the younger generation, with the hashtag reported to have drawn in over 270 million views on China’s largest microblogging site, Weibo, in the first week of its product release.

Trendy food brand Dan Shen Liang

Other brands have attempted to build Single Culture into their brand positioning, including the snack maker Dan Shen Liang, which literally translates to Singles’ Food. With pictures of dogs imprinted on its packaging, the brand smartly capitalises on popular Internet slang such as “single dogs” (a humorous term used to refer to singles in China) and “dog food” (a term used by singles to describe public displays of affection) while also allowing it to tap into the growing number of pet owners in China, many of whom have turned to animal friends as a cure for loneliness.

China’s young singles are pushing constant innovation in the country’s food and drink industry. The increasing number of sophisticated single diners means that any brand looking to enter the Chinese market needs to consider both their marketing narratives and the formats of their products in order to cater to the taste buds of this lucrative demographic.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research services can help you build knowledge and understanding of the Chinese market prior to investment.

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Understanding the Chinese market can require a complex combination of experience, data, insights and industry contacts. But beyond analysis, there is a relatively banal subject that can greatly impact consumer behaviour and how they choose to spend their money – the weather.

The influence of the weather is something many China analysts track closely. For example, this year, many have noted that China’s National Climate Center has forecast extra frigid conditions for the country. The mercury will be lower than normal in the northern, northeastern and northwestern parts of the country (which already frequently see temperatures dip as low as -20 to -40°C), and even in southerly provinces like Guangdong.

Interest in the weather is not unique to China consumer analysts; in any country, colder weather can impact people’s moods and make them less likely to get out and spend. It can also change the way people do spend, providing a further boost to already surging e-commerce sales and other digital behaviours.

In many cases, components of a marketing plan can be tweaked to better accommodate frosty conditions. It can sway which products and formats we buy, from fashion to food and beverage, to the health and beauty products we seek. For example, consumers may seek out immune-boosting health supplements to fend off cold and flu outbreaks driven by the colder weather.

Last winter’s snow sports boom (stimulated, of course, by the 2022 Winter Olympics in Beijing) is likely to gather further momentum, and there will be opportunities for brands that make winter sports clothing or equipment, as well as hospitality brands with venues in popular winter sports destinations such as Heilongjiang and Jilin Province. On the other hand, consumers will be less likely to partake in recently popular hobbies such as camping and cycling. Communications that empathise with consumers over the weather through a clever, funny or emotional lens can help strengthen their connection to and preference for your brand.

When determining hero products and communications, the vast differences in weather conditions between cities and provinces further reiterates the importance of localising and targeting regionally. Consumers won’t need the same degree of outerwear in Shanghai as Shenyang, for example, and will be swayed by different products, messaging and imagery. Beauty buyers looking to protect their face from skin-chappingly dry winters in Beijing are likely to be looking for thicker, more moisturising creams than those in more humid, warmer Guangzhou.

The frosty winter comes on the back of a Chinese summer which registered its hottest August since records began and one of its lowest levels of rainfall in 61 years. These severe swings between the intense summer and the winter ahead will only convince more Chinese consumers of the threat of climate change. China is among the most at-risk countries in the world, with 85% of the population exposed to climate-related hazards by mid-century according to the UN. Yet, Chinese consumers aren’t as concerned as you may expect according to an international study by Gallup. Just 20% of people in China saw climate change as a “very serious threat” in 2021, down from 23% in 2019. The figure was 48.7% globally.

Nevertheless, many Chinese consumers – especially urban Gen Z – are taking note of the need to live more sustainably to help mitigate climate change. Some predict that this could start to have an impact on shopping festivals like Singles’ Day this year, and brands should keep this in mind when planning marketing and promotional activities going forward. Any sustainability initiatives should be sincere and backed by concrete evidence/actions or consumers may accuse them of greenwashing.

The two key takeaways for this are to consider whether there could be areas of your marketing plan worth tweaking to factor in the anticipated colder winter than usual; and how environmental and sustainability messaging differs in China from other parts of the world.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research and analysis services can provide you with the information you need to succeed in China.

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“If you protect yourself from the sun, you will be whiter than others. If not, you will be uglier,” so said a controversial sun hat advertisement last month on Douyin from the multi-billion dollar Chinese sun protection brand, Beneunder.

Beneunder has capitalised on the perennial belief across much of Asia that fairer skin is symbolic of a higher social class, away from working in the fields and rural poverty associations. While whitening skin creams are the best-known products that support the belief, nine years ago, Beneunder started selling premium umbrellas that claimed to block 99% of UV rays, soon establishing itself as the ‘Hermès of umbrellas’. The company was quick to capitalise on its reputation and diversify its range, with top-selling products now including sun-protection clothing, face masks and sleeve gloves.

Increasing affluence and changing trends are seeing Chinese consumers spend more time in the sun. They’re holidaying in rural areas more, with a big jump in those going camping and planning outdoor activities such as kayaking or golf. On top of that, the 58% fall in PM2.5 air pollution over the past decade has made China’s sun harsher.

As a result, China’s sun protection industry is booming. Sun Protection notes on Xiaohongshu (RED) grew 56% last year, and 115% in the first four months of 2022. Sales of related products grew an average of 80% across Tmall and JD last year. Sunscreen has been among the fastest growing categories for skincare, yet many consumers are opting to use less of the cream on their skin, instead choosing ‘less obtrusive’ protection such as Beneunder’s umbrellas and clothing. Sun protection apparel is tracking to grow from RMB 61 billion last year to RMB 96 billion in 2026, according to CIC.

So when Beneunder filed for an IPO in April, things should have been promising. But it didn’t quite go that way. In June, the official newspaper of the Chinese Communist Party, the People’s Daily, slammed the company for excessive spending on marketing and underinvesting in research and development. Investors have also been pressuring Beneunder to halve its $3 billion valuation from earlier this year.

Beneunder follows a classic example of many Chinese disrupter brands. When tech companies fell out of favour with Beijing, investors pivoted towards consumer brands, which became awash with cash. Much of this cash was spent on marketing – not strategic marketing investments, but rather transactional initiatives aimed at quick sales.

Beneunder’s marketing costs grew from RMB 37 million in 2019 to RMB 586 million in 2021 – 9.6% of revenue to 24.4%. During those three years, R&D investments dropped from 5.3% of revenue to just 3.0%.

The focus on quick-hit marketing over longer-term investments is all-too-common for new, high-profile consumer brands in China. In many cases, these brands source products through contract manufacturing, making them easy to replicate for other brands. As a result, brands then try to stand out through their marketing, not their products.

A lot of the marketing by these disrupter consumer brands isn’t overly sophisticated. It typically focuses on transactional spending on KOLs and live streaming. The big problem with sustaining such a strategy is more and more brands are following a similar path, pushing up the costs. The cost of a KOL on Xiaohongshu grew 50% last year, with increases on Douyin and Kuaishou not far behind.

Former darling of China’s beauty category, Yatsen’s Perfect Diary, ran into challenges utilising a comparable strategy. In 2020, its marketing costs equated to two-thirds of revenue. But when the same marketing initiative costs as much as 50% more the next year, they had problems, which was why Yatsen’s share price dropped from a high of $24.55 to as low as 51 cents in less than 18 months.

While many disrupter and DTC brands in China bedazzle with big-spend marketing campaigns in the early years, less than half are still around after five years. But they don’t leave without making an impact, forcing brands across the board to spend more on marketing to get mindshare. The most sustainable and profitable brands are those that balance quick hit and acquisitional marketing with longer-term brand and loyalty building. Sustainable brands also invest in research and development to create products which can be genuinely differentiated — as well as being relevant for Chinese consumers.

If you are a British company working in the consumer sector concerned about the latest government regulations in China, call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research and analysis services could help.

This article first appeared on China Skinny

The post Should brands in China spend on marketing or R&D? appeared first on Focus - China Britain Business Council.

Apple’s short film inspires young dream chasers in China 

Apple took the CNY marketing battle to the next level this year. The US iPhone maker released a 23-minute short film entitled The Comeback, shot using its latest iPhone model (the 13), which had yet again sparked a buying frenzy in China upon its launch in September 2021. While the film and the huge amount of effort put into its production attracted widespread attention, what really wowed Chinese consumers was the story, which explored the conflict between progress and staying true to one’s routes. 

The film tells the story of a son who failed to achieve his dream of being a film director in a big city and returned to his hometown. After overcoming the frustration of his failure, and with the support of his father and local villagers, the son finally produced his first film, which also turned the forgotten village into an Internet sensation. 

The video resonated with Chinese viewers because of its portrayal of hyper-local issues such as urbanisation, which has been one of the biggest social trends in China in recent years. It also put the value of being together with family — one of the main parts of Lunar New Year celebrations — at the forefront. By creating marketing based around hope and chasing dreams, combined with those of familial bonding, Apple tapped into the desires of its largest consumer demographic and regained its position as the largest phone provider in China.

L’Oréal revives Spring Festival traditions with a Temple Fair in Shanghai

Having grown up alongside Gen-Z since its first store opened in China 25 years ago, L’Oréal (the world’s largest cosmetics brand) has repeatedly refreshed its Lunar New Year campaigns over the years to resonate with its core market. This time around, the company revived traditions from Gen-Z’s childhoods including New Year shopping trips and temple fairs. By showing respect for China’s culture and history, while bringing back the festive spirit, L’Oréal was able to engage strongly with consumers. 

Unlike other global labels, L’Oréal’s campaign was also decidedly more down-to-earth, choosing Shanghai No.1 Food Store as its event venue. The first food retailer in Shanghai started its life in 1954 and has since become a time-honoured brand, a go-to for residents in the city, especially during festive seasons. As such, the campaign also leveraged the footfall at a popular local store, showcasing the brand’s understanding of the local market layout.

Another appeal of this campaign for the young generation was L’Oréal’s cooperation with a hanfu costume expert, throwback to the Han & Tang dynasties, and several online influencers in the traditional Chinese culture niche. These collaborations not only tap into the guochao (literally ‘national trend,’ or Chinese fashion trend) movement, but also the growing interest among Gen-Z in dressing up in traditional clothing.

With the presence of hanfu influencers specialising in the guochao style, the offline event easily caught the attention of young shoppers. With many people trying out the costume for photo opportunities, it also helped to create user-generated content, which increased the campaign’s online exposure.

As a result of such a multi-layered campaign, L’Oréal set itself apart from other players in the cosmetics market and won over young customers with its thorough knowledge of both new consumer demands and the culture of its target market.

McDonald’s ink painting anime gives hamburgers a Chinese flavour

McDonald’s took an unusual approach this Lunar New Year, combining Chinese ink painting with modern fast food. Chinese consumers were blown away by its aesthetic charm, blending two disparate ideas into one seamless campaign.

The one-minute campaign video was produced in collaboration with Shanghai Animation Studio, which also created hit mid-20th century Chinese cartoons such as Havoc in Heaven (the most popular episode of one of China’s Four great classic novels, The Monkey King), Black Cat Detective, and Calabash Brothers. Incorporating a classic Chinese painting style, the video smartly leveraged the aforementioned guochao, as well as the nostalgia of the target audience. 

Depicting a pink plum blossom petal floating through a pastoral landscape rendered like a traditional Chinese painting, the video skilfully hints at the approach of Spring. The accompanying poster for the campaign featured festive symbols like plum blossoms, auspicious clouds and magpies, which won over Chinese consumers with its unexpected understanding of Chinese culture.

Many global brands crave success and notoriety in the Chinese market, with this desire only getting stronger as Gen-Z become the backbone of the country’s consumer economy. The fast-changing and ever-diversified demands of these savvy buyers mean that international brands will have to continue to improve their knowledge about this new generation, as well as the society they live in. In order to succeed, foreign companies need to step up their efforts to adapt their offers to align with societal and cultural trends. Only by doing so will they be able to create more influential campaigns that not only make them stand out, but more importantly, impress a lucrative and discerning generation of new consumers.

Images captured from social media

This article was provided by our content partner, Dao Insights

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Over the last 30 years, the status of pets in China has evolved from watchdogs and rat catchers to part of the family. The pet market in China reached an estimated RMB 206.5 billion (around £24 billion) in 2020. Although the proportion of pet owners in China is still only around 4-5%, the market has expanded significantly, growing at a year-on-year rate of 20% from 2015 to 2020. 

There are many drivers behind the rapid growth of the pet economy. One is demographic change. With more young people delaying marriage or deciding to stay single, many have sought companionship from a cat or dog. In fact, it is estimated that around 41% of Chinese pet owners are single and 46.3% of those were born after the 1980s. 

“Recent policies such as the declassification of dogs as pets not livestock and the ban on trade and consumption of wildlife in China is helping to change attitudes towards pet ownership,” says Matt Jackson, Director with KPMG’s UK-China Business Practice. In 2019, the Ministry of Agriculture explicitly announced that cats and dogs are not livestock and should be classified as domestic pets. Together with the overall increase in consumer income and standard of living, many middle-income households are more willing to spend money on a pet. Over half of pet owners reside in Tier 1 and 2 cities such as Shanghai, Beijing and Chengdu, and it is estimated about one third have an average income of over RMB 8,000 (£933) per month. 

A recent survey showed that Chinese people mainly purchase or adopt pets to make themselves happier and to de-stress. Many pet owners, especially Gen Z, crave an emotional connection and seek to fill this void with a furry companion. As a consequence, the number of pets and owners is on the rise, and it is important for businesses to think about the potential of this market. 

How can businesses take advantage of the pet market? 

Many young people are eager to provide the best lifestyle for their pets and this has enabled businesses to profit from this growing consumer group. Even businesses that don’t sell pet-related products and services have reaped the benefits. By featuring cute pets in their advertising, brands ranging from cosmetics to fashion to cars have tapped into the pet economy and succeeded in connecting with younger audiences. 

A good example is domestic Chinese cosmetics brand Perfect Diary. Last year the brand launched a ‘doggy’ eye palette and collaborated with the famous live streamer Austin Li to feature his pet, Never, in the campaign. By positioning a celebrity’s dog at the forefront of the campaign, Perfect Diary pre-sold 150,000 palettes during the first few minutes of Austin’s live stream. 

Cosmetics brand Perfect Diary has featured cats and dogs on its eye shadow palettes

Live streaming pet-related content can help brands reach a wide range of potential consumers, and many brands are using a ‘pet ambassador’ in their advertising. For example, home appliance manufacturer Midea opted to collaborate with a cat called Shengsu to launch the M6 robot vacuum cleaner. The cat’s profile has around 5.9 million followers on Weibo, and its content continues to get hundreds of reposts. The company chose to feature the cat in its campaign as it knew it could target household pet owners who frequently need to clean up pet-related messes and spills.  

For CBBC member company Emma Bridgewater, 70% of sales in China comes from mugs, with animal-themed mugs making up 5% of the sales mix (cats and dogs being the most popular). Even international fashion brands such as Prada and Louis Vuitton have released pet-related products and accessories. Simple luxury products such as a dog jackets and collars have become immensely popular items, especially among Gen Z and millennial consumers in Tier 1 cities.  

Louis Vuitton collaborated with the same pet key opinion leader (KOL) as Perfect Diary, Never, to advertise one of its pet carriers. This highlights that by cooperating with pet KOLs, fashion brands can capture consumer attention by featuring ‘cute’ pets rather than other animals. People tend to associate pets with joy, and by creating these types of campaigns, brands can reach out to both pet owners and animal lovers in general to target a more diverse market audience. 

Pet lovers = tech savvy

The main demographic of pet owners in China is also tech savvy. The rapid growth of the pet economy has accelerated with online shopping. Indeed, as seen in the examples above, animal-related content means more than just creating adverts featuring Fluffy. Many different brands have leveraged the pet economy to execute an omnichannel strategy that combines online and offline marketing. 

Social media will continue to be an essential tool for the pet industry and platforms such as WeChat, Weibo and TikTok will prove increasingly valuable. Brands of any kind should explore these opportunities and consider working with pet influencers or live streamers to promote their products. It is estimated that there is a pet live streaming session coming online every 5.4 seconds on video-platform Kuaishou. 

Moreover, many consumers tend to buy their pet supplies online, and this could be a good way for brands to target owners. It is believed that 71% of Chinese pet owners visit pet-related content online, and so it could be hugely beneficial if a brand features a cat or dog in a campaign. Furthermore, businesses that foster their own pet representatives or work with pet KOLs are more likely to be successful, but should be aware that this requires time and investment. 

Mugs plastered with cats and dogs are among British brand Emma Bridgewater’s most popular products in China

The untapped potential of the pet economy 

Last year the number of cats and dogs in China’s urban areas exceeded the 100 million-mark for the first time. The willingness of consumers to spend on their pets is also set to rise and in years to come it will gradually catch up with the US. As the trend to humanise one’s pet grows, China’s younger citizens are also becoming highly attuned to issues surrounding animal welfare. In addition, with more people delaying having children, there will be an increase in young millennials who wish to devote their energy to their furry companion instead.  

According to CBBC retail and e-commerce lead Pearl Zhu: “Aside from launching pet-related products and collabs, making your brick-and-mortar store pet friendly could also be a winning formula in China.  Empowering pet owners to take part in shopping and socialising without leaving their four-legged friend at home along could hugely facilitate a positive perception of a brand or company.”

 Overall, even if your business does not sell pet related items, the developments in China’s pet economy should not be overlooked.  

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