How can imported brands attract more consumers?
Imported brands have not performed as well as people expected in Chinese FMCG market for the past few years. The emergence of a large number of Chinese local brands and the revival of traditional brands continue to outgrow foreign brands.
According to the research from Kantar Worldpanel, over the latest three years, the value share of Chinese local brands has been gradually expanding, not only in the total market, but also in food & beverage as well as non-food categories.
Domestic Product: Barcode begins with“69”?Source: Kantar Worldpanel Household Panel
The reason why Chinese brands are winning more popularity is because of the transformation in the new generation’s tastes and values, leading to higher awareness of Chinese brands, as well as confidence in the product.
Take dairy category as an example. From Milkground which has a slogan that “focus on cheese, specifically for the Chinese” to Feihe Infant Milk Formula which claims that they are the most suitable for Chinese babies, those Chinese brands devoted themselves completely to launching products to meet the demands of Chinese customers, resulting in their leading position in the market.
Source: Kantar Worldpanel Household Panel & Baby PanelNote:52 w/e 2021/09/10 vs. 52 w/e 202/09/11, national
As indicated by the data from Kantar Worldpanel, local brands continued to reporting exciting market share gains until this September within the dairy category compared with the same 52 weeks last year.
Milkground experienced a 53% value increase on year-on-year basis. Meanwhile Feihe also saw a rise in its sales by 25%, which is much higher than the category average value growth rate.
In some categories which used to be dominated by foreign brands, domestic brands have made breakthroughs, enjoying the preference of more and more Chinese consumers.
However, the demand for imported brands remains robust in China. Both opportunities and challenges hide in this high-potential market. Thus, how could foreign brands stand out from fierce competition?
High-tech food introduces the concept of health and environmental protection
Chinese consumers are gradually upgrading their perspectives towards health and they are paying more attention to health-related topics. Snacking type health care products and the “planted-based” brands are coming recently becoming the new favorite of consumption, it means that seizing this new trend of healthy diet is a must for imported brands.
Source?Who care who does 2020, Kantar WorldpanelSource?Kantar China MONITOR 2020
More and more international brands that focus on "health" and "sustainability" have resonated with Chinese consumers and secure their share of mind amongst the middle class consumers.
For example, Beyond Meat, a planted-based meat brand which uses plant proteins to replace animal proteins, combines advanced technology with the sustainable concept to advocate a more responsible and healthy lifestyle. In China, Beyond Meat succeeded in getting into Chinese market by distributing in Hema, Sam’s club and Metro.
In the meantime, through the cooperation with food chains like Starbucks and KFC to include plant-based diet into menu, Beyond Meat captured the market opportunity quickly and opened up a new way of distribution which could be a reference for local plant-based meat brands for developing themselves.
Localization gives a hand to market development
Besides, effective localization in communication and social E-commerce strategy cannot be ignored. Every time when Chinese New Year approaches, international cosmetic brands would launch creative seasonal limited editions to drive brand communication, such as the limited-edition lipstick and loose powder for Chinese-New-Year red from Givenchy and the zodiac powder compact from Estée Lauder. While attracting attention through “Chinese elements”, these international brands also expressed their deepest desire to be integrated in the consumer sentiment.
Apart from that?Lancôme, an imported cosmetic brand which is excellent in marketing localization in China, even collaborated with the famous actress Dongyu Zhou to release a gorgeous video in the spring festival in the theme of Chinese new year red.
Sinking to lower-tier channels to broaden brand distribution
In terms of channels, imported brands also have to promote supply chain cooperation, broaden sales channels, and expand channel coverage to create greater possibilities to deepen their availabilities in the local market.
The case of Zespri which has been in China for over 20 years is a perfect example. As a leading brand in Kiwi fruit market, it collaborated with JD Fresh on supply chain, and by doing this, Zespri could build an omni-channel shopping ecosystem and explore new E-commerce modes for fresh food.
Relying on JD’s advantage in cold chain logistics and ability to sink to lower-tier market, Zespri would also be able to attract the purchase of more Chinese consumers in those markets and provide them with high-quality and convenient service.
In addition, Zespri also established a direct supply chain with Pagoda to accomplish deep cooperation from upstream planting to retail sales and upgraded the shopping experience simultaneously. Pagoda’s thorough distribution channels, as well as its integration of online and offline retail would help Zespri to further penetrate into Chinese market, thus achieving rapid growth.
Imported technology empower Chinese brands
Imported brand and local brands can mutually reinforce and benefit each other. International brands which have comparative advantages in technology and premium image would encourage consumption upgrade in Chinese market while exploring the path to localization.
More and more local brands are adopting imported technology to enhance their competitiveness. For example, domestic skincare brand Dr. Yu adopted the Refractance Window dehydration technology from USA to create freeze dried essence mask.
Unlike traditional masks, the product could perfectly preserve the effective active ingredients in the mask, and also take high-activity, stability and safety into consideration, promoting the efficacy of the product. Empowered by the patented technology, Dr. Yu’s mask rapidly grew its popularity among Chinese customers.
With the surge of China pride, Chinese customers express greater needs for any high-quality products that help them to live a better life. Therefore in China, imported brands have plenty of opportunities to grow. With the injection of global economic vitality and innovation capabilities, China market is set to grow sustainably.