Many of our products may be made in China, but can we truly say that we use many Chinese brands in our everyday lives Ask yourself, in your home, how many Chinese FMCG products do you own with a recognisable brand name
Beyond Huawai (actually Taiwanese), mass market penetration of Chinese brands in the UK is minimal and consumer familiarity is low.
We have to ask ourselves why this is the case. China is a vast country and possesses an economy, though slowing, that is strongly poised for western expansion. Indeed, prominent brands such as Prada and Louis Vuitton have stores in Beijing and Shanghai that cater to a market hungry for the trappings of western luxury.
However, the reverse is not the case and beyond Shanghai Tan , a Chinese brand with its own discernible high-street presence in the UK is a rare find.
Chinese vs western tastes
The disparity here may have something to do with the differences between Chinese and western tastes. Many marketers would cite the Chinese consumer as essentially being a new consumer and, as such, is learning to consume in a new way.
This translates to a different taste level than western consumers who may value a really good bargain or discreet branding instead of the opulence of newly moneyed Chinese consumers. This luxuriousness may be what is stopping Chinese brands from branching out into the western markets, hamstrung by a level of taste that won’t necessarily resonate with mainstream westerners.
Equally, there may not be an appetite for Chinese-grown, foreign marketable goods out there.
Take the luxury market, as an example, and it is possible to say that European luxury is in a world of its own. Even the Chinese, who’ve tried to replicate the success of European industry, have met road blocks when trying to engrave a home-grown luxury brand in the minds of consumers that compares to such behemoths as Chanel, Burberry, Cartier, Hermes, Gucci and Dior.
Market access
Even though taste and branding is a significant part of the conundrum, simple issues such as market access should not be overlooked.
Arguably, market access issues remain the most common barrier facing international exporters wishing to enter new territories. These issues affect both SMEs and large companies alike, especially as each market comes with its own unique set of obstacles to overcome.
When can Britain expect Chinese goods to become mainstream Continue reading on page two to find out…
For an emerging market like China, these issues are doubly resonant as the country looks to tap into existing wealth in Western Europe as its own economy slows.
Additionally, taxes are high both for export and import, not to mention the vast tax placed on non-Chinese goods in the country, presenting a significant barrier to entry for many businesses. This inflexible approach to taxation may be dressed up as protectionism but, ultimately, the result is less access and fewer Chinese brands in the open market.
Whats to be done
Leaving aside these major structural obstacles, which are largely governmental, there are still techniques of ensuring gradual market penetration in the west.
It goes without saying that investment in trading houses, representatives and export intermediaries are good options, but these can often be prohibitively expensive. A possible solution is an affordable means of getting products into the hands of western consumers that helps to raise awareness of it and generates opinion.
As with many products, actual tangibility and interaction with the consumer is vital to form a brand that is saleable. What is needed is targeted sampling activity that gets a new product into consumers hands accompanied by a questionnaire for them to provide their feedback. Sampling in this way will enable brands to target specific demographics of consumers, say a certain age bracket, living within a certain area and earning a set amount, to ensure they receive feedback only from the desired audience segment.
Essentially, what Chinese brands need to do is test their offering first and adapt it as appropriate based on consumer feedback. A full-scale launch without testing the waters first could easily result in failure and the loss of a crippling amount of money.
The lesson to learn is that patience, systematic acquisition of feedback and its careful application to make a brand locally viable is the route to success in the West.
Hannah Campbell is operations director at The Work Perk.
