Moving Your Brand Into China? Look Before You Leap

15th May 2014 0 Comments

Last week we blogged about the amazing potential in China’s growing market for businesses that are looking to expand into the East, and ways in which social media sites like Sina Weibo and Tencent Weibo can help provide insight into an otherwise opaque market, from a Western perspective. This week we’ll look at Western brands that got it right, and others that leaped before they looked, culturally speaking, and how they could’ve sidestepped such blunders by using social media to understand and target their market segment effectively.

Lost in Translation
US companies have been trying to trade with modern China since the sovereign state opened up to foreign investment in the 1970s. While some have done a great job of introducing products into this unique market, others found that their expeditions got lost in translation.

These brands didn’t fail because they were inept or inexperienced, either. Fortune 500 companies that triumphed in other global markets have suffered some of the most epic defeats. Why? Take it from NBC News: “[i]n China, business is not just business. It’s social.” Ignoring those implications can spell big trouble for Western brands.

Girl Trouble
Even America’s most iconic doll can’t just waltz into China and expect to become a household name. While the children’s doll was popular enough, the toy manufacturing giant assumed that their doll’s brand would be desirable enough to Chinese consumers that they could build a flagship store and market all kinds of goods and services.

The toymaker invested millions in a prime urban location, replete with high-end branded jeans, a restaurant and a spa. But a disastrous miscalculation led to the store’s closure just two years after its launch. Instead of concentrating on the doll, the manufacturer speculated that the market was ready to consume anything and everything bearing its logo.

Know Thy Customer
While one company went in with the assumption that people would understand their brand, Nike has found success in China by building a brand that focuses on Chinese interests, according to BBC News. Most popular in third- and forth-tier cities, Tencent Weibo data can help businesses make better decisions before entering into uncharted markets. Enrichments such as gender and language detection can help further zero in on market potential specific to products within a brand (such as running, training or basketball shoes, in Nike’s case).

‘DIY’ Disaster
Let’s look at another example. A DIY home-improvement retailer built its brand in Western markets by following urbanization and demographic indicators. With China’s exploding middle class, the big-box store thought they would have a slam-dunk.

Again, assumptions led a seasoned retailer down a costly rabbit hole. It turned out that people don’t ‘DIY’ in China – labor is so cheap that those with disposable income just hire a handyman, reports NBC News.

Well Positioned
Even for those who study the market, we see that success in China isn’t just about demographics – Western businesses need to understand positioning and culture. General Motors is another brand that has thrived in China, to the extent that certain car models are tailored to Chinese customers’ product preferences, according to CNN, and designed for the China market first.

Luxury and traditional brands (like GM) can benefit from Sina Weibo data, which provides insight into established markets. With five percent of users posting ninety-four percent of the original content (and ninety-five percent simply reposting that content), big brands can identify key influencers in their market. Links enrichments can further help the enterprise understand what other types of content is being shared by influencers, providing rich context for engagement campaigns.

Live and Learn (and Thrive!)
If these examples have taught us anything, it’s that Western assumptions about China’s market are the equivalent of wearing cultural blinders – businesses operating in the dark with questionable instincts.

Chinese social media gives real-time access into the cultural zeitgeist of the new middle class that uses online networks – exactly the upwardly mobile community that has disposable income. Sina and Tencent Weibo help brands take off the cultural blinders.

Contact [email protected] to find out more about how DataSift can help your company move into the Chinese market.

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