As China begins reopening for business once again, there is a spirit of cautious optimism throughout the country. Whilst a lot of the world is still on high alert or lockdown, China’s experiences over the last few months provides an outline of what the future could look like for international brands and their teams, whether their priority is reinforcing and developing their business in their domestic market, entering the Chinese market, or maintaining their interests there.
Whilst life in China has been dependent on digital platform infrastructure for the last fifteen years, the crisis has catalysed an acceleration of digitisation in the country and entrenched ‘digital’ fully into life, particularly in the home. Whilst digital platforms have furthered their importance and relevance in everyday life in China, the crisis has led to new concepts of value within the Chinese population which is changing the way people choose to interact with brands (and which brands they choose to interact with). A similar pattern will unfold in countries in the grip of the pandemic seeing a similar, and necessary, acceleration of digital interactions.
The ‘big tech’ opportunity
During the height of the crisis in China, WeChat, the country’s leading communications platform, kept citizens in touch with the government, special services and each other, whilst China’s deeply embedded ecommerce networks were optimised and re-focused on providing fast fulfilment of essentials, leveraging the country’s diffuse bricks and mortar retail infrastructure.
Chinese tech firms also contributed their expertise to help control the spread of the disease and support the effort to find cures with company employees on the front lines of the fight and donations to the international relief effort from entrepreneurial leaders like Jack Ma, Chinese ‘big tech’ platforms and their employees have been held up as heroes of the fight, second only to the nurses and doctors saving lives in hospitals. The crisis has provided these brands an opportunity to build deeper relationships with consumers that will last long after the pandemic ends.
New consumer values
Consumers in quarantine have reconnected with traditional pass-times and found a new interest in, and concern for, wellbeing, health and fitness. This, combined with cost-saving priorities, has changed the way the Chinese spend and goes some way to illuminating where they will see value going forward. Sportswear, health-food and personal-care performed well but whether the sales of Lycra leggings and matte foundation are a sign of consumer confidence or the ‘lipstick effect’, where consumers continue to buy small items to ‘treat’ themselves in an economic downturn, remains to be seen.
What does seem clear is that there is a new level of interest and expectation from Chinese consumers in brands that have a deeply imbued value system or purpose which reflects their own concerns, and that consumers want to communicate and interact with brands through these values to form lasting and deep connections. Homegrown brands such as the underwear company Neiwei, with its design concept of “respecting the feelings of women” and its sincerely represented values of female self-empowerment, are gaining significant traction through their clear reflection of purpose.
Brand purpose comes of age
Concepts of purpose which have resonated with Chinese consumers since the outbreak have been focused on brand contributions to society and the public good: the immediate response from luxury groups and brands to the crisis, such as LVMH producing hand-sanitizer, or the numerous international brands donating funds to the relief effort, has been praised by Chinese consumers and boosted their online sentiment. Nike reinforced its connections to consumers by helping them stay fit at home through training videos and content provided over the leading social networks. Despite the lock-down, online sales of Nike products have offset the disruption of store closures. This is the time when brands should really be putting their brand purpose into action.
New digital frameworks
The crisis has also added new relevance to China’s increasingly digital-first framework in connecting content and commerce, facilitating and creating a new paradigm of how consumers interact with brands. As brands in other countries up their digital activities, there are lessons to be learnt from China’s new digital frameworks:
The continued rise of livestreaming
Shanghai Fashion week this year is being entirely livestreamed through a partnership with TMall, whilst one of the world’s oldest luxury houses, Lanvin, broadcast their February Paris show in 3D through a Chinese streaming platform. Reflecting the unprecedented level of access that consumers have come to expect from the brands they interact with and new environmental concerns, livestreaming is changing the paradigm of how the global luxury industry works and presents itself from the ground up.
Online pop-ups and new levels of personalisation
Through opening themselves up and working with greater transparency, brands are seeing the benefits of forming deeper daily connections with their consumers. WeChat in particular has been key to facilitating these close interactions, with brand boutique sales staff communicating directly with customers through the platform to provide a highly personalised relationship and level of service: over Valentine’s Day, with their China stores closed, Louis Vuitton launched online pop-ups on WeChat, providing facilities for customers to communicate directly with sales staff on gift selection, which generated significant performance over the previous year’s holiday.
The so called ‘Shoppertainment’ format, which has gained rapid popularity, provides a notable integration of the key pillars of interactivity, content and purpose, crossing entertainment and retail to connect with consumer groups through a 360 offering. JD.com is the key sponsor of the video on demand show, ‘Welcome back to sound’ which provides a reality TV-style look into the lives of Chinese influencers and personalities working on a radio show, which viewers can call into.
Filmed in a sensitively designed ‘home’, the beautiful products which surround the cast and fill the screen can be purchased from JD.com, creating a direct connection between the lives of the ‘characters’ and the physical objects which reflect their values and purpose through the show’s concept.
The path forward
The crisis has changed the way consumers interact with brands in China, providing unprecedented levels of interaction through digital first frameworks. The necessity for brands to experiment more with digital frameworks to reach quarantined populations will mean these trends will start to unfold across other regions outside of China too. Brands that can understand and present the fit between their brand purpose and the shifting consumer value systems have the opportunity to overcome structural challenges and form long term relationships with their communities of fans and customers, despite the global pandemic and the economic repercussions to come.
Sophie Cheng is general manager of FutureBrand Greater China. She is based in Beijing.