Five Questions You Should Be Asking About Your China Market Strategy

Five Questions You Should Be Asking About Your China Market Strategy

While China’s domestic consumer market continues to expand rapidly and is fueling growth for global brands, we confront more challenges than ever in executing a China market strategy, including:

  • Decoupling: China is effectively walled off from international markets due to COVID-related travel and entry restrictions, making it impossible for global market managers to drop into the market and have a look for themselves. 
  • Innovation by Chinese brands: As Chinese consumers’ preferences have rapidly changed during the last year and a half, local brands have capitalized on international brands’ inability to track the market by quickly adapting and innovating. 
  • Government policy confusion: The Chinese government is becoming increasingly intertwined with business regulations and is actively intervening in industries such as gaming and education and indirectly impacting brand marketing strategies with cultural changes such as celebrity fans, LGBTQ issues and influences to cutlural norms and cues. 

Amidst this backdrop, it is more important than ever for executives to be assessing their China market strategy on an ongoing basis. 

Here are five questions that every global executive team should be asking about their China business: 

  1. Who are our local competitors? If global brands are not closely studying local brand efforts in their industry, they are surely missing out on tracking innovation relevant to their brand. While local brands may not have the long history of global brands, they make up for this in their rapid innovation and reactions to local market and consumer trend shifts. Global brands should be carefully studying these competitors and seeking to learn from their innovation, regardless of price point. 
  2. Is our brand positioned correctly in the market? Where are you located in the mall? How do Chinese consumers perceive your brand? Is it in line with your expectation? Incorrect or inaccurate brand positioning is one of the most common mistakes that global brands make in China, and often Chinese consumers’ perception is different than what the global executive team thinks it is.  
  3. How is our consumer changing? If you don’t think your consumer is changing in China, you are wrong. Chinese consumer trends are shifting so quickly that it’s very difficult for global teams to keep up with these changes, especially when global executives have not been able to visit the market for more than a year and a half. It’s imperative that you understand who your Chinese consumer is, and how they are changing, so your brand can change with them. 
  4. How is our brand appealing to Gen Z consumers? While millennials have been the driving force behind China’s luxury and premium market in the past, this is all changing as Gen Z emerges and prepares to take the mantle as the top spending consumer in China. 
  5. Have we localized our strategy enough? All brands have undoubtedly localized their China strategy to some degree, but is it enough? It’s not always an easy question to answer, but the success of your China strategy depends on it. 

These questions are not always easy to answer, but given the rapidly changing nature of the China market, they are crucial to getting your China market strategy right. 


About CLA: 

China Luxury Advisors Inc (CLA) is a China strategy consultant that advises and works collaboratively with luxury and premium brands, retailers, streetwear brands, tourism brands and more to develop their China market strategy. 

Contact renee@chinaluxuryadvisors.com for a 30 minute consultation on your China market strategy.

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