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Friday, July 19, 2024

The Last Word

Hoping to crack the Chinese market? Look beyond tried and tested western methods, writes Leo Austin

Leo Austin

Senior Advisor

The Conference Board China Centre

Francis Fukayama is most famous for writing ‘The End of History’ at a time when history was just re-starting but in 1995 he wrote another book called ´Trust’, which I think is more important. It describes how trust glues a country together and talks of China as a low-trust culture like Southern Italy, based on family units and with weak ambient-links between strangers; the opposite of Sweden or Norway. For a lot of the country, that’s true. There is scant trust in China for anything, let alone corporations. They have a wealth of examples of companies exaggerating, embellishing and just plain lying to the public. Food scandals have led wealthier city-dwellers to feed their kids only imported milk powder if they can.

Chinese students in the UK are our best brand ambassadors bar none

As a brand, how do you build trust when your audience have little understanding of the place from which you come; when they can’t read the labels on your products or your stories in the media? How do consumers notice you on eCommerce when Alibaba alone is growing its international portfolio to 40,000 brands by 2022?

When foreign brands take off in China, it’s built on a basic platform of consumer trust that they are what they say they are and that they treat their customers well. These beliefs are built of personal experience and recommendations far more than through traditional advertising. Britain has a unique advantage against almost any other country when it comes to Chinese student numbers. In 2017/18, almost 107,000 were studying in the UK. A huge number of those earn money as part-time Daigou – overseas buying agents for friends and contacts. They source products that people have heard about and want to get hold of, often just visiting a local supermarket and then sending a parcel back home; but most importantly they find brands they trust and recommend them on their Wechat social media accounts.

The Daigou channel has suffered some push-back lately as the government cracks down on large syndicates that smuggle luxury goods in traveller’s luggage – and clear Australian shelves of local milk-powder. However, the part-time mail-delivery student-buying model continues to thrive. It’s a personal social media activity, selling to family and friends and taking payment in RMB. It operates largely under the radar and consumers pay import duty on the parcels they receive. Consumers believe Daigou because it works as a pre-selection process and the audience has a personal connection to their buyer. There’s a reason that Boots has now been able to set up its own cross-border ecommerce outlet for China. Daigou have built the business for them.

Chinese students in the UK are our best brand ambassadors bar none. Tourists are our next resource. When brands such as Cambridge Satchel got hot in China eCommerce, it was because Daigou recommended them and tourists sought them out. We can build our niche, craft brands almost entirely through this channel if we want. The brands we build will be powerfully real and powerfully trusted. For the Chinese, Brand Britain and The Brands of Britain are primarily the cumulative face-to-face experience of students and tourists in this country. We don’t manage them properly and we need to. Too many of our students and visitors live separate lives to our people. They live in cold flats and mix only with Chinese. They attend class, do homework and then return for instant noodles. They test brands in supermarkets but never know the producers. For many, their view of Brand Britain is of commercial education, distant strangers on streets and well-developed retailers. With a bit of work, we can change that, bring them into the fold and achieve a huge amount more. I spent twenty-two years in China and was twice named as one of the country’s hundred most innovative marketeers. I’d like to do it. Would you?

Submissions and comments for ‘The Last Word’ to: eamonn.duff@mediaone.co.uk

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