developing successful brand strategy in china with practical steps

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Developing Successful Brand Strategy in China

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We started with a simple desire – to help enterprises in Asia become

market leading brands for tomorrow.

To date, partnering over 600 brands.

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ASL IP-centric Growth Model TM

STRATEGY

PROCESS DESIGN

A.S. Louken Business Growth Solutions

expand

A.S. Louken Branding

establish

addito creative

express

A.S. Louken Emplify

engage

ALPlay Service Factory

empower

A.S. Louken Education

education

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Partnered more than 600 Brands since 2000

A Member of the Ebeltoft Group Networked to 22 countries, these Ebeltoft members have worked in over 70 countries worldwide

Australia – Brazil – Canada – China – Denmark – France – Germany – India – Italy – Portugal – Romania – Singapore – Spain – Switzerland – Turkey – UK – USA

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零售业

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Brands

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Differences

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Know Yourself

Reposition Your Brand

Adapt Your Offerings

Map Out Your Strategy

Know Your Market & Consumers

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Your Brand

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KSF

What is your attributes of success?

Can it be transported to China Market?

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HUGE

diversity in ‘one’ market

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Operating Environment

Consumer Preferences

Geographical Differences

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Do Not Assume

• DO NOT assume operating environment will be the same as Singapore

• Always check out the differences as it will likely affect your business offerings

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Get Your Feet Wet

Being on the operational ground allows you to discover some of the fundamental differences in operations and processes between Singapore and China

(which might result in business model modification)


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Entered China in 2007

6 bilingual childcare centres in Chongqing & Chengdu

Started a new brand targeted at mid-high market after getting to know the market better


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China Singapore

Kindergarten refers to full day programme. Seldom have option of half day & full day programme

Dual system in singapore

Separate bedroom requirements Classroom turned into sleeping area during nap time

Outdoor courtyard playground area to be no less than 280sqm

Depending on size of school; minimum space requirement per child is 3sqm Size of school no less than

1500sqm (min.6 classes of 25 to 35 students)

Difficulties with registering company in the education sector

Many tuition centres are registered as

‘enrichment’ classes


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Look beyond just the Tier-1 cities

• DO NOT assume that Tier 2 and 3 = Little spending power

• Know who are your target audiences in China. Use proxy brands as a rough gauge to benchmark spending power of consumers in the city.

Survey the Market


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Source: Knight Frank China Retail Spotlight 2011


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High-end Grand Pianos 1 grand piano could go up to S$200,000

Found to be ‘positioned’ as a luxury item among non-music players in the Tier-2 cities

Used as: • Investment • Furniture display at home (to uplift social status and perceived sophistication )


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Adaptation

• Adapt your offerings and communications according to local consumer preferences

• DO NOT use a cookie-cutting model for all markets. What works in Singapore might not work in China.


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Relevance

• Do not overestimate the power of ‘international’ brands. Even worldwide-recognised international big brands need to be ‘localised’ to increase relevance to appeal to the Chinese.

Increase Relevance


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Global Brand, Regional Face Do not overestimate the attractiveness of all-things westernised in China

Taiwanese Celebrity Show Luo

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Global Brand, Regional Face

Chinese Supermodel Liu Wen

Case: Estee Lauder • Top 3 cosmetics & skincare

brands in China • Balances its international

image with a mixture of Caucasians, regional and local celebrities

• Creates convincing make-believe that products are equally suited for Asian skin

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The need for a Chinese Name

Though not reflected in the form of logo, almost all the international big skincare brands have a Chinese name so as to increase brand recall among the Chinese consumers.

索尼福特香奈尔雅诗兰黛


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U.S. skincare brand looking at penetrating China market


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International products with difficult to pronounce names need to be given a Chinese name as well. Either that, or the industry / consumers will devise one.

小黑瓶 v.s 小棕瓶 v.s 小红瓶 Little Black Bottle Little Brown Bottle Little Red Bottle


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Some brands we’ve worked on:

贝微尔 (Phonics translation; Belle )

树之秘密 (Secrets of tree)

壹丰广场 (Top; Prime)

香之味 (Fragrant; taste)


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Popularity of e-commerce in China

Huge growth potential

China has one of lowest internet penetration rates (15.9%) but online shopping penetration rate is high at 70%


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2008 2011

+152%

Online Shopping

Source: 中国数字化新世代3.0 ，The Boston Consulting Group

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Dianping Group-Purchases e-commerce Transactions (July 2012; Amount in ‘000 rmb)


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Taobao’s 1-day sales value reached 191亿rmb on 11 Nov for its 光棍节 promotion

Sales volume was so high that Taobao had to charter a China Eastern cargo plane to deliver goods between Guangzhou and Shanghai


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Almost all major brands will have an e-commerce platform as a supplement channel

Either via own e-commerce site or tapping on existing platform like taobao


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Kinohimitsu, a brand under TRN Networks Limited launched a series of functional drinks in the China market. Kinohimitsu brand was launched via Taobao Mall in Oct 2010 with high take-up rate (despites being priced 30% higher than other functional drinks found online)


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Unique Corporate Entertainment Culture

Other than board rooms, meeting and business deals are also frequently conducted at foot massage palours, hence palours are structured with many private rooms


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Huge corporate dining culture whereby business deals and relationships are bonded over meals. Hence, private VIP dining rooms are important.


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VS

Preference for liquor and wine over beer

Dish-ordering is an art


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Recently conducted F&B immersion workshops for a Singapore F&B player who is entering Shanghai.

Equipping the team with an overview of the market



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Consider if there’s a premium value-added association with Singapore branding

VS

Singapore Brand? International Brand?

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Areas where SG

clearly shines

Areas where more communication will be

required

Education

Enrichment

Healthcare

Beauty & Wellness

F&B Foodservice

Fashion

Furniture

Professional Services

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Tapping on Correct Associations

Started off as a salon skincare brand only available in beauty salons. Repositioned for retail market, including China retail market.

2 Logo variations

For all other markets For China market

A brand from SG, using U.S. R&D technology, ingredients from Switzerland.

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Tapping on Correct Associations

Many salon-grade skincare brands use country of origins to communicate product attributes.

Switzerland is found to be associated with:

• High quality

• Precision

• Good (luxury) skincare solutions

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With more competition, local brands are increasingly improving their brand image and re-positioning themselves as international brands

Huafeng Power is one of the market leaders in the small to mid-sized off-road diesel engine manufacturing industry in China.

Re-positioned as a reliable off-road diesel engine manufacturer who provide better, more cost-efficient power solutions

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Projecting an International Image

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Cookie-Cutter method doesn’t Always produce the same result

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“eBay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose—but if we fight in the river, we win.”

– Alibaba founder Jack Ma

Ebay’s failure to localise to local preferences 2 key mistakes with its platform: 1) Used the same global platform for China, charging fees for sellers 2) Did not understand that trust needs to be cultivate between Chinese sellers &

consumers.; did not allow sellers and buyers to chat on their website

Taobao, on the other hand, understands the locals’ online shopping behaviour and developed a platform that has become China’s no. 1 e-commerce platform today.

Localising Business Model

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Localising Products to Suit Local Taste Preferences and Culture

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Localising Products to Suit Four-Season Climate

More winter collections like boots

Anti-radiation maternity wear and winter collections

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Make Yourself Heard

Do not think consumers will like your brand just because it is an international brand

• The Chinese have a preference for foreign brands, BUT efforts need to be made to engage the consumers

• Do not underestimate the power of social media in influencing purchase decision among the Chinese

• 300 million users on China’s hottest social media platform, Weibo (China’s twitter equivalent) ; 785 tweets per second

• No of fans: • H&M: 316842 • Zara: 226698 • L’occitane: 4062 • Marks & Spencer: NIL

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When in Rome, Do as the Romans Do

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One Prime in Shanghai

SMS marketing Weibo Multimedia info kiosk Monthly events

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Awfully Chocolate in Shanghai

Tapping on internet for effective communication and reach

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Plan Your Route

Map out your expansion plans, allocate resources and work towards it

The size of Shanghai alone is about 10 times bigger than Singapore. With a market as huge as China, there are ample opportunities in the market

One needs to be prepared for bigger & faster growth: • Is there sufficient resources to ensure pace of

capability development matches the rate of expansion?

• Is your internal team able to support the network? • Is your logistics system able to support the

expansion plan? • How can you ensure consistency among the many

outlets?

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240 outlets in 41 cities

across China

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Leveraging on Area Franchise for Expansion

Self-owned 1

Franchise

Support Team

Self-owned 2 Branch

Office

Shanghai

Beijing

Other Cities

Area Franchisee 1

F Outlet 1 F Outlet 2

Area

Franchisee 2

F. Outlet 1 F. Outlet 2

BreadTalk

Self-owned 2

Self-owned 1

Singapore

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KNOW YOURSELF

KNOW YOUR MARKET & CONSUMERS

REPOSITION YOUR BRAND

ADAPT YOUR OFFERINGS

MAP OUT YOUR STRATEGY

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May your brand growth journey take flight!

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A.S. Louken

China Entry Solutions

Branding and adaption

China expansion programme

Franchising and licensing strategy

Partner search

expand

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Thank You

Luke Lim

[email protected]

www.aslouken.com

developing successful brand strategy in china with practical steps

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