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Engage your Chinese Consumers Better

China Local Brands Gain Favour

2 Chinese female shoppers wearing masks

An interesting story form Nikkei Asia caught our eye Friday morning. In a way it is a rehash of a story we saw on Caixin a month ago re the sales pattern during the 6/18 shopping promotion. To recap,, the originators of the festival reported that  “over 70%(of sales) were Chinese.” Alibaba also reported similar figures. Some observers are interpreting this that foreign brands, esp luxury, have lost their lustre and allure among Chin’s younger gen consumers.

However, there may, we feel, be other factors at play. To begin with, during the lead up to the festival, JD in particular put considerable effort in to mass promotion. Everywhere we looked it was JD and 6/18. Local brand seemed, to us, to be in the forefront of mass advertising.

Secondly, lets not forget that the globe is only just, ever so slowly coming out of a massive close down. Production and logistic issues have hampered brands ability, not just to produce but also distribute. The law of supply and demand means that shortages drive up prices. This ends up as an advantage to local manufactures who can not only “deliver the goods” but at a competitive price.

One fact overlooked is the steady improvement in quality of MIC goods. Particular in some sectors such as smart phones, fashion and cosmetics. Several years ago, Apple for example, were quick to blame “National Pride” for the rise of Huawei at the expense of their I-phone. They refused to accept the obvious: Huawei made a superior phone for around the same price. Very little to do with national pride when not only Chinese were flocking to the brand. Of course, eventually ways were found to counter that.

However, it could also be down to a state of uncertainly in the market. Consumers are still coming to terms with “the new normal” and perhaps cutting their dress to fit the cloth. Recent figures tend to point to a slow down in China’s economy and a GDP slightly below expectations for the second quarter. China’s 7.9% Second-Quarter GDP Growth Falls Short of Expectations. Again, this is not, we feel, unexpected, given the incentives and financial assistance poured in to the economy over the past year and a bit.

Whatever the reasons, there is little doubt that in many areas today, China made products are up to and in some cases exceeding the quality standards of imported. China made goods are certainly enjoying the high wire ride right now. But lets wait a few more months to see how the figures shape up after some form of normality settles on the world.

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