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, JD.com, 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.

Published by The Bic

Bicyu is a NZ registered, British owned MarTech business based in Beijing providing marketing, tech, education and information services to European, NZ, Australian, UK, African, and Asian firms doing business in China. We work with local ones too. We've been here doing this since 2003. We also incorporate Aim2D and Uengager in our small brand list.

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