After being open for international business for more than 30 years, companies from China are now increasingly venturing abroad … but probably not for the reasons you're assuming.
In fact, for many of these companies, the incentive for moving into foreign parts is to build their brands, not exploit new markets. China, after all, still has a consumer market with massive potential.
But for products targeting middle-class consumers, for example, Western countries offer a higher concentration of possible customers in a smaller area. They' re sophisticated consumers, too, and the experience Chinese brands gain by marketing to them may be very helpful when developing their next generation of products.
Why, then, do so many brands that are household names in China struggle for any recognition in the West? According to a poll conducted by HD Trade Services, 94 percent of Americans cannot name even a single Chinese brand, though they certainly buy plenty of Chinese-produced goods.
In other words, the technology, quality and the products themselves are interesting and competitive. Where Chinese brands fall short is in perception--and ultimately, in communicating effectively with their potential clientele in the West.
For example, WeChat--the hugely successful mobile platform that has taken China by storm--encountered some teething troubles when trying to launch outside China. Despite a huge advertising budget and hiring soccer stars including Messi and Neymar to speak for the brand, WeChat failed to beat WhatsApp or Facebook Messenger in any of 15 targeted markets, which included Brazil, Hong Kong, India, Argentina, Malaysia, Mexico and Indonesia.
WeChat's experience shows us that what works very well in China--i.e, superstar advertising--not only does not play in other markets, but in certain cases it may even have a repellent effect.
At Astronaut, our advice to Chinese companies entering foreign markets is to build up their brand's exposure away from traditional advertising. Using digital media channels to reach and win over the right consumers with informative content can end up creating an army of opinion leaders--genuine opinion leaders, as opposed to the paid superstars or bought KOLs (key opinion leaders) commonly seen in digital marketing in China.
To achieve this, specialist companies like ours need to use their knowledge of Chinese brands in combination with insights of Western markets and audiences. In that vein, here are the three "golden rules" for any Chinese company wanting to build a successful brand in the West:
1. Tell stories
For a brand to take root in a Western country, its products have to embody some "meaning"–-a heritage or story that defines its character and market placement. The story needs to be engaging and exciting to capture the hearts and minds of a Western audience--and it has to be true.
2. Use the right channels
Western consumers have pretty much seen it all when it comes to advertising tactics, and will simply ignore communication strategies that rely on old, stale methods. A better strategy is to spread the word on trusted channels such as news outlets or special interest digital channels. Research from the American Press Institute has shown that well-known media channels are still the most trusted when it comes to receiving information. Link your brand stories to these channels and the right people will be attracted to your brand.
3. Every communication needs to generate feedback
In foreign markets, it's crucial to gain insights from every piece of communication. How does the reaction to your product differ from region to region? Which features do they like best? Would they buy your product, and if not, why not? As well as providing answers to these crucial questions, feedback will also help you to create a database of people who are actually interested in your product. Stay in contact with these people, because as time goes on, they will likely shape the opinions of others too.
Michael Kaltenhauser is executive creative director of digital marketing agency Astronaut, a member of the Pico Group, which is included on the latest Special Events "50 Top Event Companies." Kaltenhauser set up Astronaut in Beijing after working in central Europe and London with global advertising agencies. His work has been honored with Effie and Art Directors Club awards.