Why being ‘foreign’ is no longer enough to gain trust in China

May 29, 2018

Building trust in China is an absolute must for any brand, and even established overseas brands have an uphill battle without the right digital marketing strategy localized for China.

While foreign brands in China have traditionally enjoyed high levels of consumer “trust”, such as infant milk formula providers, there is growing competition inside China as more companies from overseas enter the market.

A decade ago there were less foreign brands penetrating the Mainland China market and major brands such as Starbucks, Fonterra, Kerry Group, Nestle, and others could seize swathes of lucrative market share. However, with the arrival of cross-border ecommerce and numerous bilateral free trade agreements, a flood of foreign products and services has entered the market (on average 500 launch on a daily basis).

Foreign-language packaging and an exotic brand name were once persuasive marketing techniques juxtaposed with local brands and limited foreign products showcased in a physical store. However, unlike traditional malls where there is a ceiling number of available product-lines, ecommerce sites have unlimited capacity, also known as the “long-tail effect.” A search on the e-commerce site JD.com, for example, returns 82,000 product listings for “imported wine” in Chinese.

Making your brand findable online

To aid their purchasing decisions, Chinese consumers turn to a variety of channels to research new brands, including all kinds of social media and search engines. Baidu search, for example, will often populate results from Zhihu, which is a popular Chinese community-based question-and-answer site.

Search for Australian beef brand First Cut on Baidu, Source: Baidu

If for any reason a customer finds your brand’s product on a physical retail shelf or an online customer listing but can’t find relevant information about your brand via a quick Baidu search, trust is all but lost. Consumers will immediately have concerns that your brand isn’t established and verified or is potentially a fake brand posing to be foreign.

Populating discussion about your brand on Zhihu is one simple method to build an online presence without even investing in a website or social media account. But be wary, Chinese consumers are known to look at multiple checkpoints before making a purchase and their decision-making process shouldn’t be compared with Western consumer behavior. Hence a presence on a multitude of online platforms is very much a necessity. Additionally, while the West might assign a neutral level of trust to a new item and then raise that level with more interactions and knowledge, Chinese consumers are far more likely to allocate negative trust to new purchase items and need far more convincing.

Importance of the right digital marketing mix

 

According to a 2016 survey from McKinsey of 10,000 in-person interviews with people aged 18 to 56 across 44 cities, “the number of consumers willing to switch to a brand outside their ‘short list’ dropped sharply.” In the apparel segment, for example, the percentage of consumers in China willing to consider new brands declined from approximately 40 percent in 2012 to below 30 percent in 2015.

This is why it’s crucial for foreign brands to invest in a variety of digital marketing channels and techniques to overcome new customer hesitation as well as build loyalty with long-term customers. For most brands this well-balanced online marketing mix should contain the following:

  • WeChat account (social media chat platform) and regular content production
  • Weibo account (Twitter-like micro-blogging site that now doubles as a live-streaming platform) and regular interactions and postings
  • Up-to-date Zhihu questions and answers
  • Mobile-friendly website optimized for Chinese consumers
  • Featured posts by key opinion leaders (KOLs) distributed and shared on social media
  • Product demonstrations hosted on live-streaming sites or video sharing sites such as Youku or Inke.
  • Online marketing campaigns in China with established brands in other industries

Up to date & verified online presence

Beyond launching online campaigns and activities on these and other channels, it’s important that you keep your online presence active and ongoing. A spike of questions and answers on Zhihu in 2015 might help boost confidence around the time of posting but it’s important to maintain an active presence with your audience at regular intervals AgencyChina can also help you navigate the process of verifying your social media accounts which is another vital step in building trust and limiting the influence of “brand imposers.”

Want to find out more about how to best leverage the many digital marketing channels available in China? At AgencyChina, we specialize in helping you design a better marketing strategy to build a relationship with Chinese consumers as well as a sustainable business path in the China market.

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