Buzzwords: Global China
Since the introduction of Deng Xiaoping’s Open Door policy in 1978, China has evolved to become both a powerful projector of global influence, as well as a sponge soaking up international trends and cultures. Chinese citizens’ national identity, their perception of the world around them and where international brands fit into all of this, are all essential points to consider should you wish to craft a truly global marketing strategy in the Middle Kingdom (zhong guo中国).
Hallyu - 韩流 -한류 -
Two sides of Hallyu
Hallyu - 韩流 (Korean – 한류), which literally translates as the ‘flow of Korea’, refers to the influence and ‘soft power’ of South Korean culture, which has progressively grown in China since the establishment of trade relations in the early ‘90s. Hallyu is considered by many to be the successor of Japan’s pop-culture influence in China, and with two-way trade between South Korea and China valued at an impressive $274.2 billion in 2013, Hallyu has been acknowledged by political leaders of both states as a useful tool from which to promote bilateral relations.
The ‘wave’ has taken on many forms; from the popularity of South Korean soap operas, to K-Pop (think Gangnam Style), to K-Beauty (the popularity of Korean beauty products and trends amongst Chinese consumers – with Korean beauty leader, Amore Pacific, holding a 2.1% stake in China’s 131.4 billion-yuan skin care market in 2013, the 12th-biggest share).
In particular, South Korean entertainment shows in China act as a powerful platform from which South Korean products and brands can be promoted amongst Chinese consumers. A great example of this can be found in the phenomenal success of South Korean soap opera ‘My Love from the Star’, which has racked up a massive 2.5 billion online views in China. Following an episode in which the show’s heroine enjoys a traditional South Korean meal of Chimaek (치맥) – fried chicken and beer - Chimaek fever gripped China, with Chinese imports of Korean imported beer hitting $1.04 million in March 2014, an estimated increase of 200% from the previous year. China’s sudden craving for Chimaek is a great demonstrator of the power entertainment holds in shaping consumer behaviour in China.
The popularity of South Korean culture in China has occasionally provoked some head-scratching among Chinese Party officials. With officials putting aside time in the 2014 annual National People’s Congress to ponder the success of ‘My Love from The Star’. Party members mulled the reasons China’s state media has failed to replicate the show’s success. With one political advisory board member remarking; "It's more than just a Korean soap opera, it hurts our cultural dignity." Never the less, the Hallyu wave in China looks set to keep growing.
Western Etiquette -
Friend or foe? China’s relationship with the West is a complex affair. Although the pull of Western culture and brands remains influential in China, Chinese consumers should not be perceived as rushing to become Westernised, but rather as aspiring to a global identity, with distinctly Chinese characteristics.
One interesting area in which the crossroads between East and West is apparent is the minefield of etiquette. China’s rapid development and the increased mobility of Chinese tourists worldwide has led rise to concerns amongst Chinese policy makers that the behaviour of the country’s 109 million outbound tourists is tarnishing China’s reputation abroad. In response to well-publicised embarrassments, the Chinese government published its ‘Guide to Civilized Tourism and Travel’ which includes gems such as ‘don’t leave footprints on the toilet seat’. The CCP even took things one step further with the drawing up of a ‘Tourism Blacklist’ whereby tourists caught in the act of behaving badly are stripped of their right to travel.
Within the Mainland, etiquette schools have sprung up catering to wealthy Chinese wishing to distance themselves from the Fuerdai stereotype, and develop a truly global etiquette skill-set. Beyond lessons in the use of a fish fork and the correct pronunciation of luxury brand names, demand for these schools and their services is revealing of the increasingly global mind-set among privileged Chinese, who are seeking to achieve confidence in international etiquette as a basis from which to internationalise their business and personal interests.
On the flipside, international players interested in entering the China market would do well to start with gaining insight into Chinese etiquette and cultural norms. Many of the blunders international brands make in China stem from cross-cultural misunderstandings, or simply result from brands failing to localise their products and services, instead, attempting to project Western values and tastes onto Chinese consumers.
Haitao - 海淘 -
What do you get when you combine thirst for high quality international products with the world’s most dynamic ecommerce market? - Haitao 海淘! The term – which translates as ‘searching abroad’ - describes the phenomenon of Chinese consumers buying international products via overseas online shopping platforms. Haitao has evolved to become a powerful phenomenon in China, with a recent report from Nielsen estimating that 18 million Chinese spent 216 billion yuan via Haitao in 2013 - a value predicted to reach 1 trillion yuan in 2018.
The most popular Haitao products can be split roughly into two categories; those which are of high-stake importance to consumers’ health and wellbeing - examples include baby milk, baby products and foreign medicines - and secondly luxury goods, with many Chinese shoppers hiring Daigou 代购 agents to purchase products abroad on their behalf.
Daigou -‘buying on behalf of’ - is a popular means of purchasing foreign products - with a 2013 survey finding that at least 60% of Chinese luxury consumers have used Daigou agents to purchase luxury products from overseas. However, using Daigou is not without its setbacks, with many agents evading Chinese custom fees to import goods illegally, and others supplying shoppers with fakes. Shoppers wishing to cut out the Daigou middle man also face obstacles in terms of language barriers, payment methods and prolonged delivery times.
In response to this gap in the market, a number of organisations have stepped into the Haitao fray. Among them, the Chinese government – concerned with the flouting of international tax laws by Daigou agents, and wishing to increase luxury goods revenues in the Mainland market – has established a number of e-commerce pilot zones, whereby Chinese consumers can purchase goods on foreign websites and have their orders shipped under the supervision of Chinese customs. Meanwhile international players have also begun to catch on to the Haitao opportunity. Amazon, for example, has recently launched an international shopping feature, allowing Chinese shoppers access to a number of the store’s international market places, and streamlining international purchases.
