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Why Retailers in China Must Sell Experiences Over Products

Posted By: SGK April 18, 2018

This blog post has been contributed by Gary Yip, General Manager of Brandimage, China. 

Brands in today’s climate cannot afford to stay still. Earning and re-earning loyalty at every micro moment in the customer journey is crucial to staying relentlessly relevant.

This is especially true in China than anywhere else. In fact, five of the top 10 and almost half of the top 50 brands in China are in the technology field — while the rest have all invested substantially in digital to better connect with consumers.

Recently, China’s popular messaging app, WeChat reached 1 billion monthly active users. From tasks ranging from the basic texting and calling, WeChat as a platform has evolved to allowing users to pay bills, book private hire cars or more recently deploy health technology through artificial intelligence. WeChat has become an integral part of the Chinese identity.

The accounts created and used by companies and brands have also increased — totaling around 3.5 million in September 2017. Similarly, brands are concurrently utilizing the social media app, Weibo to connect with consumers and deliver their brand messaging. By using this “digital empathy” approach, brands are integrating social strategy within the retail mix — using these apps to sell items ranging from sports apparel to food products.

Consumers love browsing at stores and buying online, and that trend will continue to grow globally. However, that does not mean that physical spaces are redundant as opportunities flourish for online retailers to explore and benefit.

Are pop-up shops the answer?

It is beyond just being a social China — it is right now a 'cultural' China. Some brands are really spot -on with their marketing mix and they understand what drives success. They recognize it's not about the data, or the algorithms that you create on that data. The reality is that the Chinese consumer has created their own algorithms in their life.

With advancements in technology and digital shopping abilities, brands that create seamless connectability will stand out throughout the internet of life. From colourful graffiti to edgy architectural wonders, flashing neon lights to lush-green flora, people are more likely to share selfies and photos of spaces with interesting elements.

Here are a few questions to consider when building brand experiences:

  • Is this digital experience interactive and shareable?
  • Will customers remember this space?
  • Does this inspire awareness, purchase and loyalty?
  • What does this mean for brands?

As we transition to the Experience Age, brands are not only embracing creating brand experiences within a retail space, but have also experimented with dabbling in new verticals such as Muji dabbling into the hotel industry. These experiences are crossing into both digital and physical spaces, creating a cohesive look and feel in other areas.

Korean makeup brand The Face Shop has partnered recently with soft drinks giant Coca-Cola with a new unique cosmetics range. The makeup range collaboration includes cushion compact, powder pact, five cream lip tints, five lipsticks, three gel lip tints and an eyeshadow palette – all in Coca-Cola pattern packages.

Brands that have emotionally connected with the Coca-Cola brand can now enjoy a new touch point. As quoted by Jing Daily, “As beauty becomes a more nuanced and subjective concept in China, brands must choose the kind of beauty they want to represent.”

READ: The Winning Brands Differentiate with Digital Packaging

The Experience Age can also be seen in luxury brands with the latest example Hermès. The brand has recently relaunched a mobile app called H-pitchhh. Much inspired by the traditional horseshoe tossing game that can be traced all the way back to Roman soldiers, it allows players to virtually toss a horseshoe using a swipe on iPhone, not unlike throwing a Poké Ball in Pokémon Go.

While the Hermès game is available globally, it is an especially smart strategy for China, where the average luxury consumer is significantly younger and more receptive to gaming.

How far is too far?

By expanding product lines, brands in China must also be aware of unforeseen cultural issues. In a time where consumers are expecting brands to stand up for particular movements, there must be a deep evaluation to how this might cause a ripple effect for your brand globally.

All in all, retailers must use digitally driven strategies to offer differentiated and accessible online experiences that not just spark conversation, but also enjoyed on-the-go, anytime, anywhere.

About Gary Yip: Gary has over 25 years of Advertising and Branding experience in China & APAC. He is a result-oriented professional from Singapore with a proven track record of leading clients such as Virgin Atlantic, Pernod Ricard, LVMH, Bacardi and Sands Macao Cotai. Having held leadership roles at advertising agencies: Ogilvy & Mather, Y&R and Saatchi & Saatchi since relocating to Shanghai in 2007, Gary has a solid track record of positive and long-term business partnerships. Gary’s strong interpersonal skills, cultural sensitivity and fluent Cantonese and Mandarin enable him to lead local teams to global-standard operations and is a recognized expert on brand localization and international marketing implementation.