Here’s A Thought – Eight Ways To Fail In China

Type ”Business in China” into Google and it pulls up a whopping 3,254,750,000 entries; the same search on Amazon returns 48,244 products. We can safely assume that doing business in China is important for every company today.

China’s is now the second biggest economy in the world  – it’s been growing by an average of 10% over the past 30 years  – and this blooming market shows no signs of slowing down any time soon.

But it’s also a market with a unique history, culture and political system – a combination that presents very specific challenges to global brands entering the market in the hopes of reaching 1.3 billion potential consumers.

At DDB,  we’ve uncovered a unique set of barriers and drivers to doing business. Here are our eight fool-proof ways to fail in China.


1. Fully rely on your global experience

Most global brands operate in Western, mature markets that demand similar approaches to marketing communications. Consumers’ cultural background and market situations may vary and marketing is similar from Boston to Berlin.

But China is still in a class of its own – it can annihilate global experience and render it useless. Talent is a rarity; Local talent knows the market inside-out, but usually has little much experience of working in a global context. Foreign talent is experienced on a global scale, but lacks the in-depth understanding of the Chinese market.


2. Be ultra-strict on global brand guidelines

Consistency is key for a global brand, but staying true to the same values and attributes, regardless of where and who you are selling will not reap the benefits in China. The language and culture here makes it imperative for global brands to be relevant, and understood.

French hypermarket chain Carrefour got it right. The Chinese expression is “Jia Le Fu” – which loosely translates into “House of Happy Family/Home of Happiness & prosperity”. It’s a huge success throughout China.


3. Compete on price

China is a country where a worker from a rural area earns US$200 a month – brands need to be able to reach the top and the bottom of the pyramid.

A myriad of local Chinese suppliers manufacture inexpensive products with similar functionalities to global players. Not only cheaper, quicker, and better quality, but they are available everywhere. Distribution is key and if you cannot go there, eCommerce can.


4. China is China

There is more to China than the big cities like Tier 1 cities like Shanghai or Beijing. Nanning or Ningbo may be similar in terms of population size, but consumers in lower tier cities think, behave and consume differently from their counterparts.

Values, media consumption, purchasing criteria and trigger points are completely different. Careful planning of paths of purchases and matching marketing communications is vital.


5. All consumers are the same

The thought is as understandable as it is tempting: getting through to basic emotions can be key to marketing communication success. Chinese consumers can decode messages in a different way than most. The triggers can be completely different and surprising.


6. When in doubt, be loud

In some categories, the market leader benefits from significant media investment. Astrategy to outspend competition results in a significant stab at profitability.

For an established brand like McDonald’s, Social Creativity campaigns have helped drive creative effectiveness and create the ShareValue than traditional media may not. See the case study on www.ddbchina.com/mcwings


7. You cracked Social Media already

Due to its unique culture, history and political system, the Digital landscape in China is vastly different to any other place in the world. The usual suspects are blocked and China has its own successful local social platforms; RenRen (Facebook), YouKu (YouTube) and Weibo (Twitter) are more superior in their usability and functionalities. In China, the speed of information and impact is much higher than in the West.


8. Be hasty, be greedy

China is very tempting. A country running on rocket-fuel, an entire middle-class emerging with new needs for new products. Many companies entering the market cannot wait to get things started fast in order to stake claims early.

From a Chinese perspective, global brand value is only one side of the coin: potential demand and sales are the others. Regardless of which Chinese province you want presence in: take your time and make concessions.


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  • Cleo

    In other words, “don’t dig here.”

    • mr. wiener

      More like “If you sup with the devil bring a very long pair of chopsticks”.

      • Craig

        Or: “here’s a bunch of stuff you already knew, dressed up with buzzwords.”

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  • Danny

    One needs to adopt a glocal strategy instead of global as in China, no 2 Chinese are alike due to differences in income, education, regional culture, personal beliefs and value system. For example, Beijing Chinese are more patriotic and reserved while Shanghai Chinese are more open and receptive to western culture and values. One simply cannot generalize the Chinese as ‘Chinese’. They may looked ‘yellow’ to a foreigner on the outside and thus considered the same but in reality they are not. One good example is Chinese food. The style of food preparation and taste is varied in different parts of China. Hence, if you are a food manufacturer and distributor and wished to penetrate the Chinese market, you need to understand the regional culture, consumption habits, behavioral traits and taste of the local people.

    The challenge for all marketers wishing to penetrate the Chinese market is how do you cluster and segment the ‘Chinese’ and come out with a cost effective targeted marketing strategy using the various marketing tools and media platforms available?

  • Jack

    What this article misses is perhaps one of the most important elements of conducting business in China. It involves dealing with the local & national governments. As any laowai small business owner will tell you, it’s not only what you know but who you know – especially in China. The Chinese market is best described as having quirks based on region, age groups & seasons among other cultural factors. Developing a good reputation and increasing “guanxi” are essential. And the best way known to increase guanxi is to buy it fair and square. Yes, bribes my friends. And lots of them to the right government stooges. This behavior is not frowned upon but encouraged for startups and established businesses alike. Don’t forget to grease the right pockets of greasy chink officials. The ROI down the road make it a no brainer. Nuff said…

  • donscarletti

    Sina Weibo is far superior to Twitter by integrating blogging, photo sharing, etc. Basically it takes the best features of Facebook (status updates and photo sharing) and ditches the stupid apps and bios.

    Youku/Tudou, well, they don’t have quite the same tech as Youtube, the search isn’t as good, the compression isn’t as sophisticated, the movie player until recently was a little bit hit or miss, but it doesn’t respect copyright, which is great, but maybe not admirable.

    Renren is an unusable, buggy, poorly conceived, poorly implemented piece of crap. Unredeemable in every way.

    Don’t generalise the Chinenets just because Sina Weibo eats Twitter, most of it is still garbage.

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