Brands with stores on both sides of the same road are becoming a more frequent sight in
Shanghai. The growth of the Chinese economy has provided a healthy environment for brands to grow and expand to the point where, according to brand expert Jack Derong, “there has been a visible dilution in the quality of service”.
Jack has been in advertising and branding for more than 15 years where he has worked at international agencies in Singapore, Canada and China. He is now the owner of Effusion, an integrated creative agency based in Shanghai.
Hi Jack, welcome to chinaSMACK. What have you been seeing with regards to brand expansion?
We are seeing an explosion in the number of outlets for some brands. These brands are developing so rapidly within China to a point where there has been a visible dilution in the quality of service.
These are the same brands that have such strict brand guidelines and are copy pasted all over the globe, everything looks the same, but in China it just isn’t.
Are these brands putting themselves at risk?
I feel that these types of brands are compromising themselves in order to expand faster than competitors and capture market share. Whilst it’s easy to measure sales increases, it’s not nearly as easy to measure the perception of a brand and the possible damage that is being done.
Why is the quality of service being diluted as a result of expansion?
It takes time and the right people to achieve a high quality of service. It’s naïve to think that these brands are always recruiting the most appropriate people and that they are being trained to the expected standard. There just isn’t enough time, and the quality of service suffers as a result.
Are there any ways that brands can limit or prevent this?
Brands really need to put emphasis on two main areas, which are training and retention of staff, especially the retention of key staff such as managers. Brand books and guidelines should be known back to front. In-depth training and inductions need to be given to new staff to bring them up to speed and educate them on the brands standards and what is expected of them.
I’ve experienced situations where employees of these brands don’t know parts their menu or some of the products they offer. Sometimes items even become unavailable in what seems to be an attempt to avoid an awkward conversation and save embarrassment of not knowing what it is.
Training should be ongoing throughout the course of an employee’s time at the company, it’s important to constantly reinforce brand values and ensure a certain standard is maintained.
Retention of key staff is also vital. These are people like managers who know the brand well; they are running the shops and have been trained to a high level. Great lengths should be taken to keep these people, but retention of talented staff is a big problem across many industries in China.
Do you think brands should stop opening outlets so aggressively?
Not necessarily. I understand the reasons for their rapid expansion; it’s just that maybe they need to manage it more carefully.
What is your advice for similar brands coming to China?
Be realistic. Be realistic with sales figures, be realistic with market share. It all takes time.
Stay in touch, talk to people and understand the market. Keep re-evaluating your brand and look for continuous ways to improve. Don’t get complacent.