Why Western brands have failed to succeed in Chinese market?

Since China opened up to Western investment, some of Foreign’s most important brands have failed to succeed in the Chinese market.

Here are the main reasons why:

Efficient methods in the companies’ home countries are not always efficient in China.

International companies usually take what is efficient in their home countries, like the United States for example, and try to transplant these methods in China instead of adapting their methods to the local market. The companies, therefore, did not take the local conditions enough into account to create business and advertising strategies tailored to a Chinese environment.

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Hong Kong consumers and Chinese consumers are different

A lot of foreign companies are surveying consumers in Hong Kong and tend to extrapolate their findings to China. However, it is not beneficial for them since China and Hong Kong are different markets. Chinese and Hong Kong consumers, therefore, have different needs and expectations.  Brands are however often choosing the easy way out by assuming both locations are the same segments.


Western brands have to confront homegrown brands

International brands often make decisions and create content from their head office located outside of China and translate marketing and creative information into Chinese. The fact is that those companies don’t care enough about local customer needs. This is why local brands are taking market shares away from multinational brands.


It is necessary to keep in mind the fact that the Chinese market is transforming much faster than Western markets which means that the Chinese consumer is not mature and is liable to change.

The passage of big brands into niche-branding

Western brands are adapting themselves to the consumer’s new desires. Over the past years, Chinese shoppers have increasingly been looking for exclusive products because they want to differentiate themselves from others. Because of this shift, the companies have to combine luxury and exclusivity in order to launch new niche brands and maintain the same rate of growth as before.


Niche brands and innovate agencies

Smaller and newer agencies are synonymous with innovation and creativity. These agencies can be useful in order to take advantage of the space created by niche brands and it is for that reason that foreign brands in China are choosing smaller agencies instead the big ones.

Campaigns about the experience.

There are more than 618 million Internet users in China, which means that digital campaigns have become vital for international brands to reach Chinese consumers. 90% of Chinese internet users are also using social media, Western brands should therefore focus on social media-based campaigns. This type of digital campaign requires providing a special experience to the Chinese consumer and spending more marketing budget on digital in China.


Celebrities have different meanings in China.

Foreign brands must be careful with advertising campaigns where they are using celebrities. It may sound strange but hiring a Western celebrity to advertise a brand in China could be a mistake because Chinese clients personalize celebrities differently than foreign clients. The Western companies should therefore think about another method to reach the Chinese client.

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Brands willing to succeed in the Chinese market should therefore ensure they understand the market and that they are adapting their services and products to meet the local needs and demands. Indeed a foreign company’s success in China is based on a good understanding of cultural differences and of the Chinese market’s basic principles.

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