Walk around downtown Beijing today and you are likely to come across a Starbucks—or three. For the local Chinese, traditionally a tea-drinking culture, coffee is now in vogue. Instead of meeting for a cup of cha, couples whisper over green-tea lattes, students socialize over mochas, and colleagues chit-chat over frappuccinos.
But making Starbucks the destination of choice for upwardly mobile Chinese has taken innovation—and some play on patriotism. The foreign brand has had to introduce ways to foster a deeper connection with its Chinese clientele. One successful example of the brand localising its content is the Starbucks Chinese New Year Calendar, first introduced last year and again this year.
Chinese calendars predict auspicious dates for everything from family to romance. To tie into this tradition, Starbucks created its own 30-day calendar in February—the same month as the Chinese New Year, the largest and most important holiday in China.
The company filtered content on social media and then linked it to physical store offers. On one day, customers who gave their parents a hug in store could get a three-for-two deal. On another, those who displayed their New Year shopping received free drink upgrades. The campaign generated 100 million impressions on Sina Weibo. Crucially, with next to no media investment, sales during the promotion performed 10 times better than regular-period promotions.
This campaign is an example of how foreign brands that touch on Chinese traditions can boost their standing and create connections. Providing fun encounters with the brand is also important. "It’s all about experience now," explains Kunal Sinha, Asia-Pacific chairman of The Futures Company. "With so much shopping happening online, brands are trying to find ways of engaging consumers and fans in deeper and more memorable ways than ever before."
With a population of over 1.3 billion and a burgeoning middle class, mainland China is perhaps the world’s most important emerging market. The internet has proved to be the key playing field for brands wanting to reach consumers. Rising income has created more consumer optimism. In turn, consumers are becoming more willing to participate in brand marketing, particularly through social media.
Almost a quarter of the world’s internet users are in China: 618 million people, or 45 percent of the population, are online. Eighty-one percent of these access the Internet via mobile handsets—and instant messaging is the most popular online activity. As such, WeChat (also known as Weixin) has now become the second-largest active app chat service in the world, with near 400 million active users a month.
Ecommerce is also soaring, and group buying is the fastest-growing online activity (followed by travel booking, online shopping and online payments). Eugene Chew, head of digital at JWT Shanghai, the firm responsible for Starbucks’ New Year Calendar, believes that mobile payments are one area in which China has overtaken the rest of the world. While most spend money on apparel, Chinese Netizens can and do buy anything from groceries to cars online.
The three digital giants in China — Baidu, Alibaba and Tencent — have focused their services on mobile in recent years. "They have changed the way we live our daily life in China," says Jonathan Ip, digital executive creative director for Greater China at Saatchi & Saatchi. "From communication services to shopping to banking products to TV content and even transport services, it all goes into our smartphones and tablets. So brands in China now are focusing their communications on the mobile."
The growth of ecommerce, combined with the rise of mobile (roughly half of the population owns a mobile phone), has made brands smarter about how to market in China. Mobiles are personal platforms. As such, Ip adds, "marketers are also able to create a closer relationship with consumers, tailor-make services and create relevant content in order to gain loyalty toward their brand." Gone are the days when brands could simply create their own social network or big flashy flagship site—instead they should utilize free platforms such as WeChat, Sina Weibo, and Taobao, which are already used by hundreds of millions to socialise and to shop.
One example is the Chinese internet apparel brand VANCL. Founded in 2007, it has become something of a cultural icon through allowing consumers to customize the brand online to reflect their own tastes. VANCL competes with the likes of Taobao and JD.com (formally 360buy.com). To carve its own space in the marketplace, it created a template ad in which consumers could change the text to make the ads about themselves and reflective of their own style.
Consumers can also set up their own online store by selling VANCL’s clothes over social media, effectively becoming resellers for the brand—and earning a commission. Through this non-traditional approach, VANCL has created a sense of belonging among consumers who, in turn, are helping to shape the brand and are performing its marketing for it.
Ip advises that this is the way brands are innovating in China and represents the way forward: "Create intimate moments that build highly targeted relationships with your customers on an individual level. Blend in relevant social tools and behaviours (ratings, posts, tweets, images, social stuff). Make everything simple to share."
At the higher end of the market, the British luxury fashion house Burberry has also sought to seduce consumers online through a year-long partnership with WeChat.
As part of its Burberry Prorsum womenswear Autumn/Winter 2014 runway show, the brand used WeChat to allow users to unlock audio on key runway looks, follow the show’s guests, and personalise digital versions of "Runway Made to Order" plaques. Personalized ponchos and accessories are also available at the e-commerce site.
With the luxury market becoming more segmented such customised touches are proving a hit. Consumers in second- and third-tier cities still lust after luxury brands with prominent logos, but better-travelled consumers in Beijing and Shanghai are increasingly spurning logos (which are easily counterfeited) and instead are looking for the latest limited edition or exclusive item. By providing personalised online plaques and accessories, Burberry has tapped into a desire to join an elite club.
China’s history also feeds into its consumer behaviour and gives brands an opportunity to innovate with communications. Previous generations associated spending time outdoors with farming and poverty. But as China has become more urban (some predictions say that by 2030 up to 70 percent of the population, some 1 billion people, will be living in cities), a younger generation is starting to value "outdoor" culture. Harley Davidson clubs are on the rise, as is hiking. And travel holiday excursions to places such as Mount Everest are becoming more popular. Successful brands draw on this to try new tactics that take inspiration from behavioural changes. Louis Vuitton, for example, has taken its most important Chinese customers on a helicopter- and horse-riding safari in Mongolia.
A new awareness of health and wellbeing has also risen out of longer living expectations, while China is one of the most polluted countries in the world. As such, any sectors that protect families and children are growing fast. Despite teething problems including an initial lack of charging stations, Tesla is the new must-have car, according to The Futures Company’s Sinha, who states that the company has delivered more than 1,000 cars in the past quarter.
It is not only electric cars that have grown. "A PM2.5 respirator search on Taobao will yield a list of 30,000 products," adds Sinha. "Organic foods grew by 100 percent over last year. Gas masks, air purifiers for the home — all going like stinky tofu."
One thing is certain. Whether they buy stinky tofu or a Starbucks, consumers in China are becoming more diverse, more demanding, and, crucially, buying brands that innovate and make themselves into a destination, whether online or in-store.
This story originally appeared on Campaign Asia.