On Thursday 19th June, New Zealand Trade & Enterprise invited me to speak on digital changes and trends in China and what the exciting opportunities are for exporters.
Click on the video below to watch the full interview.
What new digital trends have come out of the coronavirus pandemic in China?
Change is the biggest trend we are seeing in China and everything is being shaped and impacted by digital technologies. With over 900 million internet users, online activity never stops and this has resulted in tremendous changes in China’s digital market. Businesses that were previously digitally ready and prepared with inventories and logistic movements were able to gain benefits due to Covid-19.
During Covid-19’s peak time, the obvious changes on the digital included market behavioural changes, the rise of livestreaming activities, virtual events, and KOL influencer marketing. All of these emerging changes are now carried through to a new normal in the post Covid-19 environment.
How have brands maximised opportunities the pandemic has created?
Situations like Covid-19 create new opportunities for businesses who can respond and react fast. Many Chinese brands embraced the ever-changing environment by adopting digital strategies into their business operation, the fast rolling response made these brands succeed.
There’s one brand called Hey Tea, 喜茶 in Chinese, who are able to incorporate digital strategies into its entire business. They embraced the opportunity to engage their audiences during Covid-19. The brand took advantage of the situation to re-profile its customers and re-invent their digital strategy.
Hey Tea is a hugely popular tea brand with hundreds of stores across China, famous for its innovative flavours. Customers usually have to queue and wait between 40mins to an hour to receive a cup, so when Covid-19 forced Hey Tea to close its doors and cease physical sales in the early stages, the brand faced a new set of challenges.
Hey Tea operates an online mini-store on WeChat, China’s mainstream social media channel with a monthly active user base of 1 billion. The mini-store had a registered member base of 21.5 million last year. With a customer-centric marketing strategy, the brand’s key focus is always on social media. During Covid-19, the brand used a social CRM to obtain their members’ gender, age, occupation, and place of living. A well-designed customer digital experience on WeChat allowed Hey Tea to understand what their audience likes, how they fill their leisure time, which brands they prefer, and what kind content would attract them most. Acquiring this information meant Hey Tea knows its customers intimately. They could launch effective marketing plans to engage their audience, which brands/companies to co-brand with, which KOL’s or celebrities are most trusted by their customers. According to a recent report, 80% of Hey Tea’s total revenue was made online and it was able to reopen its stores in Mid-March. China has a strict policy on business reopening after Covid-19, and Hey Tea’s success is certainly impressive.
Overall, the ability to re-open and stay open during Covid-19 was because of its early digital set ups, mature digital infrastructure, and healthy inventory that allows customers to order drinks online or complete self-checkout in store. One particular experience I could recall with Hey Tea during Covid-19, was my operation director got managed to order 50 cups of Hey Tea for the office in an afternoon via its mini-store, and the order was delivered to our door in just an hour, very impressive.
What advice would you give to oversea’s export brands targeting China’s market in the current climate?
Embrace digital. Over the past decade, China’s digital consumption has exploded, and we can only expect this to continue. Covid-19 does nothing but accelerate the changes in the digital marketplace. Most export brands’ should re-think China as a long-term plan and investment. If managed well, there are high returns. Brands need to consider one of 2 things:
1. Work with a partner who has boots on the ground in China and was born in the digital age and can help them embrace the changes, fully utilise the technologies to build its brand and navigate the challenges together.
2. Invest in a local team with strong sales and digital marketing skills.
Most importantly, to best accommodate for continuing disruption, brand loyalty is vital, understanding its customer is the key.
My recommendations to a an export brand are:
1. Design a customer-centric digital strategy to engage both online and offline customers.
2. Set up your brand store and diversify the online trade channels. It’s the time to set up a brand store where all marketing spend should go into, and gradually build its own customer database to centralise its existing customer profiles, new customers’ data and purchase details. The store would best to be a Mini Program, or a website. Having big ecommerce platforms like Tmall or JD stores setup are helpful for diversifying the trade channels and would be useful to support brands to reach a wide sales network online.
3. Have an always-on social monitoring strategy to ensure the marketing and brand managers know the customers, which would also be super helpful for defining and redefining its social CRM strategy.
After all, the marketing investment should all be led by your customer engagements. A business model like Hey Tea’s where customer engages with the brands’ activities on social media to guide marketing activities online and offline would help to capitalise the investment, and would be a good role model for international businesses in China.