Thoughts from a UMS expert: Looking ahead to 2021

Last week the Australia China Business Council (SA) rounded up four industry experts to close 2020 and look forward to the year ahead. This round table event took place online and included Richard Zhu, leader of UMS’ Establish Domain, who was invited to speak on the panel to provide advice for business looking to target China in 2021. There is no doubt that 2020 has been a year of extreme uncertainty, and this theme is set to continue over the next 12 months as businesses grapple with the impacts of Covid-19 and tensions surrounding trade agreements. The main discussion of this event surrounded what businesses can do to prepare themselves for future disruption and how to strategically set a China specific business plan. The three main points discussed are as follows:


Dual Circulation and emerging Chinese trends 

Dual Circulation is a Chinese political concept that refers to how China is looking to strengthen and grow its domestic supply chain (and its outgoing global market strategy) to ensure the healthy circulation of products both internally and externally. Despite the concern this concept has raised for some brands, this is not a new concept and does not pose a threat for businesses looking to target China. It is simply a reflection of what other nations are doing to bolster and future-proof their markets.

In terms of new trends on the scene, the growing middle class in China has more than doubled in size to 200million over the past 10 years. There is one major behaviour which this group loves to take part in – and that’s e-commerce. China’s online sales figure currently sits at 10.6 trillion RMB – double what it was in 2015, and upcoming e-commerce sales festivals such as 11/11 will see updated figures released in the middle of November. Richard recommends that brands look at how they can take advantage of this growing class and the possible strategies used to target them. In addition, the equity of Australian and NZ brands remains high in China and consumers continue to see value in products from these countries, despite any trade discussions occurring between nations.


What it takes for businesses to build a brand in China 

Many NZ and Australian brands place an emphasis on trade rather than long term brand building and will cease exports  to a country if they see no initial profit. However, to be successful in China, brands must look further than short term export profit and focus on a long-term strategy that includes both brand and customer loyalty building.

Another key strategy that can help determine a brand’s success in China, is how they differentiate themselves and establish their unique selling point (USP). For example, many Australian and New Zealand brands have a similar USP of being from a clean and green country, however, brands need to determine what brand story and offering distinguishes their product from others to be successful in China’s market.

When businesses enter the China market, the distraction of Chinese social media and its potential opportunities is sometimes too exciting to ignore. However, many brands that dive into these online environments without establishing strong digital infrastructures quickly find themselves upstream without a paddle – or profit. These instances point to the importance of building fundamental strategies that consider content, strategies, and political issues in the China environment.


Planning for 2021 

In the global market’s current climate, it is not enough for brands to rely on guesswork when establishing their future strategies. Instead, brands should look at the worst- and best-case scenarios and how they can operate at each end of the spectrum. This does not mean that a brand must have the capabilities to operate at each end, but at least understand where resources are best allocated when change occurs. This also includes identifying where current opportunities are and enlisting the help of industry experts to take advantage of them before they pass.

For information on how UMS can help future proof your business in China for 2021, contact Richard Zhu at