Top 1000 Brands
China Faces New Frontiers On The Local Market

For many Chinese companies, planning for the future means reassessing business models and tracking the shifting needs of their consumer base, both locally and abroad. Debby Cheung, President of Ogilvy & Mather Shanghai, brought together a group of leaders from homegrown Chinese companies to understand how their strategies are beginning to transform in the face of China’s “new normal.”

Zhang Meng, Marketing Director of high-end kitchen appliance company Fotile, noted that although 2014 saw the kitchenware market start to shrink at a rate of 5-10%, high-end kitchen electronic appliances purchase actually grew by 34%. So despite a shrink in total market, there has been a significant upgrade in consumption level. He believes that this has been helped in part by younger consumers who, when it comes to their kitchens, are thinking less about the cooking space in terms of pure functionality and more in terms of their desire for quality and a certain lifestyle.


For Fotile, this means a kitchen is no longer simply a place to cook; it represents a set of higher ideals, not to mention a place to socialise, both physically and digitally (food is officially the most shared topic on social media). “If I’m cooking fried rice, it’s no longer just fried rice – it’s idealized,” Zhang laughs. “When pictures are shared on Weibo or Wechat, they need to be perfect.”

Li Xuezheng is Senior Vice President of BOE, which focuses on the R&D, manufacture and sale of thin-film LCD screens, and he admits to seeing a similar shift in consumers as they become younger. BOE currently holds 20% of the global market and is looking back towards the local market based on predictions that the middle-class population will hit 100 million in China. Taking into consideration the culture shift from “we” to “I”, and the incredibly widespread market diversity in China, the future of marketing means lots of niche markets.

Part of catering to this culture of “I” is to make sure you’re focusing as much on value-added transactions as you are your product itself. This can help your company become more involved with people’s lives; in order to provide a treasured service, you must first know who your customers are, and what they need. “In our industry, there are two kinds of services; tangibles and added value,” says Zhang Meng. “We’re selling products, we install the machine in your house. That’s the end. But our aim is to have a better effect and effective use. It’s not just about having a good product. It’s about having an excellent experience.”

Amy_cheung_ogilvydoWhile many companies are still treating services as “nice to haves,” Amy Cheng, Executive Head of Global Coverage & Vice Chairman of IBD, Boci China, says that they should be treating it as crucial if they want to get their business to the next level. A veteran of China’s investment banking world, she adds that her company often evaluates others by their value-added services, marketing strategy, and forward-thinking attitude.

“In the past, service was something you had to do,” she says. “Now, it’s something companies should want to do, so they can translate the one-time buying into a service that procures brand loyalty – whether it’s through digital technology or using marketing services to enhance their business model.”

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