We speak with a lot of brands planning China market entries. And recently we have also been working with a lot of brands re-calibrating their approach to China.
China is a big prize. But it’s getting more competitive & costly by the day. Our research suggests that most categories have between 70-120 brands - the top 5-10 accounting for a > 35-65% share (report: https://bit.ly/3e1GSMd). Market share is becoming more concentrated, costs are rising & tactics are in flux. Middle of the pack brands are at risk of falling out of the race.
Global brands make common errors in strategizing China;
Under-estimating the competition
- Overestimating their own brand power
- Under-budgeting OR spending too much, too soon
- Focusing too much on sales AND too little on branding
- Not adapting to local tastes
There are also more subtle issues that stall the growth of promising brands:
1. Trust: how do you show you can be counted on?
2. Dedicated: do you serve a specific group/segment/need?
3. Energy: are your lights on bright... are you interesting?
4. Formula: is your path reliable/scalable?
Too many brands are still trying to do everything for everyone - trying to capture the big prize. Middle-of-the-pack brands (outside top 10) need to reflect on the race they are running.
