Co-Written with Karin Marton
Everyone talks about adapting your product to the local culture, especially in China. However, how about the exact opposite – having your product changing the whole culture and consumer behavior?
Let us check this idea through a simple case study – coffee drinking in China, including Starbucks’ phenomenal success. You may wish to implement what you learn here in your own business in China.
For millennia, China has been a tea-drinking society and the leading global producer and consumer of tea. With the opening to worldwide market in 1980s, a variety of foreign products have poured into Chinese market, coffee among them. At the same time, we could see an emerging middle class with money to burn. What would you do with such a great opportunity?
Chinese consumers, mostly the young, are more open-minded to Western influences that have made their way into China and are eager to show it through coffee consumption. They began to recognize the coffee brand, style and lifestyle, and learned how to enjoy the fun of coffee. A positive relationship has been shown between level of education, family income and the frequency of drinking coffee. Coffee is more likely to be considered as a symbol of a successful lifestyle rather than its own original use. The development of the Chinese coffee market is closely linked to the consumers’ growing interest for western culture, while tea remains in the traditional culture sphere.
Starbucks Coffee (In Chinese: 星巴克) for example, took advantage of the situation and launched into the Chinese market for the first time in January 1999, thus opening its first store in China World Trade Building, in Beijing. At first, Starbucks had to promote the creation of a coffee culture in a traditional tea consumer society, and has done it by attention to details. The atmosphere of Starbucks stores is similar of the teahouses in china, which reminds of a community lounge.
Starbucks used a few strategies that every big brand who wishes to do business in China should pay attention to. In order to promote the coffee culture, the coffee making process was open for everyone to see, especially the expertise of the baristas. Next, Starbucks was looking for something innovative and therefore, planned to support the Chinese farmers in Yunnan province (Southwest China) to help them produce local and profitable coffee beans. By purchasing coffee beans produced in Yunnan, the company began selling the popular Asian-themed drinks in its stores. Another thing Starbucks have noticed is that Chinese consumers tend to drink their coffee while going to dine, so they added sandwiches, cakes, salads, and even vegan-friendly food to their menu.
To adapt coffee houses to the emerging middle-class that was seeking for purchasing brands, Starbucks established its strong brand by selling TA cups, mugs, coffee beans and more. Furthermore, Starbucks uses local suppliers and coffee machines to increase the brand value in the consumers’ eyes.
Finally, Chinese consumers do not go to coffee houses to solely drink coffee. Starbucks is a gathering space for business meetings, studying and spend time with friends because of the unique atmosphere they have created. Green tea was also added to the menu, in order to encourage these activities. For those who do not really have the time to take a break in the middle of the day – Starbucks launched an application for take-away.
So, what should you do in order to become as successful as Starbucks in the Chinese market?
First and most importantly, do your homework – gather quality intelligence. Hire a professional China market researcher to ease the process. The unique knowledge, experience, and local connections which expose you to real-time trends and valuable information, is the single most important process of your China market penetration.
Localization comes in second, based off the market research insights. Although Chinese consumers appreciate western brands, they still have their unique local style and way of thinking. You should customize your product and merge it with their culture – like Starbucks started serving tea in a coffee house, but do not settle for changing the concept. Else, your product’s theme is lost in the local culture and stops being unique.
Learn about consumer behavior in China and understand their decision-making process. Chinese consumers do not buy anything they want right on the spot. Instead, just like you, they are making a market research, trying the product by loaning it from their friends first and once they are satisfied, they will save money for the occasion and only then buy your product.
Embrace a sophisticated, local Chinese name. Starbucks did, Nespresso did and even western people who arrive to China are embracing their personal Chinese name. It will make your product more accessible and create a deeper psychological link with Chinese consumers.
Finally, create a Chinese domain website, written in Mandarin Chinese. Online marketing in China is a huge business and very popular, much more so than in western countries. Without an online presence – you simply do not exist.
Want to learn how your brand can reshape the consumer market in China? Schedule a free consulting meeting with Xinergy’s experts today!