Create bespoke brands that fit Chinese tastes.
Letter to FT by Fergus Hay, CEO Leagas Delaney UK
In response to Don Weinland’s report “Tough battle bringing western brands to Beijing” (January 27): it came as no surprise that brands such as PizzaExpress have struggled in China. As someone who previously lived in Asia and works in the creative industry, I’ve witnessed China’s fast-moving and ever-changing landscape first hand, and the varying tastes across regions, which can be hard to navigate.
For a brand considering the move, it’s important to note China’s rapidly growing middle-class market, with an increasing disposable income and a desire for British heritage goods. This is where the opportunity lies. But the challenge is engaging them in a western offering. The digital advertising landscape in China is immensely different from Europe’s.
Chinese platforms such as Tencent and Alibaba have created e-commerce digital ecosystems where consumers can shop, bank and communicate on one easy to access and use ecosystem. This completely changes how brands can engage with the consumer, as the route from product discovery to purchase is extremely short and quick.
It’s not about adapting a brand for the market to fit cultural differences, but about creating the right brand that will fit Chinese taste. Creating bespoke products and brands for the Chinese consumer is key, and one of the biggest hurdles brands will face. In addition, understanding the distribution chain and execution is 90 per cent of the battle for brands. In China there are a different set of rules, codes and methodologies, therefore brands must have the right infrastructure in order to execute and distribute to China.
Data from the International Association of Tour Managers show that overseas travel spending by Chinese tourists reached $261.1bn in 2016 — around half the gross domestic product of Sweden. The opportunity here is not for the western brands to go to China, but for western brands to capture the travelling Chinese tourist in the west, as their spending increases.
Fergus Hay, Chief Executive