How can Chinese Brands Rebound from COVID-19?

How can Chinese Brands Rebound from COVID-19?

By Eleven Wong

The current pandemic has caused all sorts of dilemmas for brands: conventional campaigns, including pop-up stores, offline membership events, new brand experiences, and offline activities, cannot be conducted like before; meanwhile, online events and content can only be achieved with skills and an existing customer base. As we are entering a new normal, new business and service models will be born out of necessity, according to Ogilvy. Brands are now encountering unprecedented challenges due to the ever-changing landscape and demand uncertainty, leaving them wondering: how can adversity transform into opportunity? How can appropriate brand strategies be formulated to more aptly react to market changes?

Speed Up Digital Transformation to Build Consumer Connections

With lockdowns and social distancing measures becoming a common theme in our lives, we rely more on the internet than at any time in history. As we are closely attached to the digital world, traditional brands must respond and keep up with changes. Otherwise, they will find it extremely challenging to build connections with their customers. A must-read book for all marketers, Predictably Irrational, stated that we shouldn’t “underestimate the power of presentation. This is essential for building the reputation of a brand or product. That’s what marketing is all about—providing information that will heighten someone’s anticipated and real pleasure.” The current pandemic provides opportunities for brands to form unique brand values and new avenues to increase engagement. Next, DSIGN will share with you stories of successful digital transformations. 

Leverage Short Videos to Create Brand New Touchpoint

The traditional marketing funnel preaches that the number of potential leads decreases as customers move from gaining awareness of the brand to making their purchase. However, in the digital age, every stage is a touchpoint that impacts customers’ decision-making. According to data.iimedia, the number of short-video users in China have been increasing year by year since 2013. From a small scale of users in 2013-2015, the number of users exceeded 1 million in 2016, reaching 153 million users in total. The number continued to grow exponentially with 627 million and 722 million users recorded in 2019 and 2020 respectively. Driven by the pandemic, the average daily active users of TikTok and Kuaishou have also increased by 38.9% and 35.2% respectively. In 2020, the arrival of 5G lowers the entry requirement for content creators and further optimizes viewing experiences. User engagement in short-video platforms will be enhanced, helping to achieve more effective communication. COVID-19 is ravaging the economy, yet a noticeable increase in short-video popularity can be observed. Whether it is about transforming distribution channels transformation or increasing brand influence, short-video marketing strategies are important for brands to consider. Realizing the popularity of short videos and online retail, many brick-and-mortar stores have started to utilize TikTok, hoping to survive the new market paradigm caused by COVID-19. In response to the rise in popularity, TikTok launched a campaign called “ 線上不打烊”, providing support to local brick-and-mortar businesses. Through group pre-sale and live streaming goods, businesses were given the opportunities to open up new channels and markets, helping to stimulate economic recovery with the new ecosystem. The point of focus varies across short-video platforms. TikTok, for example, emphasizes content. Great content refers to how valuable it is to the users. It boosts exposure and is favored by algorithms and users. Apart from TikTok, Kuaishou is also a new hit. It focuses on sharing and places great importance on equality and inclusiveness, allowing people from all backgrounds to access the platform easily. Yet, at the same time, it poses challenges to position a brand clearly on the platform. Brands need to discover the appropriate short-video platform and present their image with valuable content. In the long run, it opens up new opportunities for brands by reaching a younger audience group. 

Digital Businesses Drive Effective Brand Communication and Sales

Affected by the pandemic, live streaming is booming. The live streaming industry has encountered new growth opportunities since 2020, making selling through live streams extremely popular. According to the China Internet Network Information Center, the number of live streaming users reached 560 million in China as of March this year, a rise of 163 million users since the end of 2018. The figure accounts for 62% of the country’s total number of internet users. In 2019, Li Jiaqi (Chinese top beauty influencer, aka China’s lipstick king), earned nearly 200 million RMB and Li Ziqi (a Chinese food and handicraft internet influencer) earned 160 million RMB. Their revenue exceeds that of 60% of listed companies. That is to say, Li Jiaqi and Liziqi are already powerful enough on their own to beat listed companies. On the other hand, according to Huxiu’s (虎嗅)’s market research, 1.5% of viewers expressed that they will purchase what a Taobao live streamer promotes each stream (10% during sales promotion); 40% of users said that their decision-making will be affected, which is more than the impact brought by traditional media promotions. The profound impact brought by live streaming has sparked hot discussions, causing many offline stores to go digital through live streaming for greater integration of online and offline services. By running an e-commerce platform, WeChat membership programs, selling via live streams, and offering contactless services, the diversity of these marketing offerings, in turn, optimizes user experiences. Live streaming also breaks distance barriers while helping to create brand essence and drive sales. It provides a real-time interaction for brands to demonstrate various products and shoppers to ask questions about the product as if they were physically in the store. During Tmall’s 618 Shopping Festival, over 10,000 physical retail stores live-streamed to promote their products, aiming to regain growth and reconnect customers amid the pandemic. The platform is also used by many luxury brands to sustain their market exposure. Dior, for example, held a live 2020 SW Fashion Show on Weibo, receiving 12.34 million views, 310 million topic views, and 1.654 million discussions.

Using Data to Formulate Accurate Marketing Strategies?

According to the Digital Economy Report 2019 by the United Nations, digital platforms and data accelerate the growth of the digital economy, indicating brands that they need to take these factors into account when deciding what and where they should sell and who they should sell to. Big Data, Cloud Computing, AI, and 5G Technology will gradually change the landscape of digital marketing when they become more mature. Big Data marketing and AI marketing are now a new digital marketing model and trend. In response to COVID-19, many brands have decided to start cutting marketing budgets, making it imperative for them to invest in the right content in order to attract the right customers. Having a flexible media mix and being responsive to different media touchpoints enable brands to formulate effective marketing strategies, which ultimately drive sales. Speaking of digital marketing, you may want to check out another article written by DSIGN: Why Should You Use Keywords Planning for Digital Marketing? 

Create Customers Value by Embracing Corporate Social Responsibility

Corporate Social Responsibility is an intangible brand asset, helping businesses to be socially accountable by taking society, environment, and customers into account when making decisions. Philip Kolter has once discussed the new consumer preferences in his book, Marketing 3.0: “In the globalization paradox, the generic anxiety and desire of the consumers are to make their society and world at large- a better, perhaps even an ideal place to live. They search for companies that address their deepest needs for social, economic, and environmental justice in their mission, vision, and values. They look for not only functional and emotional fulfillment but also human spirit in the products and services they choose.” Brands that intend to be iconic should share the same dream with consumers and make a difference. Maslow’s hierarchy of needs implies that brands should do more than just making donations in order to satisfy consumers’ emotional and spiritual needs. When formulating CSR activities, brands need to focus on what kind of value and experience they will bring to the consumers. By connecting their activities to current social issues and welcoming consumer’s participation, purposeful brand engagement can be formed.  Amid the pandemic, consumers can be more susceptible to their emotions. Marketers must transform themselves into “Enabling Marketers” who can make things happen. To achieve that, the starting point is to open up opportunities for consumers to create value for themselves using the brand.  For example, KEEP (Chinese fitness app) offers exclusive sports and training programs to its business partners. By providing scientific and comprehensive training guides for their employees, customers, and partners, KEEP is trying to protect everyone’s health and safety during these trying times. Catering to their business partners’ needs, the 12-day professional home workout program is specially designed and suitable for people at all levels with no requirements needed.  In the meantime, the brand offers tutorials, sports sharing sessions, e-vouchers, and welfare for the employees.  The actions encourage people to stay healthy and take proactive precautions in response to the pandemic. What KEEP has done is a typical approach to CSR, in which it merges corporate social responsibility with the company’s strategy. Meanwhile, it is also a B2B2C marketing strategy, transforming from B2B to B2C.  DSIGN believes that effective marketing strategies are built on a solid foundation of deep engagement. Brands should target a specific group and increase brand loyalty by creating values and fostering close relationships with their audience.

Conclusion

In a crisis, there is always a seed of opportunity. Brands can only formulate responsive marketing strategies and turn adversity into opportunities once they have fully understood consumer preferences, behaviors, and market changes.  Most importantly, brands need to build their moat and develop distinctive brand assets. Live streaming and short videos are tools to help increase brand exposure and bolster brand IP. On top of that, brands can also consider creating a sub-brand built on the foundation of the original label to introduce new products into new markets.  No matter what has happened, brand power is the shield against hardships. 

References：

1.  https://www.useit.com.cn/forum.php?mod=viewthread&tid=26592

2. https://www.adquan.com/post-7-293391.html

3. https://www.digitaling.com/articles/267259.html Edited by DSIGN Team For cooperation, please contact: info@dsignhk.com