An article by economist Wu Xiaobo sums up in just a few sentences the changing psychology of Chinese consumers and brand owners concerning the foreign countries. The international touch made it possible to move upscale when you could afford it. Now, the China touch is gaining ground.
Abroad = high-end
Forty years ago, when a Chinese consumer was asked whether he wanted to buy Chinese or foreign products, he replied: “Chinese products.” His answer was not motivated by the quality of local products, but by their affordability. When the wallet had the right thickness, consumers preferred foreign products.
The foreign item was synonymous with high quality. Many Chinese brands added in the brand name, the product design, and an international shade to make it foreign. There is a famous furniture dealer Da Vinci and a ready-to-wear brand La Chapelle, and many others who registered their brand abroad to claim to be a foreign brand.
Towards Chinese culture
Today, we are witnessing a turnaround; some brands are getting rid of the foreign connotation to highlight Chinese culture. Li Ning has taken this path, even for its international development. In China, consumers approve of this approach. There is an awakening of the local culture. There are more and more young people wearing Chinese clothes on the streets, and Li Ziqi has become a calling card for exporting Chinese culture abroad; the Forbidden City’s intellectual property has been an enormous success, bringing in $1.5 billion in revenue in 2017 from the purchase of peripheral products; international groups have begun to pay attention to the cultural needs of Chinese consumers, developing co-branded products with elements of “national trend.” McDonald’s changed its Chinese name. It evolved from Maidanglao 麦当劳 with a pronunciation that was somewhat reminiscent of the American name to a resplendent name, Golden Ark 金拱门.
The famous Li Ziqi 李子柒
Confidence in Chinese culture
Wu Xiaobo explains in conclusion: People choose Chinese brands even with a higher standard of living. Perhaps the main reason is not the low price, Chinese brands understand local consumers better; they have more confidence in their own culture.
Indeed, as Wu says, “Chinese brands understand local consumers better.” I’m not sure that “greater confidence” in Chinese culture is a greater incentive to buy a local brand. The chemistry is more subtle: a mix of nationalist politics, international tensions, a marketing strategy that flatters the national ego in the face of the country’s renaissance, and many other factors explain this return (to be confirmed) to national brands. The economist’s remarks are pertinent, but I find the conclusions a bit hasty. They seem to come straight from official bodies with little objectivity.
Foreign brands that want to conquer the Chinese market must adapt and show their desire to understand Chinese consumers. Some of them have understood it; others realized it far too late and went home quickly.
Wu Xiaobo’s Weibo Account
1rst of August