How 5 Global Brands are Using China to Survive 2020

international brands in china
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    Almost all retail businesses are seeing a sales drop in their home markets. And understandably, everyone is wondering if it’s best to cut every cost possible, cut the projects, and just batten down the hatches and try to wait out this storm. Meanwhile, brands in China are starting to see sales trends move upwards.

    Many companies experiencing struggling home markets are switching to digital models or switching production towards in-demand items. Organisations that are cash-strapped are teaching and educating or entertaining their online followers to stay familiar and provide value in these hard times.

    But these solutions aren’t practical for a lot of businesses. One way to mitigate the loss of home markets and traditional foreign markets is to compensate with new revenue streams. The Chinese market has come out of the epidemic and is much stronger compared with many world markets.

    We’ve put together a list of examples that showcase how brands are adjusting their marketing strategy to survive the current crisis.

    Instead of pressing pause on everything, learn how different organizations are using creative marketing techniques to ‘just keep swimming’.

    Let’s get started.

    1. Louis Vuitton – Using Asian luxury demand

    Globally the luxury industry is expected to shrink by between 22% and 25% in 2020, according to Bain estimates.

    Louis Vuitton brand in China

    French Luxury Chain LVMH (owner of major brands including Louis Vuitton) has turned to China where the demand for luxury goods is stronger than ever. While the Q1 sales dropped by 15%, the brand experienced more than 50% sales growth so far in China this April compared with last year.

    The brand adapted to digital platforms and even launched its first show ‘re-see’ on WeChat. This allowed them to continue driving sales despite the lockdown.

    Takeaway: Use innovative digital strategies to help ride out the storm

    2. IKEA – A digital brand in China

    Partnering with Alibaba Group’s Tmall, IKEA has opened its online store in China with almost 4000 products available in March. That was well before China was in the clear, yet they were thinking ahead and looking long term.

    furniture brand in China

    After a limited market penetration with just a few stores in China’s Tier 1 and 2 cities, this has now opened up a massive potential for growth.

    And it’s not just IKEA who views digital channels as incredibly important to focus on in the world of modern retail. Goods of all shapes and sizes are making use of live streaming to promote and sell more of their products, and they’re increasingly partnering with retailers like Tmall, Taobao, and JD

    Takeaway: Use digital channels to become accessible and grow sales

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    3. Beyond Meat – Tapping into China

    Beyond Meat, the largest alternative plant-based ‘meat’ maker in the world, launched in China in late April. They entered the Chinese market through a partnership with Starbucks to offer pasta, lasagna, wraps and more for those who prefer to eat plant-based diets. This move was coupled with a Chinese website to connect with Chinese consumers.

    Plant based meat brand in China

    The plant-based meat industry in China is about 15% bigger than the market in the US, accounting for $910 million in sales in 2018. This partnership has helped the company gain a strong position during a global financial crisis.

    Takeaway: Enter a highly coveted and largely untapped market to rise in difficult times

    4. Bubs Australia – Using baby food demand overseas

    Bubs Australia, the producer of goat’s milk formula and organic baby foods, has partnered with a leading baby nutrition company in China to launch into the Chinese market. The formula will be sold online through e-commerce platforms.

    Baby food and formula is in hot demand in China, and has been for many years. With an increased emphasis on health and nutrition, parents want clean, high-quality foods for their children more than ever.

    While many companies would have paused new campaigns into foreign markets with coronavirus, Bubs Australia will likely come out in a strong position by taking advantage of the current situation.

    Takeaway: Meet the rising demands in the overseas market to drive growth

    5. Dior – Using social media to keep the momentum

    China makes up a big part of the customer base of luxury brands like Dior. Online sales alone account for 14% of luxury goods sales in China. Brands quickly adapted by moving their new collection launches online.

    For example – Dior streamed its launch on Weibo, and Louis Vuitton launched a Valentine’s collection through WeChat Mini Programs. This was so successful that the company doubled its sales compared to last year’s Valentine’s collection.

    Takeaway: Connect with your audience using creative digital strategies

    Other trends brands in China should be aware of:

    Health has become front and center to a lot of people. Health foods, supplements, and fitness device companies are adjusting to increased demand  in China. According to Neilsen data, 80% of the population plan to eat healthier now, 75% plan to spend more time on health and fitness, and 77% have bought or plan to buy fitness monitoring devices.

    If you’re in this space then good news, you have a hungry market. This trend will likely continue across the globe as more regions get on top of this virus.

    Wrapping it all up

    While it might not feel right to continue with business as usual, it’s the need of the hour. Use this time to learn, experiment, and get creative with your marketing strategy. There’s a lot you can do even with smaller budgets.

    While channels such as outdoor advertising no longer make sense, the increase in time spent at home presents a unique opportunity to reach consumers who are using streaming services and mobile apps a lot more than before.

    In the end, once the crisis is over – it’s those who’ve managed to keep their business afloat using different opportunities that are going to succeed.

    In the meantime, stay safe.

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