(Source: https://pltfrm.com.cn)
Introduction
China is an immense market with vast opportunities, but it comes with its unique challenges for foreign brands. One of the first decisions brands must make is whether to pursue a local branding strategy or continue with their global branding approach. In this article, we’ll break down the costs associated with both strategies and provide actionable insights to help you choose the best approach for entering China’s competitive e-commerce space.
1. Local Branding: More Than Just Translation
1.1 Cultural Adaptation To successfully localize a brand, companies must delve deeply into Chinese culture and understand how their products can resonate with local values. This often involves modifying brand messages, logos, or even product names to ensure cultural appropriateness. While this is an investment in the long-term brand equity, it can be expensive and time-consuming.
1.2 Local Partnerships and Collaborations Local partnerships are essential to create a strong brand presence. Whether collaborating with local influencers or partnering with well-established Chinese e-commerce platforms like Taobao or WeChat, the cost of building these partnerships can be substantial. However, they are crucial for creating a deep connection with local consumers.
2. International Branding: Preserving a Global Identity
2.1 Brand Recognition and Trust For international brands, the initial cost of building brand awareness might be lower, as their global recognition can provide a head start in China’s market. Consumers are often curious about foreign brands, and leveraging this curiosity can reduce the cost of advertising campaigns. However, ensuring that global branding aligns with local expectations and preferences adds complexity.
2.2 Translating Global Campaigns for Chinese Audiences Even with strong global recognition, international brands need to ensure that their campaigns are tailored to Chinese consumers. From translating marketing materials to adjusting imagery and messaging to local tastes, this effort still comes at a significant cost, requiring the involvement of local experts and creative teams.
3. Evaluating Operational Costs for Branding in China
3.1 Logistics and Distribution Beyond just the cost of marketing, operational expenses also play a significant role in brand-building costs. Working with local distribution networks and ensuring product availability across Chinese regions can require large investments in logistics. This infrastructure can add to the overall cost, especially for brands that need to adapt their supply chain to Chinese standards.
3.2 E-Commerce Platform Fees To succeed in China’s e-commerce market, brands often need to invest in platform-specific tools, such as Tmall or JD.com storefronts. These platforms charge fees for listing products, and the cost structure can vary depending on the level of visibility a brand desires. The financial outlay for building a strong online presence on these platforms can be substantial.
4. Case Study: A European Skincare Brand’s Journey in China
A European skincare brand opted for a localized strategy in China, investing heavily in product packaging, Chinese influencer collaborations, and tailored marketing messages. While it saw success in driving engagement and sales, the costs of this approach were high. The brand incurred substantial fees for local partnerships and e-commerce platform setups but ultimately benefited from strong brand loyalty in the Chinese market.
Conclusion
Both local and international branding approaches come with their costs. Local branding is expensive due to the need for cultural adaptation and local partnerships, but it can create deep connections with consumers. On the other hand, international branding offers the advantage of leveraging existing global recognition but still requires localization efforts to ensure success. Ultimately, brands must assess their resources, goals, and timelines before making a decision.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
