Building Brands in China

Building Brands in China

SHANGHAI, CHINA (July 12, 2011) -- The global financial crisis and the rise of digital media have forced advertisers to reevaluate the way they build brands and interact with consumers, said John Gerzema, Young & Rubicam’s global chief insights officer, in the seventh episode of the weekly advertising affairs series, "Thoughtful China.”

In the U.S., shoppers are moving·from overconsumption and towards products made and sold locally. Virtues like thrift, self-reliance, community, empathy and hard work are back in fashion globally “and become important underpinnings for why we buy brands today,” said Mr. Gerzema said.

Use of social media by marketers and consumers is also a rising trend, he added, but depends on more than simply hosting a Facebook page or Twitter account. “It’s really about social as a business model...making commitments that you’re going to be social with your customer” at every level of business from R&D to post-sales communication.

In China, different trends are at work, including greater consumer optimism and confidence and a chaotic media market, which make it difficult to anticipate and adapt to new customer interests and demands. Chinese are vocal commentators on brands on platforms like Sina Weibo, said Jean Lin, Isobar’s CEO, Asia Pacific and Global Chief Strategy Officer. “It's a good channel for people to voice what they think about brands and how they feel.” 

“Chinese are very status-driven,” said Greg Paull, a partner at R3, an independent consultancy based in Beijing. “Look at luxury brands here, they didn’t really have a downturn here the way it was in the West. You’re still seeing a lot of growth in the luxury sector here, and you’ll see for some time to come.”

Digital media needs to·be handled carefully in the luxury sector, said Charles de Brabant, Asia director at Saint Pierre, Brabant, Li & Associates and a visiting professor of luxury branding at CEIBS. Some brands like Chanel need to focus on maintaining their aspirational status, while other brands like Burberry are employing an accessible image with two-way communication. Marketers must also contend with China’s enormous size and rapid pace of economic growth, said P.T. Black, Thoughtful China’s senior creative director in Shanghai. “Brands have had less time to establish themselves [in China], and what’s more, this process is happening at different speeds in different city tiers, so it’s a very difficult trick, keeping current consumers while introducing yourself to new consumers [in lower tiers].”