1、An R3 Report China Brands Beyond BordersBrands With Room to GrowThere has been a general upward trend in valuation of Chinese brands in recent years,but a few notable highly-ranked brands in 2019 and 2020 dropped in rankings in 2021.There is,however,room to grow for both established brands and newco

2、mers.A more robust brand strategy,improved implementation and use of private traffic,and optimized marketing operations can help Chinese brands build long-term growth and resilience in the face of the challenges posed by tightening regulatory environments.The global success of Chinese brands comes w

3、ith increased quality of Chinese products,a constant drive to improve and innovate,and novel marketing strategies that hinge on social media and digital channels.Rapid R&D and go-to-market strategies for products that appeal to a global audience while adapting marketing strategies to a localized con

4、text has provided Chinese brands more visibility on the global stage.3MOVING CHINA BRANDS BEYOND BORDERSThe Changing Value of Chinese BrandsSources:Google and BrandZ Chinese Global Brand Builders(Kantar 2021)Sources:KantarYearEstablishedKantar BrandZ 2022 Most Valuable Chinese BrandBrand Value(US$Mi

5、l.)2020202120222022Tencent1998211204,378Alibaba1999122137,031Moutai1999333108,490Douyin(ByteDance)2012148443,483Meituan201094541,945ICBC198449636,017JD.com199887734,198Huawei198755833,663Haier19841211933,206Ping An Insurance1988761026,320YoY Brand Power Growth by Category-Developed MarketsOnline Fas

6、t Fashion29%OTA-2%Cars-14%SmartDevices13%ConsumerElectronics-5%Airlines-26%ContentApps21%HomeAppliances-3%Banks-20%MobileGaming8%AlcoholicDrinks-6%E-commerce-27%Total brands YoY growth:-3%BRANDSDRIVING TRANSFORMATION FOR MARKETERS&THEIR AGENCIES4Starting The Global Journey At HomeLeveraging e-Commer

7、ce and Social MediaSource:Accenture Social Commerce Shopper SurveySocial Commerce 2025 Market Size(Billion USD)2021-2025 CAGRGMV:Gross Merchandise ValueCAGR:Compound Annual Growth RateUS$99 GMV25%CAGRUK$13 GMV27%CAGRBrazil$5 GMV30%CAGRIndia$17 GMV59%CAGRChina$1,015 GMV26%CAGRChinese consumers want t

8、hree things from brands:value for money,quality,and aftersales service.Local brands are emerging as the preferred provider as they provide good quality products at an affordable price.Improvements in quality and branding have injected impetus into domestic products in growing sectors,including cloth

9、ing,automobiles and cosmetics,with their popularity triple that of foreign counterparts in 2021.Chinese firms decision-making process is comparatively nimble compared with foreign companies that often need to go through a multi-layered approval process before launching a new product.And foreign cost

10、 structures are often less competitive in China.Besides good quality and customized products,domestic brands have become a rage among young consumers due to their innovative use of traditional Chinese elements and culture that appeals to young Chinese consumers strong sense of national identity.Chin

11、as cross-border e-commerce export growth rate increased by 40%as many Chinese brands started taking their e-commerce products globally.Alongside their increased exportation,Chinas innovation ecosystem is booming with mobile commerce,social media,live streaming,and digital wallets to improve marketin

12、g efforts and facilitate increased ease of purchasing.Chinese brands are localizing their products and defining their brand image through social media.They are localizing products with branding strategies to align with the target audiences culture by employing social media tactics and influencers to

13、 increase brand exposure to their target demographics.Many local home-grown brands,such as Florasis and Lilith,are now selling overseas.The primary consumers of these brands seem to be young people,particularly women,who are price sensitive.Chinese brands are known for their relatively cheaper-price

14、d products in foreign markets.The main marketing strategies that these brands utilize are localization and globalization.Chinese brands are well-aware of the need to brand their products strongly and to adapt them to different countries and cultures.Therefore,upon expansion overseas,each brand diffe

15、rentiates its products and marketing to appeal to the cultural context of the country.They use country-specific models and locally-run social media channels.They also consider how their products would fare on the global stage at the point of product development to ensure that they have overseas succ

16、ess potential.5MOVING CHINA BRANDS BEYOND BORDERSExport by PlatformLocal Platforms with Global ReachPlatformDescriptionUnique Selling PropositionThe international arm of Taobao Tmall,owned by Alibaba.Many of the largest luxury fashion brands from around the world host their products on the platform.

17、Tmall offers cross-border shipping specialists to help handle logistics,allowing for 5-8 working day delivery and tracking.Cross-border arm of B2C e-commerce platform JD.com.Tencent,Google,and Walmart are among their partners.JD.com is more known for computer,communication and consumer electronics p

18、roducts.With a comprehensive logistics network of warehouses and shipping stations across China,JD Worldwide provides leading in-house integrated logistics services.VIP International is the cross-border e-commerce division of VIP Shop,a flash-sale e-commerce platform.The platform enables customers t

19、o pre-order products in bulk from excess inventory to sell at a significant discount.To combat counterfeits,VIP International has set up procurement overseas,and all products are sourced and bought directly from overseas.VIP International also operates an in-house logistics network.Suning Internatio

20、nal is the cross-border e-commerce arm of Suning.Suning is a smart retail platform that combines its e-commerce operations with a vast network of brick-and-mortar storefronts across China.Suning International offers two cooperation models:-The entry model,where businesses sell through Sunings own in

21、-house integrated logistics network.-The procurement model,where businesses sell to Sunings overseas partners directly.Youpin is an e-commerce platform operated by Xiaomi,a Chinese consumer electronics giant known for their smartphones and consumer IoT devices.As a Xiaomi operated platform,most of i

22、ts domestic product offerings are from the Xiaomi ecosystem.Youpin Global works mainly with foreign governments to bring overseas products to Chinese customers on its platform.The cross-border e-commerce industry has seen an explosion in platforms offering a full suite of digital infrastructure and

23、logistics support.The most successful platforms allow foreign brands to sell in China without needing a Chinese business license.These platforms also provide logistics support with many operating warehouses and shipping stations across China so that customers have access to reliable and fast shippin

24、g.In addition,successful platforms also have to battle the rampant counterfeit goods that proliferate Chinese markets and the perception of low-quality Chinese goods.As such,the procurement models of these platforms are of great interest to customers,and assurance of quality through direct purchase

25、from overseas providers is needed to satisfy customers.DRIVING TRANSFORMATION FOR MARKETERS&THEIR AGENCIES6Fortifying Chinese Brand StrategiesChinese brands can benefit from building four key areas that impact brand value and internal marketing capability.Clear and agile brand positioning Clarify br

26、and positioning and find out the competitive advantage of product differentiation.Understanding the value-add of their product in the eyes of consumers will enable brands to position their appeal and strategically shape their brand image.Having partners that can deliver relevant,timely and innovativ

27、e insights will help brands enhance decision-making.1342Brand management Marketers should insist on brand marketing innovation and strengthen brand management awareness so companies can develop their brands overseas.2In-house specialistcapability3Brand management1Clear and agile brand positioning4Br

28、andprotectionIn-house specialist capability Export companies can produce a wide range of visibility through successful innovation knowledge management,thereby gaining the ability to create new brand value.Many companies have so far only focused on absorbing and training management and marketing tale

29、nts,ignoring technical talents in product innovation,design,and R&D.To solve such problems,companies need to pay attention to the training of brand research and development professionals.Brand protection Brands need to prioritize intellectual property and insist on brand maintenance,including mainta

30、ining brand quality and technology,cracking down on counterfeiting,establishing a corporate brand awareness of crisis management and putting into place a crisis management mechanism.four key areas 7MOVING CHINA BRANDS BEYOND BORDERSExport-Ready Marketing Strategies Committed to exploring European an

31、d American fashion trends,combining the facial and skin characteristics of Asian people Spokespeople are highly popular with the youth The brand developed makeup shades to match local skin tones and upgraded its oil control technology to meet consumer needs Co-brands content with popular local brand

32、s and local celebrities Technology and data-driven business model that builds performance-based marketing campaigns“Oriental Makeup”is the brand positioning of Florasis Beautiful packaging reminiscent of Chinese sensibilities and legends Products are imbued with Chinese beliefs and cultural roots Wo

33、rks with micro-influencers on TikTok to promote products Co-brands products with prominent events,combined with a distinctly Eastern take Brand positioning of“color experts and beauty artists from China”High-end product positioning,the average price is 30-50%higher than the domestic price Operates a

34、n offline omnichannel sales network through large retailers and supermarkets Distributes through large e-commerce platforms like Amazon Product packaging and design tend towards Western aesthetic tastes Co-branded products with institutions inclined towards cultural,art,and fashion international IPs

35、 that have a high degree of brand/makeup fit,high recognition,and high topicality Building an international business incubation center Launching imported flagship stores Setting up a dedicated team to provide merchants with one-on-one Chinese and English entry services Private traffic pools such as

36、WeChat service accounts and mini-programs used to mine users needs and convert potential customers into loyal users Incubating 40 new import trend categories and accelerating the creation of new imported products through new world factory model innovation and marketing services Launch celebrity stor

37、es project,in which JD Worldwide invites celebrities and KOLs to open stores to bring more traffic to the platform Recruit customers who are passionate about recommending products to become its influencers and join livestreams and offline activities Visit universities to select over 1,000 Key Opinio

38、n Consumers to increase its appeal among young customers Technology and data-driven business model that builds performance-based marketing campaignsMarketing StrategyDRIVING TRANSFORMATION FOR MARKETERS&THEIR AGENCIES8Case studyJD.comFounded in 1988,JD.com is one of the two massive B2C online retail

39、ers in China and a prominent competitor to Alibabas T-mall.JD has invested in expanding its warehouse network,expanding the quick delivery services in the lower-tier cities,and strengthening its omnichannel offerings.JD is in a much better position with the Chinese Communist Party than other Chinese

40、 stocks and is less sensitive to regulatory downturns.Lately,JD is focusing on expanding into Europe and America.They recently opened two robotic shops by the new brand name“ochama”in the Netherlands.The model merges online ordering and in-person pick-up shops and utilizes robots to prepare the parc

41、els and home delivery service.These locations mark the first omnichannel retailer in the Netherlands that offers both food and non-food in one shopping app.They also announced a deal with Shopify that will allow American merchants to access the Chinese market and vice versa.Previously,it would take

42、12 months for international brands to begin selling in China,but JD has streamlined the process,and its sales channel allows Shopify brands to get started in 3-4 weeks.JD will provide a supply chain network with a global reach and end-to-end fulfillment service from the U.S.to China.JD will also pro

43、vide intelligent translation and smart price conversion services on the backend.Shopify will collaborate with JD to allow simplified access and compliance for Chinese brands and merchants looking to reach consumers in Western markets.MarketingThe celebrity stores project is where JD works with leadi

44、ng entertainment companies to invite celebrities and KOLs to open stores to bring more traffic to the platform and improve the diversity of their customer base.It will also continue to recruit customers who are passionate about recommending products to become its influencers and join livestreams and

45、 offline activities.JD also goes to universities to select over 1,000 Key Opinion Consumers,especially those with strong knowledge in vertical categories,in order to increase its appeal among young customers.9MOVING CHINA BRANDS BEYOND BORDERSFounded in 2017,Florasis is a Chinese makeup brand.Wester

46、n Europe,North America,Oceania and Russia are the first regions to which Florasis has expanded overseas.Florasis is famous for its intricately designed products imprinted with delicate floral designs.The target group of Florasis customers is 2030-year-old women,and the brand uses retro packaging and

47、 makeup concepts from traditional Chinese style to stand out from the competition.The packaging and designs of Florasis capture the eye of consumers and is a draw for the product.Florasis is also a master of storytelling,incorporating traditional Chinese legends and beliefs into their products,packa

48、ging,and marketing efforts.MarketingFlorasis actively uses TikTok to promote its cosmetics in foreign markets.The official TikTok account released content such as unboxing videos of Florasis cosmetics,product reviews and make-up tutorials.In addition to the Chinese TikTokers,Florasis also attracts W

49、estern TikTokers to make short videos.The brands Instagram is steeped in traditional Chinese culture.They post tutorials and photos of Chinese KOLs using the brand,such as make-up artist Emily Long.Florasis also hosts giveaways where subscribers can win cosmetics.The brand shares subscribers stories

50、 showing the unboxing or application of Florasis cosmetics.Florasis also has a Facebook page with links to Instagram,Weibo and the brands official website.The brand uses the Facebook page to tell customers where the inspiration comes from.Other than social media,Florasis also co-branded its products

51、 during New York Fashion Week.Florasis developed co-branded clothing collections with two brands that hold Chinese heritage in high regard,including Sanzemeng 三澤夢,a brand that sells the Chinese traditional clothing Hanfu that is popular among young Chinese,and the fashion brand LUYANG BY YANGLU.Case

52、 studyFlorasisDRIVING TRANSFORMATION FOR MARKETERS&THEIR AGENCIES10Case studymiHoYomiHoYo is one of the fastest-growing Chinese mobile game publishers.miHoYo is well-known for Japanese anime-style action games.miHoYos action RPG,Genshin Impact(原神),has been successful both at home and abroad.More tha

53、n 70%of the firms revenue came from overseas.Genshin Impact is lauded for its breathtaking visuals,a massive open world,an interesting story,seamless combat system,and soothing soundtrack.The game also has many playable characters;each has a unique voiceover and qualities.Genshin Impact is not yet c

54、ompleted and is a long-term project.miHoYo announced a plan for several future updates which will be implemented every 6 weeks,adding new content and features into the game to keep players excited.According to the developer,it will take several years to complete the whole story content.MarketingmiHo

55、Yo revealed the game at E3 2019,one of the largest video game conferences where developers and manufacturers introduce upcoming games and gaming products to the world.miHoYo uploaded the first official YouTube video for Genshin Impact that showcases beautiful in-game footage,raising public awareness

56、 of the game one year ahead.miHoYo also utilized and turned the pre-registration process into a community event by creating a milestone rewarding system in which players would receive more in-game rewards the more people sign up;thus,encouraging people to work together and refer the game to their pe

57、ers.With this marketing campaign,Genshin Impact achieved more than 10 million pre-registrations on its official website.During the release period,miHoYo aggressively promoted the game through various online channels.The firm invested in Google Ads to reach millions of people globally with video and

58、image advertisements that show real gameplay,story,and characters.The ads were different depending on their country of residence and other demographical data.miHoYo also uses social media like Facebook,Twitter,and Instagram to advertise and engage with the audience.They also recruited gaming influen

59、cers to play the game,stream content,and encourage their fans to try the game.Besides online channels,they also run offline advertising campaigns on billboards and public transport.11MOVING CHINA BRANDS BEYOND BORDERSCase studySHEINMarketingWhile established fashion retailers typically use Instagram

60、 to engage with their consumers,SHEIN partnered with countless micro-celebrities on TikTok through its SHEIN Official Affiliate Program.This mutually beneficial partnership allows the brand to expose itself to new audiences,while giving many small influencers a chance to receive free clothes and oth

61、er products from SHEIN.The program also allows its affiliates to post TikTok videos of their#SHEINhaul,which parades an array of trendy outfits to their online fans.The hashtag went viral,especially among Gen Z consumers,who look to the TikTok hashtag trend as a source of fashion inspiration.Some ev

62、en participate to express their pride in finding low-cost items that replicate high-end looks.As a result,SHEIN created an environment that allowed shoppers to feel smart and savvy in finding,purchasing and owning the“perfect”outfit.SHEIN uses user-generated content for its promotional activities.In

63、 blogs,articles and videos,the idea is to connect with content creators and real-time users to make convincing stories about their products.Younger consumers have trust issues with celebrity endorsements,as people know that celebrities are paid to do the promotion.With real-time users,they have high

64、er level of reliability.Highly rated products sell out faster.SHEIN has implemented gamification into its app,rewarding customers with points for frequent cumulative logins,playing its in-app minigames and leaving reviews as younger shoppers spend more time on mobile devices.In May 2021,it surpassed

65、 Amazon to become the most downloaded shopping app in the United States.DRIVING TRANSFORMATION FOR MARKETERS&THEIR AGENCIES12Case studyPerfect DiaryPerfect Diary is an e-commerce-based cosmetic brand.Founded in 2016,the Yatsen-owned brand has quickly conquered Chinas cosmetics market with its slick

66、marketing tactics and deep understanding of what makes its young consumers click.The company is committed to exploring trends in international cosmetics and provide easy-to-use products for young Asian women.Perfect Diary launched co-branded cosmetic products with KOLs,idols and even organizations l

67、ike the British Museum.With Southeast Asias beauty market expected to be worth$47.1 billion by 2025,Perfect Diary chose the region as its first destination abroad.And in just one year,the brand top cosmetics categories in Malaysia,Singapore,and Vietnam.MarketingTo break into the highly competitive w

68、estern beauty market,Perfect Diary started to work with beauty Youtubers.Kelly Strack,a famous beauty guru with over 886K subscribers,posted a video named“Testing New Makeup Brand Perfect Diary”in collaboration with the brand.One of the first American Youtubers that Perfect Diary worked with,the vid

69、eo attracted over 50K views and over 300 comments.Majority of the comments mentioned they never heard of this brand before.The video was released only a week before Black Friday,and Perfect Diary was able to gain a wider consumer base and a possible sales boost.Perfect Diary appointed Troye Sivan as

70、 its brand ambassador for a collection.Although it was officially promoted in China,the videos featuring the music artist were uploaded all over online platforms in western countries such as Twitter,YouTube and Instagram.The population base is much smaller in Western countries,but the market for bea

71、uty products is relatively more saturated than in China.Having products promoted indirectly on Western social media platforms is an effective channel to westward expansion without setting up bricks-and-mortar stores early in the expansion process.13MOVING CHINA BRANDS BEYOND BORDERSCase studyShang X

72、iaShang Xia,founded in 2009,offer high-quality products with a contemporary twist on traditional Chinese aesthetics and crafts.As a Chinese luxury label backed by the international luxury brand Herms,Shang Xias products include ready-to-wear,leather goods,accessories,furniture and home accessories.T

73、he products are designed to fill the nostalgic gap left by the Cultural Revolution when many traditional Chinese artefacts were lost.Each piece is delicately crafted with all raw materials sourced from within China.MarketingOne huge obstacle that stood in the way of the success of Shang Xias initial

74、 brand communications was“How does one make the concept of“Made in China”ultra-chic?”.The negative association of Made in China products as being poor in quality was an issue that Shang Xia had to tackle head-on.To do this,they created a digital campaign surrounding a mysterious masked man travellin

75、g from China to bring“culture seeds”to Paris.The campaigns high-end aesthetics generated organic conversations on Sina Weibo,one of Chinas most popular social media websites.The campaign garnered over six million views on social media platforms and provided Shang Xia with exposure in the initial lau

76、nch days.Shang Xia lands in Paris through an exclusive collaboration with the Muse des Arts Dcoratifs,coinciding with the celebration of the Chinese New Year.They wanted to attract French customers through this new collaboration and introduce its historical“savoir-faire”to the European public.DRIVIN

77、G TRANSFORMATION FOR MARKETERS&THEIR AGENCIES14HOW R3 CAN HELPLike an executive recruitment consultant helping you find new staff,R3s Review process helps you reduce risk and maximize the value of your new agency hire.We leverage our latest agency market insights and benchmarks for fees to conduct a

78、 thorough and efficient search process.Our objective is to create a long-term,mutually profitable partnership of talent that will drive brand and business growth.Agency ReviewA successful client-agency relationship is one in which both goals and expectations are aligned.That relationship requires pe

79、riodic checks to make sure both parties are still aligned and to rectify any issues promptly to ensure continuous improvement.It is important that a sound compensation structure is in place one that works to align expectations through set Key Performance Indicators and Performance Based Remuneration

80、.Regular updates to share feedback and expectations allow agencies to be informed of their performance at an early stage so that improvements can be made accordingly.Agency RemunerationFinding someone to wed is never as challenging as keeping the marriage intact year after year it requires work.Our

81、Relationship Management tools differ from most in-house or self-administered tools in that they focus on the future,not the past to ensure the right expectations can be set.Agency Relationships15MOVING CHINA BRANDS BEYOND BORDERSAbout R3What we doWe are an independent transformation consultancy hire

82、d by CMOs to make their marketing more measurable and accountable to business impact.How we do itOUR REASON FOR BEINGIn a word,we are about transformation.R3 was established in 2002 in response to an increasing need from marketers to enhance their return on marketing,media and agency investments,and

83、 to improve efficiency and effectiveness.We want to help CMOs make marketing accountable.OUR BACKGROUNDWeve worked with more than one hundred companies on global,regional and local assignments to drive efficiency and effectiveness.We have talent based in the US,Asia Pacific and Europe and partners i

84、n LATAM and Africa.Through global work for Samsung,Coca-Cola,Johnson&Johnson,Visa,Unilever,and others,we have developed robust benchmarks and process targets for more than 70 countries.We invest in the best talent,bringing in senior leaders from marketing,agency and analytic backgrounds.Were indepen

85、dent.Because were not your marketing team or agencies,were empowered to be honest and transparent.We use external benchmarks.We have proprietary data pools to inform our in-depth analysis.Since 2002,weve interviewed more than 2,000 marketers about their agency relations.Since 2006,weve spoken to mor

86、e than 80,000 consumers in Chinas top-twenty cities and continue to do so every three months.We have co-developed software to measure agency and media performance.Each month,we exclusively track over 500 agency new business wins,as well as 100s of deals in the marketing M&A space.We have insight int

87、o global best practice.We work with companies who want to do best-in-class marketing across diverse categories and geographies.We authored the book“Global CMO”about marketers leading Digital Transformation around the world.We maintain an ongoing database of media costs for key markets.RETURN ON AGEN

88、CIESWe help marketers find,pay and keep the best possible agency relationships covering Creative,Media,PR,Digital,Social,Performance,Event,Promotions and CRM.We take the lead on improving the Integration process through proprietary software and consulting.RETURN ON MEDIAWe offer professional analysi

89、s of the media process,planning and buying with proprietary benchmarks and tools to set and measureperformance.We conduct financial audits to validate and benchmark transparency.Using a bespoke and proprietary methodology,we help benchmark and provide insights into how your digital strategies perfor

90、m in your category and across categories.Driving Transformation for Marketers and Their AgenciesRETURN ON investmentDRIVING TRANSFORMATION FOR MARKETERS&THEIR AGENCIES16BeijingA1906,Chaowai SOHONo.6B Chaowai StreetChaoyang DistrictBeijing 100020,ChinaT+8610 5900 4733F+8610 5900 4732Hong Kong23/F,One

91、 Island East18 Westlands RoadHong KongT+852 3750 7980ShanghaiRoom 802,80 North Shaanxi RoadJing An DistrictShanghai,PRC,200041T+8621 6212 2310Singapore1 Keong Saik RoadSingapore 089109T+65 6805 4050Asia PacificContact W MediaSydneyLevel 26,1 Bligh StreetSydney,NSW 2000New York79 Madison Ave8th FloorNew York,NY 10016T+1 646 416 8088North AmericaLondon68-80 Hanbury St,London E1 5JLT T+44 20 7998 9588Europe