Chinese consumers have long been known as the world’s most fickle consumers.
For years foreign brands have hoped to win their loyalty employing initiatives that worked in western markets, but had little effect halting Chinese shoppers’ infidelity.
One of the best-known case studies is Tesco, which announced its successful Clubcard from the UK would be its “secret weapon” in conquering the China market.
Instead, it turned out to be another valuable lesson about the need for foreign brands to understand and localise for Chinese consumers.
China’s retail sphere has vastly evolved since Tesco retreated from China in 2013, but some characteristics remain. Until recently, China had very few brands or marketing.
As a result, consumers have not grown up with the inherent brand loyalty we often see in the West, such as having our parents or grandparents faithful to the same washing powder or cars when plenty of competition persists.
The limited historic attachment to brands is amplified by the hundreds of new products launching in China every day, trying to yell the loudest and offer the most to lure consumers.
In many ways, the overwhelming number of launches and resulting competition fuels Chinese consumers’ lack of trust in products. This can provide a platform for brands to build loyalty based on trust and other factors.
There are brands which have successfully cultivated loyalty among Chinese consumers.
The largest-scale example is Alibaba, which has enticed hundreds of millions of shoppers to religiously log into its shopping and payment apps daily.
The company has a natural advantage as Chinese consumers are more loyal to shopping platforms than individual brands themselves.
The result is most online shopping is happening on platforms that enable consumers to easily compare brands and prices, and the experience is consistent and relatively transparent.
Alibaba employs numerous tactics to increase loyalty, from events such as beach parties, to better customer service, to their just-launched paid-loyalty program.
Its program paid off when other brands can’t even get consumers to use their free loyalty offers.
Alibaba’s program is centred around discounts valued at nearly ¥2,000 ($291) a year across Tmall Supermarket, Tmall Global, Youku, Ele.me, Xiami Music, and film ticket service Taopiaopiao for members in a strategic move that will likely see them shopping around a little less.
Deals and discounts still resonate with Chinese consumers at all levels, yet all is not lost for brands which want to focus on other ways to win and keep the hearts of their target markets.
Chinese consumers are exhibiting increasingly mature traits, particularly younger ones, and are much more likely to be loyal to brands that connect with them and push their buttons.
It’s just a case of understanding what those buttons are.
This article was originally published on http://www.ChinaSkinny.com
Mark Tanner is the founder and managing director of Shanghai-based China Skinny. Through his agency he has worked with over 150 international brands such as IKEA, Colgate, Tourism Malaysia, ANZ, Westpac and IHG on their China market entry and growth strategies, trend analysis, branding and new product development.