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May 15, 2017

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How home brands win over local customers

PECHOIN, a Shanghai cosmetics brand with a long history, became the talk of the town after one of its advertisements went viral on WeChat, a popular instant messaging mobile app.

The ad shows a young lady in qipao, putting on makeup and leaving her stone-gated apartment in high-heeled shoes. She walks down the streets, past storefronts and people, as the ad effectively captures the social life of 1930s Shanghai. It then highlights the important events of modern Shanghai’s history, such as the opening of the first Western-style restaurant, the first law that enshrined monogamy, the first department store, among many others.

We can clearly see the city’s evolution from a sleepy outpost to a modern metropolis. Viewers probably may have expected the model to rendezvous in a coffeehouse, or at a dance hall or a salon. But instead she is shown inserting a pistol into a holster strapped to her thigh. Her identity is revealed — an assassin.

Her target: Time.

“My mission is to face off time,” she says while striking a flirtatious pose. A perfect tagline for a cosmetics company.

There is no doubt the ad is catchy, ingenuously designed with a strong storyline and all the eye-catching elements: sensuality, suspense and surprise. But it was also dogged by controversy after the advertising agency was accused of infringing rights by using copyrighted materials.

But that is not the point of the article. The Pechoin advertisement went viral on the eve of China’s first National Brand Day (May 10).

Decreed by China’s State Council, or the Cabinet, this day was intended to urge indigenous brands to go global while putting commitment to quality at the center of their formula for success.

Time-honored brands like Pechoin are already well-known at home and abroad. Foreigners are regularly seen snapping up its products in department stores.

Empowered by the Internet, many old brands are reinventing themselves as fashionable items. But compared to these bands, which usually have the heritage to fall back on, new homegrown brands face an uphill battle to stand out in the market.

With distribution channels and other vital resources dominated by established brands, the new entrants find themselves up against many challenges, including the long-running negative stereotypes about homegrown products.

For a long time, recurrent exposes of flawed products, as well as the notorious local culture of groveling before everything with foreign origins — or just foreign-sounding names — have undermined the credibility of Chinese products. However, the phenomenal success of brands like Huawei, Xiaomi and Haier seems to suggest that a correct marketing strategy is as important as quality per se in improving the overall image of “Made-in-China.”

For example, Huawei became widely sought-after overseas, thanks in part to its big-budget marketing blitz to sign football stars like Lionel Messi to endorse its products.

Newfound resourcefulness

For many Chinese businesses without the big money and technology to support their global aspirations, their path to build their own identity is riddled with hurdles, which is why it calls for resourcefulness in blazing new trails.

A handful of Chinese brands are benefiting from a newfound resourcefulness. For example, Baken, a diaper-maker in Hunan Province, emerged from obscurity following overseas media reports about the popularity of its products with German buyers.

It reportedly fared even better than some top brands after its diapers were tested for safety, softness, water imbibition and air permeability.

Domestic infant products have long been denied a vote of confidence by consumers unsettled by a spate of scandals involving melamine-tainted baby formula since 2008.

Knowing how hostile the local consumer culture was toward homegrown brands, the founder of Baken, Qin Xujun, chose to sell his products in the German market, where the standards are more stringent.

His plan worked.

I suppose his products would have remained unsold on store shelves if he had targeted the local market first. I for one certainly wouldn’t have bought from an obscure domestic brand.

If anything, the success of Baken has shown that domestic brands operating in “less trustworthy” industries can perhaps use the hostile local consumer culture to their advantage.

Fame acquired overseas is a perfect recipe to boost domestic sales.

After all, there is no reason why a brand achieving global recognition cannot reap similar success at home. The Chinese market is large enough for the likes of Pechoin and smaller, start-up brands as well.


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