A question for time-honored Chinese brands: Sit in history or redefine it?
By Cecilla Yu
Inspired by a recent interview I did for Bloomberg Businessweek, I started noticing that in this day and age, we spend much time discussing the new era of Internet and how that encourages the arrival of new brands. Brands such as Xiaomi, Didi Taxi (a Chinese version of Uber) and others have changed the business model of many companies and the marketplace. Yet, this same conversation seldom extends itself to thinking about how those time-honored, older brands could and would (and potentially should!) adapt themselves to today’s ever-changing market.
So what’s the biggest challenge for most time-honored Chinese brands today? The answer isthemselves. The major reason that most time-honored Chinese brands today sit in history rather than on shop shelves is they are still caught up in the “old way of thinking.”
As it stated in our 2014 white paper, many Chinese today struggle with shifting their mindsets frombusiness-driven to brand-driven. The “brand” has always been there, but the mindset — as well as the consumer profile — is fairly new.
In early days, Chinese brands focused on functionality and utility. However, Chinese customers, like their Western counterparts have become more demanding than ever, not only for products but brands that deliver something more. They are seeking emotional bonds and a better experiences. They appreciate when brands have a unique perspective and want to do more than just sell products. Chinese consumers display a high propensity for sticking with those that share the same values as they do and make efforts to create amazing experience to “wow” them. Some Chinese brands are aware of that and have made the extra effort, but still, only a few of these legacy and heritage brands are fully engaged with the idea of changing up their strategy and messaging. This inability to shift their mindset from simply selling products to telling the product’s unique story and creating an experience based on that have stopped them from evolving while their competition — newer, younger, hungrier brands — continues to do so.
Take for example Gujing. Established in 1989, Gujing is a well-known Shanghai-based lingerie brand. Targeting a mid-range market, Gujing sells array of products but lacks an experiential component to their brand offering.
Aimer, another Chinese lingerie giant, has been taking a more aggressive stance and fashioned themselves as the Chinese Victoria’s Secret through runway shows, to their communications and messaging, to their branded locations: the Aimer Museum, the Aimer Club and the Fashion Space, among others. Aimer sells a story of confidence, which translates into an experience that goes past just lingerie and underwear.
Gujing is the complete opposite. Besides a name that has been around, there is no story being told. This month, they plan on reopening their flagship store in Shanghai and the brand intends and expects to surprise consumers with a fancy, new shop. It plans to dispense free products on the street, a demonstration of Gujing’s willingness to share with its consumers by showing off new or innovative products — not very original, or compelling.
Gujing’s main problem is this: they are a Chinese brand that has instant recognition in the marketplace, but they lack any edge or offering that would entice a new buying segment or a different consumer profile. But, because of a long history, it is still good to see that a brand is willing to try something “new” after all this time. The answer to Gujing’s problem though, is not to just “trust our products because we’ve been here for so long,” but rather, it should be how the brand knows Chinese women and the culture so well because of its longevity. The idea of free samples is clever, but not new, and it won’t bring about a change or some sort of rejuvenation. To really win the battle, Gujing must shift its mindset from production line to storyline. It needs to tell the Gujing story, one that is rooted in Chinese brand history and from there, redefine it into a clear, compelling, and contemporary story. Perhaps most importantly, it needs to connect customer touchpoints in that story in order to create an amazing “Gujing journey” that leads people through the Gujing experience.
Sit comfortably (but unoriginally) in history, or take bold step toward redefining history to drive relevance? It’s a classic “to go or not to go” question for many time-honored Chinese brands. In order for Chinese brands — both new and old — to connect to consumers, they need to be ready to go: to go the distance in telling a unique story, to go the distance and make themselves relevant again, and to go distance not only to win consumer dollars, but consumer hearts as well.
Cecilia Yu is a senior strategist for the Siegel+Gale Shanghai office.