5 Things You Need To Know to Successfully Do Business in China, with Julien Gueuning and Christophe Branchu
“If we could inspire a movement that would inspire social good, we will like to further incorporate Chinese culture into modern functional design. A good example is this smart kettle that our team designed for a client (see below). We have incorporated traditional materials such as wood and ceramic while maintaining a sleek look and maintaining excellent functionality. As China changes, the Chinese people will continue to cherish their rich and ancient culture. Therefore, incorporating these cultural elements into design will give your products a trendy and distinctive identity. “
I had the pleasure of interviewing the two co-founders of JU&KE Design Studio : Julien Gueuning and Christophe Branchu. They are working and living in China and have decided to launch their own studio two years ago to focus on industrial design catered to the booming Chinese consumer market.
Thank you so much for doing this with us! What is your “backstory”?
Julien: Before meeting each other, I worked for a well-known American designer in Shenzhen, at which time I also joined an incubator launched by Christophe that mainly worked with big international brands. We were both attracted to Shenzhen which was known as the global Silicon Valley of Hardware that is tightly integrated with an advanced manufacturing ecosystem. This goes beyond rapid prototyping — industrial designers like us can control the design outcomes better because your prototype is assembled next to an actual production line. In addition, it reduces the lead-time from prototype to production to enhance the speed to market.
Chris: As we received more queries from international brands seeking to launch their products in China and vice versa, JU&KE was born in 2016 as both of us believe in simple design philosophies. In particular, a well-designed product should “sing” to its users. When you buy an expensive piece of technology, you expect a sense of pleasure when you use it. So it’s important to bring function as well as positive emotion to the consumers.
Julien: To explain further, many international brands seek to design products specifically for the Chinese market. As both Chris and myself have been in China for over 9 years, we are more attuned to the local tastes while being better able to understand where international brands are coming from. JU&KE offers a comprehensive “Go To China” solution where we design a product, handle visual identity elements such as the packaging & Chinese copywriting and offer access to key Chinese e-commerce channels like Alibaba’s Taobao and JD.com. We serve brands from various industries such as technology, cultural products, lifestyle products, jewelry and transportation (see the collage below that displays an intelligent robot household assistant and some of our watch designs).
Chris: Although our company is very young, we won the CES (International Consumer Electronics Show) 2017 Best of Innovation for our “Obsidian” 3-D VR camera (see below) developed in cooperation with Kandao Technology, a Shenzhen-based startup.
We know that it is not always easy for a foreigner to do business in China. Can you share an interesting story about a challenge that you faced, and how you overcame it?
Chris: We had launched products on international crowdfunding platforms like Indiegogo and a Chinese crowdfunding platform that is run by Xiaomi which specializes in manufacturing value-focused smartphones that have high specifications but are cheaper than their counterparts. This brand also co-opts partners to nurture a complementary product line-up that includes items like rice-cookers and robot vacuums. Such platforms are a vital part of the hardware manufacturing ecosystem to gauge demand for the latest prototypes.
For background information, it is difficult to list products on Xiaomi’s crowdfunding platform as you need to be an approved Xiaomi hardware partner first. Xiaomi will scrutinize your brand’s track record before offering access to their loyal user base.
Another point is that Chinese e-commerce return policies are very liberal with “no questions asked” being the default standard. As such, it is very common in China to buy for example a single item in different colors, and upon receipt, pick the most interesting one while returning the rest. These liberal return policies apply to crowd-funded products as well which means that brands are going to face a big backlash from Chinese customers if they deliver a late or substandard product.
Julien: Rather than face a flood of cancellations and accusations, we advise our clients to take their time before pitching a new product to a Chinese crowdfunding platform. On the positive side, Chinese e-commerce has helped for foster a generation of discerning customers who are willing to pay more for quality and unique design. More on that later!
Are you working on any new or exciting projects now?
Chris: A home-grown watch brand that is a Xiaomi hardware partner approached us to launch a new product on Xiaomi’s crowdfunding platform. This is very exciting opportunity for both parties as their initial model (see picture above) had generated over 8 million CNY (around 1.2 million USD) sales within a week of launch. This watch brand is seeking a partnership with us to develop an upcoming product that will be launched towards the end of 2018.
This is another aspect of Chinese B2C business: when you have achieved traction with an outstanding product, it is relatively easy to snowball this success through digital word-of-mouth as Chinese customers are active social media users.
What advice would you give to other business owners who do business in China, to help their employees to thrive?
Julien: We are always on the lookout for talented designers. At the very beginning, we hired junior designers to train them ourselves. More senior staff are tougher to find as turnover rates throughout China are high.
We now look at experience of course but we also want to give our staff a chance to grow with JU&KE. If they can grow their skillsets and salaries with us, it is more likely that they will stay in the longer-term. This is an approach that other business owners may wish to consider too.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Chris: We will not have succeeded without each other. There’s no one particular person to highlight. It is all about “Guanxi” or relationship-building in the Chinese business context. We have received many referrals and this is vital to grow the business as there is already a certain level of trust at the start of a relationship. We have a rich network of “Guanxi” to draw upon from 9 years in China and our international clients will also benefit from our networks.
What do you think are the new untapped markets in China that may become the next “big thing”?
Chris: I will like to highlight importance of the new generation of Chinese consumers born after 1990. This group are in their twenties right now and grew up in a era where the Chinese people were becoming more self-confident. They are digital natives and also more internationally-oriented with overseas study or work experience.
Looking at this McKinsey study, this generation is more willing to spend on themselves than their parents, who grew up in a less prosperous era. However, our experience is that they are only willing to spend on products and services that meet their high standards. Therefore, there is a massive opportunity for brands that invest in design, innovation and quality as their products are more likely to resonate with this generation of consumers.
Julien: To add on to the point that Chris made earlier, the Chinese consumers are becoming self-confident. This new generation is keen to consume high-quality Chinese cultural products that have been refreshed. For example, JU&KE has been working with a few tea-makers to provide new visual identity and packaging designs for their high quality tea. An international brand that is seeking to enter China may also consider shortlisting ways to blend their products or services with Chinese cultural products. At JU&KE, we seek to be part of this wave to re-imagine products, design and functionality.
We keep hearing about the “Trade War”. What are your thoughts about it? Given the unknowns, how do you plan to pivot?
Julien: We have read and heard many things about this “Trade War” in the media but from our perspective there has been no impact on our business as we are not in the import/export business.
What are your “5 Things You Need To Know To Successfully Do Business In China.” (Please share a story or example for each.)
Design is king: China is no longer a copycat market and the consumers here are very discerning. A successful design is not just about making a product but about building a strong brand. An example is Three Squirrels, a best-selling Chinese nut brand that has resonated with youths.
Speed: Shenzhen offers the best ecosystem for hardware companies from engineering, prototyping and manufacturing in the world. A project that takes one year in France only takes six months in China. In China, you either get faster or get left behind.
Understanding China’s Youth: To succeed, brands need to understand how youth are consuming media and products. For example, many brands are actively leveraging key opinion leaders (KOLs) to sell promote their products on native social media platforms such as Douyin (a short video platform). If not, your brand will not last in China.
Quality Matters: Brands should be aware that Chinese consumers are willing to pay more for higher quality. Higher quality includes guaranteeing food safety and tapping on naturally sourced ingredients. So far, we haven’t seen signs of Chinese consumers pivoting to a more environmentally conscious consumption path.
Intellectual Property (IP): We advise our international clients to register their IP in China even though there may be some cross-border recognition of overseas IP within China. From our observation, the quickest way to remedy IP infringements is to tell the relevant Chinese e-commerce platform (say Taobao) that you own a Chinese IP, furnish the documentary evidence and seek enforcement action against these IP violaters. Typically, IP violaters will be forced by the e-commerce platform to stop sales of their copycat products.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Julien: If we could inspire a movement that would inspire social good, we will like to further incorporate Chinese culture into modern functional design. A good example is this smart kettle that our team designed for a client (see above). We have incorporated traditional materials such as wood and ceramic while maintaining a sleek look and maintaining excellent functionality.
As China changes, the Chinese people will continue to cherish their rich and ancient culture. Therefore, incorporating these cultural elements into design will give your products a trendy and distinctive identity. We will like to invite everyone to take a look at our Pinterest account and get inspired when looking for such opportunities.