Since the reform and opening-up in the late 1970s and early 1980s, numerous enterprises invested by foreign investors from Europe, America, Japan and South Korea have been established in China, ranging from some familiar large multinational companies such as McDonald's, Starbucks, Sony, and Samsung to leading global brands in various fields including IKEA, Lululemon, Logitech, Lexus, and to countless overseas companies in different market segments. All those delivered a riveting performance of marketing on the stage of 40-year foreign company operation in China.
Since World War II, as the comprehensive national strength of European countries, the United States, Japan, South Korea and other Western developing countries were constantly enhanced, those countries have embarked on a path of global expansion contributing to Globalization 1.0. In that era, Chinese enterprises played minor roles in globalization.
But China's growing comprehensive national power with the passage of time facilitated the global footprint of its local companies in an all-round way. The biggest difference lies in the trend of deglobalization due to changes in the global business landscape and geopolitics since 2018. In such context, Globalization 1.0 gave way to Globalization 2.0, a new phase involving the multi-polar development paths and business uncertainties due to geopolitical conflicts instead of the clear division and harmonious unification among countries around the world. In Globalization 2.0, Chinese enterprises depart from its secondary position and take active and prominent roles in overseas development.
Marketing is an integral part of overseas development. However, few Chinese companies are fully prepared for cross-border marketing. Moving from a supporting role to a leading role remains a challenging task. For the decision-makers of go-global enterprises in China, the transition from spectators or participants in the localized development and global presence of foreign-funded enterprises to undertakers of Chinese enterprises seeking for overseas development indicates more responsibilities, risks and challenges. However, compared with the opportunities in the broad and diverse global market, it is inevitable for Chinese companies with excellent production capacity and experience to embark on the journey of globalization. For decision-makers in the preparation or process of overseas development, are there any effective ideas and methods that can help them make more adequate marketing preparations and avoid detours?
Perhaps we can conclude from the following enlightenments. In the last four decades, for different types of foreign-funded enterprises in China cooperating with Landelion, China was an overseas market for them at that time. A series of marketing actions they took when entering the Chinese market, including their strategies of reducing the development risks in China, their marketing plans for the Chinese market, their entry point of the local Chinese market, and their stories targeted at local consumers in China, are valuable experience for Chinese enterprises that can accelerate their global business expansion. Based on relevant researches, Landelion leverages its long-term experience in serving foreign-funded enterprises to conclude enlightenments in three points: localization strategies, localized communication paths and localized marketing devices, separately delivering solutions for thoughts, channels and methods in their localization.
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Localization strategies
Firstly, from the perspective of marketing strategies for overseas development, foreign-funded enterprises adopted a set of localization strategies for their development in the Chinese market. At that time, “Think Globally, Act Locally” was a famous advertising slogan for foreign-funded enterprises in China. The slogan implies that the primary marketing strategy of foreign enterprises access to Chinese market is to localize their brands and products and tell their brand stories to Chinese consumers.
How did foreign-funded enterprises implement the localization strategy? We found they followed three steps: (i) to cultivate localized thoughts, (ii) to start with local habits, and (iii) to establish a local presence.
In general, people tend to put themselves first, lacking sufficient ability to think from a different perspective. Such idea also hinders Chinese enterprises in their overseas marketing. To cultivate localized thoughts, it is recommended to focus on overseas teams first and recruit talents with different cultural backgrounds (not confined to domestic background). If it is too late to build a team with diverse backgrounds, seeking support from professional institutions with multicultural and multilingual backgrounds is a sensible option.
The entry point of local habits mainly refers to the understanding of habits of local consumers or clients, and foreign-funded enterprises are skillful players in this area. Specifically, local habits include words, graphics, colors, packaging and animations accessible to local consumers, as well as the music, touch, and smell catering to local preferences. If a company can easily adapt to local habits, the local consumers or clients may forget these products and services are offered by a foreign enterprise.
The establishment of local presence is the last and most important step in the localization strategy. Establishing a local presence puts forward two requirements for enterprises. The ability to link various resources in the local market is a prerequisite. And if the company seizes a suitable opportunity subsequently and plans to build a team in the local market, the in-depth participation of local talents is crucial for local presence. When a company is in the early stage of its globalization, it may be difficult to achieve resource links and local talent recruitment. Therefore, it is advisable to cooperate with professional institutions with the ability to link local resources.
Localized communication paths
Based on the localized thoughts, foreign-funded enterprises have developed a set of mature communication paths of localization, that is, the way to reach local consumers and clients. When a foreign company steps into the Chinese market, the localized communication paths deliver solutions for storytelling in its own voice to local consumers or clients and being found, heard or accepted by local consumers or clients.
Regarding the active expression to consumers, foreign companies generally take two steps. Firstly, establish their brand bases in the local market and accumulate quality content and stories. Secondly, organize campaigns for local consumers and clients.
Over the past 40 years, the brand base in China for foreign companies has shifted from the initial news reports and in-depth interviews on radio, television and print media to the current digital marketing platforms such as WeChat, Weibo, Douyin, Xiaohongshu and Zhihu. Meanwhile, the communication content on the current brand base has become richer and ever-diversified, involving advertisements such as product reports, and character portrayals, brand stories narration from multiple perspectives and other advertorials.
In addition, foreign enterprises continue to innovate their campaigns in China, from common product launches to professional forums, from free product trials to followers meeting, and from offline sponsorship activities to online live interactions. Traditional advertising and reputation and recommendation on social media are two main ways for foreign investors to spread their voices and stories to local consumers.
For a long time, diversified advertisements and flexible placement marketing were used by foreign companies to make local consumers aware of and familiarize with their brands or products. For instance, CCTV’s advertisements were once the most effective form of mass advertising, and advertising in movies, TV series and variety shows has shaped the image of many foreign brands. Following the advent of the new media era, traditional advertising fades out of public lives. The new generation prefers casual and natural advertising. Therefore, foreign brands are using information flows advertising on social media platforms to appeal to consumers.
In recent years, reputation and seeding on social media are widely adopted by foreign companies, with the help of celebrities, KOLs, and KOCs in related fields to popularize their products and brands, forming a word-of-mouth effect in the local market. As a popular form of interaction in the current Chinese market, live streaming has been a necessary option for many foreign brands.
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Localized marketing devices
After specific localization strategies and clear localized communication paths, the last step is to adopt localized marketing devices aiming to achieve the purpose of overseas marketing.
Foreign-funded enterprises showed us the implementation of their marketing actions with by means of 4C Marketing Model. 4C Marketing Model refers to consumer/client, creativity, content and campaign.
Under the guidance of 4C Marketing Model, the first step is to identify the brand’s or product’s target audiences (i.e. consumers or clients the enterprise wants to attract) and conduct audience analysis for these people. The second step is to draw target audiences’ attention by adopting creative ideas that are practicable and consistent with local trends. Finally, enterprises can execute marketing actions and achieve marketing goals through preset marketing campaigns or prepared attractive marketing content.
More specifically, when the target audiences join a campaign (whether it is online or offline) organized by a foreign-funded enterprise, it is the most appropriate scenario and opportunity for the foreign-funded enterprise to implement its marketing actions.
When the target audiences stay at home and look at their mobile phones quietly rather than participate in campaigns, foreign-funded enterprises will push elaborate texts, posters, animations, comics, videos and other attractive contents to the users' phones, thereby reinforcing their long-term impressions of products and brands in a continuous way.
Based on 15 years of history in serving cross-border enterprises, we have roughly reviewed the marketing experience of foreign-funded enterprises whilst making a foray into the Chinese market in the past 40 years, in the hope of arousing more discussions. According to these enlightenments, Chinese enterprises seeking for overseas development can gain valuable marketing experience of overseas expansion and local development accumulated by many foreign-funded companies around them. We hope you and other corporate decision-makers whose companies are going overseas or planning to go overseas in the future can generate new ideas and inspiration after reading this article.