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UK retailers fail in China because they don’t acknowledge scale of market, censorship arrangements or shopping habits, regional expert warns

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There's more to China than pandas: understanding the market is key to growth
There's more to China than pandas: understanding the market is key to growth
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China is a huge retail opportunity, but many UK retailers don't understand its market and cultural idiosyncrasies to succeed, Chinese payment company warns

Despite China being a huge potential growth opportunity for UK etailers, many are failing to break into the market because they don’t acknowledge its huge scale and localise their propositions accordingly. Furthermore, many retailers don’t understand the country’s strict censorship arrangements, or adapt to the unique shopping habits of Chinese consumers.

 

So warns Richard Morecroft, Director and Co-Founder of JGOO, a next generation mobile payments platform. He says: “Western retailers continue to look toward new opportunities in China, but this is not Australia, America, Europe, or even Hong Kong. Many international brands don’t make the grade in China because they fail to recognise they are dealing with a very different market and need to localise their offering.”

 

He continues: “There is a reluctance among smaller retailers to enter China as they watch on in despair as hugely successful Western brands such as Amazon, Google and Uber slink away in defeat when it comes to conquering the East. However, they shouldn’t be intimidated by China.”

 

In developing a strategy for China, JGOO says retailers need to focus on culture, censorship and local competition.

 

Culture

The key to succeeding in China is to recognise that it’s not one homogenous market but a diverse one. The country has an enormous culture behind it with 14 major cities, 23 provinces, 56 ethnic groups and 7 major dialects. Western brands often fail to alter their strategies, adapt to the unique culture and appropriately target the technology savvy consumers.

 

There is simply no culture like China’s and when it comes to cracking this market, one size does not fit all. It’s crucial for Western brands to do their research and avoid the ‘copy and paste’ approach when it comes to thinking about their China strategy. With the correct strategy executed, China is an almost unlimited opportunity for Western brands to get on the map.

 

Censorship

The Chinese government will go to extreme measures to maintain the country’s reputation and support local businesses in upholding their market share amongst a sea of Western brands. This has led to extreme censorship in China with Google, Facebook and WhatsApp being blocked due to China’s lack of control of these Western platforms.

 

This had led to the rise of China’s super-app – WeChat, which combines all the most pertinent Western apps such as Facebook, WhatsApp, Uber and Tinder and many more.

 

In order to avoid censorship issues in China, it is important for brands to do their research and adjust their strategies accordingly.

 

Competition

When it comes to the Chinese consumer, they have unique shopping habits, notoriously low levels of brand loyalty and they often refuse to pay with anything other than WeChat Pay or Alipay. For Western brands who seem to map these traits to an alien consumer, it can be difficult to compete with local Chinese brands who inherently understand consumer traits such as the above.

 

Morecroft concludes: “Western brand are not doomed to fail in China. To succeed, they need to play to consumer preferences, and do their research before attempting to tap into China’s digital generation.”

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