Syndicated from China Design Hub
China is a place where quick money can be made: this is one of the misperceptions many brands have before coming to China. In fact, there are many crucial factors to consider first when planning a brand expansion. Some of these things to consider we have listed here.
1. Research the market to make sure that there is the required market potential and that your brand can compete against rivaling companies. In most cases, business models working fine in other markets and an existing range of products need to be altered.
2. Analyze the brand image and check whether details of the brand corporate identity and positioning need to be adjusted to the Chinese market. This could be an emphasis on certain values, or an adaptation of parts of the visual identity such as colors and materials used in the store design.
3. Be realistic about the financial investment and long term commitment that is required for a successful presence in China. Store rents, salaries, advertising and import costs are higher than many expect. Plan for the long term.
4. Choose a city for the company headquarters and first store. Both Beijing and Shanghai have their own advantages. You should look at the existing brand landscape, consumer behavior, established competitors, but also at available access to media, government institutions and business partners. In every case your decision needs to be in line with your expansion plans. Visit our blog posting on the retail potential of different Chinese cities for more information.
5. Look for store locations which both offer high foot traffic and satisfy brand requirements. Traditionally, many retail environments with a well-established, wealthy customer base were housed in rather outdated spaces affecting the image of international brands: Store designs in China could not be executed in the same way as in other locations. Modern and well-designed shopping malls however could not offer the same foot traffic. Things are slowly changing, but brands will continue to have to make a compromise.
6. Spend time in researching and planning your distribution strategy. Carefully consider working with shopping malls as opposed to department stores – each model has their own advantages and implications on setup and accounting.
7. Ensure that the brand message in advertisements and in stores is aligned. Many brands communicate a different image in print media or on their website and through their store design. Sometimes, products promoted in media are not available in the stores, and in many cases the store environment including design, merchandise and sales staff is not up to the customers’ expectations.
8. Hire a motivated team for office and stores right from the beginning to push the brand’s development, since it takes time for a new brand to create awareness and take off.
9. Make sure that you choose the right partners with experience in your market. That applies to registration and accounting companies, but also retail design practices or licensees.
10. Stay in for the long run. Keep in mind that China is a very quickly developing and dynamic market and stay updated to be ready when changes are necessary. On the other hand, due to cultural reasons and the obvious size of the market, good things take time to develop. Build a solid foundation and observe the progress.