jinNow almost four months into the COVID-19 pandemic, industries across global markets face the reality that the “new normal” remains uncertain. For the fashion sector, halted orders and supply chain disruptions have resulted in job losses, bankruptcies, and the closure of factories, brands, and high street chains.
With the threat of a second outbreak looming overhead, consumers are prioritizing their health and wellbeing, with industry estimates circulating that personal luxury will take a 20-25% hit this year. Moreover, with limited room for consumer travel — whether to a local store or on a weekend shopping trip — brands must find new ways to reach homebound shoppers.
“Reaching global Chinese shoppers presents an ongoing challenge for global brands. Under the current COVID-19 climate, brands need to adapt to reach the shoppers at home who would otherwise be overseas,” says Alpha Xu, founder of china digital marketing agency ASAP+.
Indeed, the travel limitations present a particular problem for brands targeting the Chinese market, where a large percentage of luxury spending happens overseas. In 2018, roughly 70 percent of Chinese consumers undertook luxury spending outside of China, according to McKinsey’s China Luxury Report 2019.
“Under the current COVID-19 climate, brands need to adapt to reach the shoppers at home who would otherwise be overseas.”
However, even before COVID-19 hit, the role of Chinese overseas spending was in flux. A general economic slowdown and the continued depreciation of the yuan, alongside a narrowing in price gaps from luxury brands and a rise in the demand for local brands, all meant Chinese spend started to point inward.
Now, this lucrative channel has been cut off altogether, hampering overseas brands and businesses who have depended on it. Whether because of COVID-19, or the general volatility of the Chinese market, brands create innovative strategies to reach this lucrative traveling consumer base.
When dealing with uncertain times, overseas brands can look to on the ground agencies to bridge their gap in knowledge. Selected by Fast Company China as one of China’s most innovative companies in 2019, digital firm ASAP+ is dedicated to just that. With global offices, ASAP+ leverages its expertise in China to offer brands support in overcoming supply chain barriers, digital marketing and digital selling.
As the luxury market in China begins to rebound faster than others, the challenge for brands is to identify efficient ways to connect with mainland China’s luxury shoppers who have ceased overseas travel.
Leveraging a trusted partner in China
While there is clearly still opportunity in China, budgets are tightening and businesses need to be sure of their return on investment as they navigate the market. Having a partner on the ground in mainland China is a major advantage for any entity looking to enter. As one of the few agencies leading in the adaptation of solutions for this challenging time, ASAP+ is offering tested packages to target global shoppers.
With a set track record of advancing overseas enterprises in China, ASAP+ can help companies to reach cross-border to target local shoppers. It has worked with a range of different players in the global fashion industry, including the contemporary fashion line Zara, the e-commerce platform GOAT, and the fashion-discovery platform Moda Operandi.
GOAT, the largest and most trusted sneaker marketplace, hired ASAP+ to establish authentic relationships with target consumer groups in China through curated content and social e-commerce strategy on the brand’s WeChat channel. By creating a new position for GOAT in China, ASAP+ enabled them to stand out in an already crowded market.
Overcoming supply chain barriers
Since the outbreak of the COVID-19 virus, the results of reduced outbound travel from China are being felt globally. A sales associate from an undisclosed luxury brand’s flagship store in the US, informed Jing Daily that to counteract sharp sales losses, she has been reaching out to her list of private buyers — in particular her Chinese clientele: “A lot of my Chinese clients flew back to the mainland. They are still interested in purchasing though, and have asked me to pre-order the latest collections they like.”
While shoppers who once purchased overseas now have no choice but to purchase locally in China, as supply chain disruption threatens brand ability to fulfill orders. In a country that operates an already complex logistics import and logistics system, shipping officials in China are now prioritizing essentials like medical supplies and there has been a significant slow down in logistics. Any added procedures to this process will accelerate a brand’s difficulty to transport goods.
Moreover, for overseas entities that rely on drop-shipping to purchasers on the mainland or are without a logistic partner, it will be almost impossible to deliver goods in a timely, secure manner. By taking care of all shipping logistics, ASAP+ guarantees that brands will be able to overcome any logistic challenges the Chinese system China entails.
Further, the agency ensures that companies are able not only to import but also deliver their goods to the Chinese market, leveraging relationships with local logistics partners. By creating a transparent shipping tracking system, overseas and local execution teams can operate cohesively to authenticate that goods are dispatched securely and efficiently.
Digital marketing through COVID-19
Once products can physically enter the market, companies need to realize the technological opportunity that digital marketing in China affords — especially during COVID-19. In recent months, China continues to lead in digital creativity — even small designers are using a range of online apps to interact with customers and leveraging livestreaming “see now, buy now” sessions.
The power of Chinese influencers on local audiences is now clear, and partnering with a reliable KOL is a strong power play — but not without risk. Given the roll of the dice accompanied with hiring a KOL or KOC, companies need to be sure these strategies will deliver. In addition, merely working with KOLs does not ensure brands receive their return as expected.
The power of Chinese influencers on local audiences is now clear, and partnering with a reliable KOL is a strong power play — but not without risk.
Increasingly, brands need to understand how to apply private traffic — traffic that is owned by the brand or the consumer on official or personal WeChat accounts, friend groups and so on. This can be used freely and monetized through various advertising plans. Private traffic can further help to maintain communities created after KOL marketing.
Combining hands-on knowledge in both the KOL and private traffic, ASAP+ leverages its know-how of the intricate influencer market in China to help brands maximize their return on investment. For GOAT’s official e-store Mini Program, the agency successfully leveraged online style sneaker KOLs to accurately reflect the values of the American company for Chinese audiences and effectively drive traffic.
Additionally, ASAP+ supports companies with media buying, advertising, and investment. In this way, the firm works with brands to devise a long-term vision that looks beyond the current state of the lockdown and strategizes a brand’s future in the market.
Digital selling and optimization
Selling online is the lifeblood of nearly all brands in China; for some brands it has resulted in their survival during the outbreak. Tencent’s WeChat in particular has emerged as a pivotal mainstream channel of choice for consumers to make digital transactions. WeChat, known for its digital marketing matrix, is powered by cutting edge technology that includes big data and artificial intelligence — technologies that help WeChat track down a marketer’s target audience and direct advertisements to specific groups.
ASAP+ has identified WeChat Mini Program pop-up stores as an easier way for overseas brands to create social buzz online. It also allows them to test the market with the likes of exclusive editions and collect valuable insights at an early stage of market entry. The increase of D2C touch points on their apps, Mini Programs, and even WeChat groups, will help to grow loyalty as well.
According to an official report released by WeChat, over 90% of luxury brands have established a WeChat Mini Program by the end of 2019. Given this, it’s become a platform for online selling, brand service, and customer loyalty that brands cannot afford to neglect.
ASAP+ takes the difficulty out of setting up and running a WeChat store online, providing companies with reliable and fast access to sell on this valuable platform. ASAP+ facilitates a smooth, digital roll-out of account set up, e-store creation and optimization, cross-border logistics and payment configuration as well as content ideation and production — all within 30 days.
At this time of uncertainty, the urgency to engage and maintain consumer interest is especially expedient: but as brands well know, if they can manage this, the rewards are potentially huge. ASAP+ offers a one stop solution that more and more international brands choose as their trusted partner in China.
This article is presented by China digital marketing agency, ASAP+.