We often hear about the winners in life, and China market entry is no different. From Burberry to Downton Abbey, we're often reminded of when British brands get it right in the world's third biggest consumer market. But while Chinese consumers love "Brand Britain", success is by no means guaranteed. Take something as seemingly innocuous as Peppa Pig, recently hit with an online ban because of its popularity among young rebellious types. Even an animated pig can encounter resistance.
In recent years, some of our biggest and proudest household names have slipped up in China. Take a look at the following epic fails.
We might have had our Weetabix in the UK, but Chinese consumers were less keen. Market share disappointed because congee and steamed bread remained firmly entrenched breakfast habits. Weetabix, of course, is a cold and damp cereal (not unlike the British climate) which, while delicious and coming with a royal warrant and nutritional benefits, failed to excite the Chinese palate. As a result, Weetabix owner Bright Food - a Chinese company no less - put the company up for sale in January last year.
Low brand awareness was meanwhile cited as the cause of Mark and Spencer's difficulty in the China market. Jiangsu Business News went as far as to say that M&S "never bothered to learn about China". More specific reasons suggested included a failure to tailor its clothing to Chinese body shapes and a weak online presence. After continued losses, the retailer closed its 10 Shanghai and Beijing stores in 2017 - a decade after opening its first in China, a store in Shanghai.
A failure to understand cultural differences, and a mistaken belief that its famous Clubcard (which has 17 million users in the UK) would appeal to Chinese consumers, was blamed for Tesco's struggles. In 2014 the retail giant relinquished total control of its China operations and completed a deal to form a joint venture with the conglomerate China Resources Enterprise.
ASOS pulled out of China in 2016, instead opting to serve from Europe and a global website. Trade regulations resulted in a £4 million loss, while one seasonal range of clothing in a country of multiple climates and a challenging ecommerce market dominated by juggernaut Alibaba were among the other reasons given for the British online retailer's difficulties.
All of the above examples go to show that China is very large and very complicated, and that what might work from a cultural perspective in the UK might not necessarily work in Shanghai (population 24 million), let alone Shijiazhuang (population 4 million). ASOS' chief executive put it best when he said that "the Chinese market is unlike any other we operate in".
From understanding how consumers behave to having a solid grasp of the regulatory environment, it pays to do your homework before launching in China.
Which of course is where we come in! Think of Join in China as your experienced business mentor. If you're looking to establish the feasibility of investing in China, or if you need a complete service to help you launch your business, we will begin your journey with research. And it doesn't end there: we will also help you with a market entry strategy, culture training, compliance with laws and regulations, and other requirements.
And finally, in the event that the proverbial does hit the fan, be assured that not all is lost. Peppa Pig might be banned on a popular online platform, but it won't be stuck in the mud for long: our porcine friend will debut in Chinese cinemas next year in a production distributed by Alibaba Pictures. The film title? Peppa Celebrates Chinese New Year (no, we're not making this up) - a move that will likely satisfy the authorities.
If you'd like to find out more about how Join in China has helped prepare our clients for market entry into China please contact us.