Multinational brands must be China-specific, not rely solely on global experience to thrive on the mainland, analysts say
- Multinationals must view China as a singular market and not simply transfer their global experience to the country: Kantar Worldpanel executive
- Setting up a China-specific operation model, with local teams on the ground, is very important, Bain analyst says
Multinational consumer brands need to be agile and adapt to rapid change and keen local competition to thrive in China, and avoid the blind application of global practices, analysts said.
Multinationals must tailor their business models to the rapid changes and growth seen in Chinese consumer tastes and consumption to be successful.
“Multinational companies’ performances in China varies widely, with some achieving outstanding performance in the Chinese market,” said Jason Yu, general manager of Kantar Worldpanel Greater China. “Overall, if multinational companies could manage to view the Chinese market as a singular market, and not simply transferring their global experience to China, they will be well set up for success.”
“Sometimes, the scale of multinational operations and the bureaucracy involved become an obstacle for multinational companies’ development in the Chinese market,” said Joanna Lu, an expert partner at Bain. “That’s why setting up a China-specific operation model, with local teams on the ground, becomes exceedingly important.”
The coronavirus pandemic, especially the ongoing lockdown in Shanghai, has entrenched consumer trends such as online shopping. This trend has been particularly palpable in the luxury goods sector, which has seen tremendous growth in online sales since the pandemic started.