Automotive Author:EqualOcean News Editor:Leci Zhang Sep 04, 2024 08:11 PM (GMT+8)

"I understand that we may not be well acquainted, but I am not someone who easily offers praise. However, the digital strategy you've provided is truly impressive." This was not the first compliment Baini received, nor would it be the last.

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In the early days of the internet era, Chinese companies learned from foreign markets by trial and error, but now, they have gradually developed their own unique online marketing strategies, reaping unprecedented success in the online market.

China's online marketing capabilities are globally recognized. With the rise of TikTok, the traditional marketing models of 4A advertising agencies have almost collapsed, significantly reducing the marketing efficiency of foreign brands. Meanwhile, domestic new consumer brands have risen rapidly, and traditional Chinese brands are quickly transforming. In just five years, no foreign brand on Douyin has been able to compete with local Chinese brands. Emerging brands such as Florasis (花西子), Adopt a Cow (认养一头牛), and Five Doctors (五个女博士) have completed in a few years what traditional brands would take decades to achieve.

China's overseas companies use online marketing to open up the Southeast Asian market. 

Source: YouTube, Ulike Instagram

Chinese companies have leveraged online marketing to open up the Southeast Asian market. Successful cases include HALARA, Ulike, and JW PEI, which have rapidly grown through precise brand positioning and digital marketing strategies, utilizing platforms like TikTok, Instagram, and YouTube. By collaborating with KOLs (Key Opinion Leaders) to tell their brand stories and showcase their products' functionality and style through short videos, they have attracted loyal users and expanded their global sales significantly.

In contrast, the European online marketing sector appears relatively weak. Many European and American companies lag in digital transformation and have failed to keep pace with the times. When entering the Western markets, many Chinese companies discover that online marketing is particularly challenging, not because the internet is less developed, but due to deeper economic and cultural reasons.

More and more Chinese brands are entering foreign markets, only to find that in the Western markets, offline retail still dominates. Chinese brands might need to adapt to these characteristics by leveraging their online marketing advantages while learning from Western brands' experience in offline marketing.

Westerners Don’t Understand “321 and Add to Cart” — Offline Marketing Is Still the Main Battleground in the West

On the last day of July, in Manchester, UK, TikTok's top beauty influencer in the UK, Paige Louise, set a new live-stream shopping record in Europe, achieving $2.06 million in GMV (Gross Merchandise Value). The previous record was held by Spanish-speaking American influencer Mandy Pena, with $1.21 million. Interestingly, Paige Louise's average live-stream sales were only around £30,000, so this represents a 50-fold increase.

This data clearly shows the potential for growth in online shopping among Western consumers. In China's Douyin e-commerce, the GMV targets and single-event records far exceed this figure, often ten times higher. Over the past two years, the entire Chinese population has witnessed and participated in the massive wealth-creating movement of Douyin e-commerce. Therefore, Chinese e-commerce is full of confidence in the online market. So why, in the developed Western markets, is the response not as strong as expected? The answer lies in Westerners’ heavy emphasis on offline experiences.

The primary reason is that online products don’t offer a significant cost advantage. In China, online shopping initially thrived due to price advantages, and it still does. The same item that sells for 100 yuan in a physical store might only cost 90 yuan or less online. This price sensitivity drives consumers to prefer online options. While physical stores in the West also have rental costs, they are not as high relative to local consumption levels, which means the price gap between online and offline products is less significant. Moreover, in developed countries, high labor costs for delivery drivers, logistics workers, and packaging further increase the price of online goods, diminishing the cost advantage.

A secondary reason is that offline shopping has a fundamental appeal. In Western countries, shopping is not just about buying products—it is a quality experience that includes service. Shopping districts and malls are not just places to shop but spaces for socializing and entertainment. Unique architectural designs of these centers often become symbols of local culture. Furthermore, the tangible experience of products, their look, feel, and the attentive service offered by staff make offline shopping more personable—something that e-commerce platforms cannot replicate.

A very designed London business district

Source: ArchDaily

From the perspective of online marketing methods, the marketing approaches in Europe and the United States are relatively basic. This has resulted in consumers in these regions not having been exposed to comprehensive digital marketing education, leading to a low level of understanding and acceptance of online marketing. In the area of social media marketing, Chinese companies have performed relatively well, demonstrating strong adaptability and innovation. However, many companies in Europe and the U.S. still lag behind in this regard, even appearing quite basic. For instance, their loyalist programs often lack systematicity and focus, resulting in poor execution. Moreover, European and American companies tend to have unclear management of digital profits and fail to fully leverage data to optimize their marketing strategies.

What kind of offline marketing do picky European and American consumers like?

Chinese companies have already performed quite well in online marketing, but there is still a certain gap in offline marketing and consumer experience compared to European companies. For European consumers, the offline shopping experience is crucial. A 2024 survey of 1,056 British adults showed that 85% of shoppers still prefer to shop in physical stores because they can get the products they buy immediately. In addition, 94% of respondents said they would first conduct online research before making a purchase decision, and 78% said they prefer to experience products in physical stores and then return online to find the best price. This emphasis on offline experience has become a major challenge for Chinese companies. So in Europe, what kind of offline marketing is more popular and stands out among many brands?

Innovative offline marketing methods create new brand spaces, such as New York’s hottest Blank Street Coffee recently:

Blank Street was founded in 2020 and currently has more than 50 stores in New York, London, Boston, and Washington, D.C.
Source: Blank Street company's official website

1. What would you choose if a company doesn’t deliver goods to your door but provides convenient pick-up points? Similar to how Amazon initially started with books, Blank Street started with coffee, using an app platform to build consumer trust. The name Blank Street suggests that it can offer a variety of goods, emphasizing convenience and curation. Currently, they are selling King David Tacos through the "Powered by Blank Street" project, a type of food that is easier to package on-site and more suitable for pickup than customized Sweetgreen salads. The success behind this business logic actually stems from New York's high labor and platform costs for delivery, so this store + pickup point function has been favored by locals in New York.

2. Blank Street's collaboration model is more like an offline/real-world advertising platform, where brands can expand their market through this method. For example, Magic Spoon can collaborate with Blank Street for a two-week breakfast promotion, and Away can launch a travel destination-themed coffee special. In addition, Blank Street can also use its real estate expertise to help brands enter the physical retail field. According to Blank Street's LinkedIn profile, the company's team members come from direct sales brands such as Away and Supergoop, as well as delivery startups Jokr and Zapp. Although this may be coincidental, if Blank Street can fully leverage partnerships and design, rather than just focusing on price, its brand model will become more coordinated. The success behind this logic lies in the fact that Europeans and Americans value offline experiences more than Chinese people recognize online virtual platforms, and they prefer offline content and experiences.

3. What would you think if a coffee shop not only sold coffee but also brought surprises through co-branded events and limited-time promotions with local brands? Blank Street has quickly won the hearts of New York consumers by doing just that. By collaborating with local food brands, designers, and even artists, they regularly launch limited-edition products that attract customers seeking personalization and innovation. This not only enriches their product line but also continuously expands their brand influence. For example, consumers might stumble upon a special breakfast event or discover limited-edition coffee peripherals. Through these co-branded collaborations, Blank Street creates a shopping experience filled with anticipation. When co-branded products are no longer collaborations with big brands but with local community brands, the concept of "Glocalization" once again proves its importance. Compared to widespread publicity, small and refined stores and brands are more trusted and loved by local residents.

4. Blank Street is not just limited to coffee and products; it is also deeply rooted in the community culture. Whenever there are community events, Blank Street's presence can always be found, either by setting up pop-up shops to provide coffee or by actively participating in charity projects, such as supporting school or nonprofit organization events. This community involvement makes the brand not just a coffee supplier but part of the community. Consumers can feel Blank Street's care and responsibility for the local area, and the emotional connection to the brand becomes stronger.

5. At the same time, Blank Street also supports local startups. You might find pastries made by local bakeries or displays of local handcrafted goods in the store. Such cooperation not only provides a platform for startups to showcase their products but also enriches the store's product selection, creating a win-win situation. By helping small businesses, Blank Street solidifies its position in the local community and further enhances its brand influence.

A classic case of omnichannel marketing: Organic combination of online and offline scenarios to enhance consumer brand awareness

Nike launched a nationwide marketing campaign in the UK, focusing on a specific target group: young Londoners. The ad, titled "Nothing Beats a Londoner," showcased different young Londoners engaging in various sports in their own environments while wearing Nike apparel. Due to the inclusion of many London landmarks and typical British humor, every Londoner could find a reflection of themselves in the ad.

Source: Screenshot of Nike event video

Nike used this event to closely associate the brand with London’s unique urban culture. Every scene in the film was set against the backdrop of London's streets, allowing people to feel the diversity and vitality of the city. Different characters represented different corners of the city: skateboarders gliding through the park, street football players dribbling in narrow alleys, runners sprinting under London's iconic skyline. Regardless of how different the scenes were, the core message of the film was the same—no matter where you come from or what you are doing, as a Londoner, your athletic spirit is unbeatable.

Nike's campaign did not rely solely on the ad but also sparked widespread discussion and sharing on social media. On social media, ordinary Londoners participated, sharing their stories of exercising in the city. This real interaction made the brand more than just a provider of sports equipment; it became a symbol of the city's athletic spirit. Through this close integration of online and offline, Nike successfully created a brand image close to London's local culture, delivering the strong message of "Nothing Beats a Londoner."

Nike's local marketing campaign achieved great success, with Nike product searches in London increasing by 93%, and across the UK, by 54%. Why was this campaign so successful? In the past, Nike's ads were aimed at the general public and typically only featured famous athletes. This time, by using "ordinary people" to endorse Nike products and filming on real London streets and sports venues, they successfully attracted Nike’s target group—young people in big cities. In addition, the ad avoided those standard London buildings and scenes, making the marketing more authentic and localized.

For Chinese brands to go abroad to Europe and the U.S., they must leverage “online” but cannot avoid “offline.”

At the beginning of China's reform and opening up, we navigated foreign markets by learning from developed marketing experiences. Today, replicating China's online marketing methods in overseas markets has encountered significant challenges, providing a new perspective brought to us by Douyin's international e-commerce. We may need to adapt to the characteristics of Western markets and focus on doing offline market marketing well. So, the question arises: What areas still need improvement for Chinese brands in offline marketing?

First, localization management is needed. Chinese brands often face challenges related to team issues and insufficient market knowledge when conducting offline marketing in European and American markets. The frequent replacement of local senior executives and lack of harmony within overseas teams often lead to management confusion, directly affecting the brand’s performance in overseas markets. The lack of stable local executives also leads to insufficient research and understanding of the local market, resulting in brand strategies and execution outcomes not meeting expectations in foreign markets.

Second, marketing localization is needed, utilizing digital advantages to enhance the consumer experience. Chinese companies perform exceptionally well in the field of digitalization, particularly in leading the world in e-commerce and online payment technologies. However, Western companies have lagged in this area. For example, many European and American companies are far behind Chinese companies in terms of digital market research and data analysis. This has led to their frequent failures in adapting to market changes and enhancing user experience.

Lastly, brand localization requires attention to a "small and beautiful" business layout, maximizing the consumer experience. In offline marketing, the European and American markets tend to favor the "small and beautiful" strategy. This means that brands must go to great lengths in each advertisement or offline store presentation, pursuing extremely high standards. Even a small-scale store or a simple advertisement will be meticulously crafted, ensuring that the accuracy of the brand story and the visual effects reach the highest standards. European and American consumers often base their expectations of a brand on past quality experiences; they are used to high-standard products and services, which leads to very high expectations for every new brand presentation. Whether it is store design, product display, or advertising creativity, every detail must perfectly align with the brand image and evoke an emotional resonance with consumers. This attitude of striving for perfection is reflected not only in the visual effects but also in the storytelling of the brand, the conveyance of cultural content, and the interaction with consumers. Through this dedication to the "small and beautiful" concept, brands can display unique charm and profound brand culture in the details, standing out in a highly competitive market and winning consumer favor.

Confidence and market understanding: The success of Chinese companies in the domestic market has not fully translated into confidence in overseas markets. Despite strong performance in the Chinese market, Chinese companies often lack sufficient confidence in European and American markets, especially when faced with different market demands and feedback. This lack of confidence makes their expansion into European and American markets more challenging. In addition, the understanding of Chinese companies in the European and American markets is relatively limited, and this lack of mutual understanding further hinders the market expansion of Chinese companies. European and American consumers and companies have low awareness and acceptance of Chinese brands, posing more challenges for Chinese companies when entering these markets.

Trader Joe’s has become the most popular chain supermarket in the U.S. due to its "small and beautiful" strategy.
Source: Getty

Perhaps offline channels are the second growth curve for brands going overseas to Europe and the U.S.
Since 2024, EqualOcean analysts have found that many Chinese brands no longer rely solely on traditional online platforms but have begun to lay out offline markets on a large scale to enhance their global influence. To achieve this goal, companies have increased their marketing investments in overseas markets and continuously explored new market opportunities and growth points. This trend reflects higher expectations and deeper strategic planning by Chinese companies for the global market. According to a survey conducted by EqualOcean, over 74% of the surveyed brands stated that they plan to enter offline channels overseas in the next five years to further expand their market footprint. This means that in addition to online channel layouts, the offline market will also become an important part of the internationalization strategy of Chinese brands.

Building a global brand is not just about occupying the online market, but also establishing a solid brand presence offline. Through offline channels, they can establish more direct and in-depth connections with local consumers, thereby increasing brand awareness and loyalty. This dual strategy of advancing both online and offline signals that Chinese brands are set to make a strong wave in the global market.