Chinese are Fear-Buying, Not In Love With, Western Brands


China has had more than its share of alarming news around product safety and authenticity. Urine in milk powder. Poisonous protein boosting melamine in baby formula, and iconic milk-based sweets. Lead-tainted children’s shoes

It’s unknown how much of the luxury liquor brand Maotai on shelves is fake; one recent sampling found 30 percent, and that was well below other expectations. Meanwhile, the amount of fake high-end Bordeaux is threatening to choke the growth of an entire wine industry in China. Poisoned preserved fruit. Fake rice, made of plastic. Fake contraceptives. In March, even McDonald’s had to apologize for selling expired meat. There has been glow in the dark pork and watermelons injected with artificial ingredients. Other watermelons just explode in the field due to overuse of growth chemicals. The overuse of unnatural growth ingredients has forced the Chinese Olympic team to from refrain from eating meat for fear of testing positive for illegal hormones. Literally every day brings the announcement of a new consumer scam. Oh, and here’s a new one: “Dead crayfish.

In China, the greatest brand asset is authenticity. Simple enough, right? Wrong. Because how does a brand convince consumers of its authenticity when consumers don’t believe the brands’ messages thanks to a barrage of bad press like all of this?[more]

No surprise that numerous surveys have found food safety the top concern amongst Chinese consumers. China Market Research Group found it the top concern in a recent 15-city study. Another survey by the Shanghai Institute of Food and Drug Safety found that 70 percent “are concerned about domestically produced food” and that “only 6.7 percent of people in the eight cities think domestic foods are becoming safer.” (It’s possible 95 percent of that 6.7 percent work for the Shanghai Institute of Food and Drug Safety.)

But it’s not just food brands that are tainted. Every product category is littered with knock-offs.

There is the fake Smart car and even the fake university acceptance letter. Then of course, the mother of all shanzhai, the fake Apple Store, whose counterfeiting was so convincing that its employees thought they were, in fact, working at a real Apple store —  which consumers want given the large number of fake iPhones on the market.

So, when Western media report that China’s middle class is snapping up Western goods, what they mean is that the Chinese consumers who can afford to are spending extra to avoid counterfeits. That is not costumers acting as brand advocates, or out of affinity — it’s fear purchasing. It says less about Western brands than about China’s landscape.

“But trust us,” say the brands. “We’re the real thing.” Sounds exactly like something a fake brand would insist, doesn’t it? (Not to mention echoing Coke’s iconic slogan.) The truth is Chinese consumers are right to be suspicious. Even when one turns to imported goods as a way to avoid low quality domestic products, only to learn that those goods had their import qualifications faked, where is a buyer to turn? Recent examples include the DaVinci luxury “imports” from Italy which turned out to be loaded in Guanzhou. Then there was the Heitiki milk scandal, in which the import from New Zealand turned out to not be licensed for sale in New Zealand.

Brands looking to win trust with consumers should create a stringent, quality control process that’s open to consumers. And it’s not enough to just have them in place, brands must use the quality control process as a selling point. Mengniu, China’s largest dairy brand, makes a big deal that its milk passes nearly 150 various safety procedures, monitoring points and examiners.

Constant communication is also key. A 2011 survey found that 46 percent of consumers had more trust for a brand that reached them, or maintained, a microblog presence on Weibo.

When it comes to success in China for brands, putting forth a quality brand is only half the battle. Building and maintaining trust is a constant imperative for any brand in China. If Western brands make the mistake of passively sitting by and believing Chinese consumers are snapping them up simply because the Chinese deeply “want a little bit of England” they’re poorly positioned to handle a crisis of trust.