The trend cuts across all sectors: on the Chinese domestic market, many domestic brands are overtaking their foreign competitors in terms of popularity with consumers. These include Li-Ning and Erke in the sportswear sector, Midea and Gree in household appliances, and Perfect Diary and Florasis in the cosmetics markets. Some Chinese brands are now growing faster in sales than their comparable foreign competitors.
The rise of domestic brands in China is fueled by two factors. First, the government has long supported domestic brands – both financially and politically. For example, brand building is clearly highlighted in the Made in China 2025 strategy. Second, Chinese brand managers have learned a lot in recent years and now understand consumer preferences much better.
The growth of many Chinese brands can be attributed to the marketing strategy of “short videos + livestreaming + KOL + online sales on multiple channels.” With this integrated marketing, companies effectively communicate with consumers and generate demand. The approach has proven successful in China and pays off not only for consumer brands, but also for B2B brands.
To achieve better results in brand competition with Chinese companies, foreign suppliers in China should pull the same strings and open their own TikTok channel, open their WeChat official account, and expand channels for online sales. That they must also protect their intellectual property in the digital space goes without saying.