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Features of the Market
The consumption of this kind of products is the sign that Chinese society becomes more and more wealthy. The emergence and growth of the middle class is a good symbol of this change. This category of people should reach approximately 280 million people in 2020.
Inside the Chinese market, French gourmet food is also a source of fascination. Indeed, French agricultural products are very different from Chinese eating habits and they are a symbol of quality. Once they are cooked, these meals become a real please that many consumers want to buy ( foie gras, bass filet, macaron, cannelés Bordelais, etc
You also have Chinese gourmet food and some regions are very famous for that. This is the case of the West Lake restaurant in Changsha, which is one of the biggest restaurants in the world. Chinese gourmet food is very famous because it is diverse and rich. Each region has its specific dish which corresponds to the local weather and the tastes of inhabitants.
This diversity is fed by the interest carried by Chinese people for food. It stems from this the diversity of Chinese cuisine. Tastes and flavors in Chinese gourmet food are very different from the ones we can find in the French gourmet food.
The success for gourmet food can also be explained by the fact that Chinese people care more and more about their health and they favor product of good quality even if it’s more expensive.
Description of Chinese consumers’ behaviors
Most of the clients are from business areas, mainly rich businessmen and women, business manager invite investors and buyers, business lunch or dinner but also men who want to impress girls. These restaurants represent a very good business because the margin is quite high since the clients are very wealthy, so they can spend a huge amount of money to show off. Moreover, expense reports are very common in China, so it swells the benefit of these restaurants. These restaurants are quite impressive because they can be on several floors.
With 1.3 billion inhabitants, China is one of the most interesting marketing regarding export possibilities. Gourmet food represents a big market and a lot of Chinese businessmen realized that this market is very profitable. For example, the country boasts the largest collection of sturgeon species in the world. That also includes breeds that are extinct in the wild. Chinese businessmen enjoy fatty goose liver well known as foie gras. China is a part of the biggest producers of foie gras just behind France and Israel.
Meituan-Dianping: the Chinese’s largest online delivery platform
China is developing at a rapid pace. Even if the Chinese market represents is a large place, new internet start-ups are facing the domination of the biggest ones. Meituan and Dianping are the two leaders of Chinese group buying sites. They merged in 2015 to become “Meituan-Dianping”, creating the largest online-to-offline company in China. That is hugely significant because, at this stage of development, O2O’s trend is the focal point in the Chinese market.
The internet company was founded in 2010 by Wang Xing, and headquartered in Beijing. Meituan offers deals of the day, selling vouchers on local services and entertainment activities. It provides several categories: to eat, to have fun, to book a hotel, to travel, for shopping and for life services. About 35 million people are using its app every day.
Today, Meituan focuses on group deals whereas Dianping focuses on restaurants reviews.
On Dianping, which is very similar to the American company Yelp, you can see the ranking of shops or services you are searching for. The most appreciated ones, rating by users, will appear at the top, while in Meituan it can depend on different features. Among the multiple services of Meituan, its food delivery service “Meituan Waimai” is one of its biggest focus.
- Ride-hailing service by Meituan-dianping
In 2017, the company started its own ride-hailing service through “Meituan Dache” which became the main rival of DiDi, the major ride-sharing in China. These two companies went into an important hunting game, offering a lot of coupons, favorable retail rates, and anything to gain the attention of both consumers buying and merchants selling. They have been burning cash on this competition to get the maximum of consumers.
In April this year, Meituan-Dianping acquired China’s largest bicycle-sharing system Mobike, spending US$ 2.7billion.
Companies in China are involving a lot of businesses because they can bring them, new users. Then, with the increase of their general user database, they can guide them into their other activities. For example, in the actual advertisement of Meituan, it proposes that if you took Meituan’s ride-hailing service to go to the cinema, then you can get the reduction of 20 or 30 Yuan on your cinema ticket.
Some types of services are using social media platforms to connect with consumers because it allows getting the most out of online consumers.
What should you do to be successful?
Therefore there are a lot of opportunities if you want to invest or start a business in gourmet foreign products. In general, there are two common ways to enter the Chinese market. Either you export product or you establish an enterprise in China starting from marketing facilities to production in China. In both cases, before starting your business you should do a survey about consumers’ habits and demands. If Chinese consumers accept the products, then the production can be local in order to make the product more affordable.
If you want to export food in China you might face, some difficulties because of the regulation in the food industry. It might be easier to find a local producer who’s familiar with the regulatory environment.
Opportunities in the Market
Before starting your business, you should think about a specific product that you want to sell in China or specific cuisine if you want to open a restaurant. Because the market is very wide you need to target a specific class even if obviously it will be mainly the middle or the upper class. It’s also important to think about the production and the distribution of your product. Don’t forget that China’s e-commerce platform is very important. It’s better sometimes to get the third part because procedures are not always easy.
Having a good image in the eyes of consumers especially for Chinese people is very essential to success in China. For luxury products such as gourmet food, it can be useful to establish a PR strategy and getting close to people who have influence in the food industry. Good branding will permit you to build a reliable reputation online and offline.
The online-to-offline war in China
This topic is an important focus in China. Every big and powerful china’s consumer internet companies are shaking their team to go further in the O2O process, which aims to help the development of physical retailers, to reach new customers via the internet (and the mobile). We can define O2O as a shorthand for strategies to get more online shoppers into brick-and-mortar businesses. In fact today, businesses that cannot pack up and ship out their products and services are cut out of this whole process.
Meituan’s platform is also working on O2O, connecting over 240 million consumers and 5 million local merchants via a comprehensive array of e-commerce services and products. Meituan Dache and Meituan Waimai both are part of their O2O strategy.
Dianping’s main lack remains in its capacity to give a real experience to its consumers. They often go on Dianping’s platform to check for information about a place and then move away. Even if this app is very popular among Chinese consumers, using as their favorite tool for restaurants reviews, Dianping hasn’t found yet the most effective way for its development, way that would allow it to close the loop and form a real relationship with its customer.
Investors also pour money into China’s booming online-to-offline space, where consumers use their smartphone to book offline services ranging from restaurants to movie tickets to other leisure deals.
We can help you: Restaurant Marketing
You have probably noticed the need for an online presence to do business in China. In this digitalized society, consumers are very connected. They often use at first the internet to search for what they want and then come to offline retailer’s shops. It is particularly the case for restaurants. Chinese consumers first check on Dianping, then they make their choice. Whether you want to develop your delivery service or to boost your restaurant’s activity in China, you will have to work with this kind of app.
Also, as we said before, the social media platform is very useful to connect with consumers. The most powerful tool we have to introduce here is WeChat. It is the most popular app for communication in China and it has developed a lot of features to suit businesses’ need. Companies are using WeChat to stay in touch with existing customers and gain repeat business.
Wechat has reached 1 billion monthly active users this year. Its huge user database represents a veritable goldmine for a lot of internet companies. Meituan also has settled in WeChat’s platform. Today we can access to Meituan via the WeChat wallet section.
At this stage of development, China has a lot of booming industries. This is a promising and huge market with its own culture and way to function. It is important to ensure an online presence and to have knowledge about the Chinese customer’s behaviors.
Want to start a business in China? Do not hesitate to contact us. Gentlemen Marketing Agency is specialized in digital marketing in the Chinese market. We have developed many successful projects because we know how to effectively promote your business in China by using the latest digital tools.
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