Brands are a hot topic in China

The Brand conference between China and the three countries of the DACH region is taking place in Hamburg against the background that brands are highly coveted by consumers in China and at the same time Chinese companies have invested in Western brand companies, and Prof. Zhang Yiping is answering three questions on the subject of brands for MK readers.MK How is brand affinity developing in China, especially for high-end luxury and luxury goods? Consumer goods?ZHANG YIPING In the highly digitalized and interactive Chinese market, traditional, mainly advertising-based brand communication is on the verge of collapse. The rapid decline of advertising agencies goes hand in hand with the rise of digital and experience-based marketing. As a result, brand affinity needs to be constantly maintained and nurtured through consumer interaction, not one-way advertising or branding. Luxury and consumer goods are particularly affected by this, as they target premium consumers, according to the study conducted by Tencent and SEECO in 2017. "China Luxury Online Consumption White Paper"48% of consumers under the age of 30 are considered premium consumers with 34% of national disposable income. This is quite remarkable, as in previous generations premium consumers were typically 30 years or older. Moreover, the trend is accelerating: the same study predicts that Millennials and Generation Z will manage over 50% of disposable income in the future, with these younger generations relying on their digital search skills and the rating systems of major online shopping platforms. As a result, their consumption decisions are becoming increasingly rational. For them, a good brand story is nowhere near as convincing as high product quality. They are generally willing to pay a high price, but only if the quality justifies this price. With this in mind, they combine various digital tools and platforms to collect and analyze information. At the same time, they appreciate offline experience of a brand's quality and service orientation. The end result is the identification of the products with the best cost-benefit ratio, and premium brands have adapted their marketing strategies to this development. Premium products and services - regardless of their quality - should now be able to be seen, felt, smelled and tried out, in short: experienced. These experiences should be posted as feedback, answered and discussed in order to generate as much word of mouth as possible, and never before has a closed circle of online and offline experiences been so important for maintaining brand affinity. However, the associated costs are not necessarily higher than in the advertising era.MK What opportunities do branded goods manufacturers from the DACH region have in China?ZHANG YIPING They already have inherent advantages in the Chinese market. The DACH region is perceived as a source of high-quality products and services. Chinese consumers believe that they are well made, well designed, reliable, durable and safe. In view of this prevailing view, even young companies from the DACH region have a good chance of market success. This is made easier by the fact that Chinese consumers not only buy DACH products in physical stores, but also like to order them via online shopping platforms such as Amazon and Tmall, despite the high import dutiesMK What does it take to appeal to the Chinese for such branded products?ZHANG YIPING In the Chinese market for premium products, the brands concerned are increasingly influenced by younger consumers with digital know-how. The more their consumption power grows, the greater the pressure on premium brands to innovate faster, which means that brands need to build a digital business and communicate with consumers via digital channels when they enter the market. In addition to social media and e-commerce channels, they need to offer a unique experience wherever possible. This should be multi-dimensional: In the vertical dimension, recommendations from key influencers and marketplaces such as Farfetch set the trends. In the horizontal dimension, exchanges in small groups of consumers influence your own direction and subsequent engagement. In the inward dimension, individual purchasing decisions and user experiences confirm (or refute) assumptions about the quality of the brand and the appropriate level of loyalty.MarTech, i.e. marketing technology management combined with big data and artificial intelligence, makes such a relationship between consumers and brands possible. In China, MarTech is already replacing traditional AdTech, which is based on precise targeting and programmatic buying decisions. MarTech is being developed from the brand's perspective. It helps manage every stage of the customer journey by improving cross-screen and cross-point interactions with consumers through social media, apps, emails and websites. MarTech supports brands in creating their own "traffic pool" by refining customer care. In this way, consumers become communicators, users become active experiencers and viewers become creatives. "natural" advantages in consumer perception. At the same time, however, they must keep an eye on the rapid changes in the Chinese market. The brand loyalty of the Chinese depends less and less on advertising. Of course, international competition is growing day by day, but in a market the size of China, every brand has a chance. This is especially true for those with innovative features and traditionally good quality. About Zhang YipingZhang Yiping is Vice Dean of the Sino-German Institute of Design and Communication at Zhejiang Wanli University and Professor at the Brand Academy - College of Design and Communication. He has worked as a digital media designer and has more than 15 years of experience in intercultural higher education. He has also conducted research on design and communication at various German and Chinese universities and is editor-in-chief of "Interchange - The Journal of Transcultural Design Education".About the 1st DACHINA Brand DialogueThe 1st DACHINA Brand Dialogue (www.dachinamarkendialog.org) will take place on September 5 at the Grand Elysée Hotel in Hamburg. It is organized by DACHINA interchange (www.dachinainterchange.org), Brand Academy - Hochschule für Design und Kommunikation (www.brand-acad.de) and China Central Television (www.cctv.com). The Brand Dialogue offers a unique new platform where a hand-picked expert audience meets top-class speakers from the DACH region and China to exchange concrete experiences and forward-looking concepts in brand management in an atmosphere of open-mindedness.All surplus income generated by the event - including and above all from sponsorships - will benefit promising young talents in the form of scholarships for brand-related master's programs at the Brand Academy - University of Design and Communication in Hamburg. The scholarship holders are selected by the sponsors themselves and participation is free of charge, but is exclusively at the invitation of the organizers.