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Home Market Research Markets

U.S., Europe brands take on the Chinese consumer

by TheAdviserMagazine
3 weeks ago
in Markets
Reading Time: 5 mins read
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U.S., Europe brands take on the Chinese consumer
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Pictured here is Louis Vuitton’s new cruise ship-shaped store in Shanghai, China, on June 28, 2025.

Bloomberg | Bloomberg | Getty Images

BEIJING — China’s economic slowdown isn’t discouraging U.S. and European brands from revamping their strategies to reach Chinese shoppers.

Instead, the allure of the world’s second-largest consumer market is forcing companies to adapt in the face of growing competition from local brands.

In the case of Kraft Heinz, getting more people in China to buy ketchup this year also meant hiring a local agency to help create catchy campaigns — decorating subway station columns to mimic ketchup bottles and promoting the condiment as a fresh twist on a popular dish: stir-fried eggs and tomatoes.

It’s a hard market to tackle, even for Shanghai-based marketing firm Good Idea Growth Network (GGN). The agency has witnessed at least five different waves of consumer trends in its 14-year history, founder Stephy Liu, said in Mandarin, translated by CNBC. “The gameplay keeps on changing.”

But GGN has succeeded even after rejecting an acquisition offer from British advertising giant WPP, Liu said, noting that about half of her clients are foreign brands.

While Kraft Heinz isn’t done with its China ketchup campaign yet, the company reported second-quarter net sales in emerging markets climbed by 4.2% from a year ago, helping offset declines in North America.

WPP explored a potential acquisition of GGN but did not end up going far in the process, according to a person familiar with the discussions.

Kraft Heinz did not immediately respond to requests for comment.

Localized social media

From Starbucks’ struggles to Lululemon’s successes in China, it’s become clear that the right mix of localization is essential.

“Among international brands in China, the winners are often dedicating more than 40% of revenue to marketing, especially content and platform-first marketing, while also iterating products locally based on market data,” said Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, which helps foreign brands sell in China.

This year, Cooke said that Under Armour has created products under 100 yuan ($14) in order to attract a mass of buyers online, while using livestreams with dedicated users to then build fitness communities and sell more premium products offline.

ByteDance-owned Douyin has become an e-commerce force in the last few years since celebrities and companies started using the app for livestreaming sales during the pandemic. And by the numbers, there’s little question that jumping into the Xiaohongshu and Douyin world is worthwhile for businesses.

Adapting to that new social commerce ecosystem has become the biggest challenge for brands in the last two years, GGN’s Liu said. “Foreign brands will think, ‘Isn’t this just TikTok?'”

She warned that success requires a complex strategy that can involve changing everything from how a team is structured to the kinds of products sold. But the payoff is significant.

“In half a year, it can help you sell more than you sold on [Alibaba‘s] Tmall in two years,” Liu said.

Data is power

In addition to social media, a critical factor in many companies’ strategies is access to hordes of data on what consumers in China are buying.

Chinese e-commerce platforms, including Alibaba’s Tmall, share far more data on what’s popular than Amazon.com does, WPIC’s Cooke said. In China, “people generally know what their competitors are selling and what they’re selling for.”

With that granular data, Chinese makeup brand Perfect Diary was able to succeed by identifying a market pain point and creating a lipstick targeted at that lower price segment, Cooke said. He noted that’s pressured foreign brands to create China-specific products as well, a big shift over the last five years.

E-commerce platforms in China also often show rough figures on how many orders were placed per product, while third-party companies such as Syntun offer significant amounts of product rankings and other online sales data for free.

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In the case of Apple‘s iPhone 17 launch on Sept. 19, it was Chinese e-commerce company JD.com that released sales data for mainland China. The electronics-focused platform announced that the first minute of iPhone 17 series preorders surpassed the first-day preorder volume of last year’s iPhone 16 series.

Apple’s story also underscores how it’s possible to reignite local interest despite losing market share to domestic competition. Some customers in Beijing told CNBC that they liked the iPhone’s new cosmic orange color, and that more locals intended to buy their first iPhone this year since they’d heard about new attractive features such as larger internal storage.

China’s factories were quick to jump on the trend, releasing iPhone cases with a similar orange hue even before the 17 model was out.

“Winning brands are those that have established local R&D centers and on-the-ground product teams,” said Ashley Dudarenok, founder of ChoZan, a China marketing consultancy. “This allows them to spot trends early, develop products tailored to local needs, and launch them in months, not years. This is a significant departure from the past, where global products were often simply rolled out in the Chinese market.”

Cultural connection

Even with the right data and social media platforms, cultural integration is becoming increasingly important, especially as Chinese brands find success in tapping the country’s own history of artisanal craftsmanship.

“Brands are moving beyond superficial nods to Chinese culture,” Dudarenok said. She pointed out that Loewe partnered with jade carving masters, while Burberry teamed up with bamboo-weaving artists.

And despite declining sales in China’s luxury market, LVMH this summer opened an eye-catching ship-shaped store in Shanghai — immediately generating much local buzz.

In contrast to LVMH’s luggage-shaped store in Manhattan, the Shanghai location taps into the Chinese city’s history as a port of entry for international travelers to Asia roughly a century ago.

The new store also captures the European brand’s roots in hand-crafted travel trunks — which contrasts with Chinese brands’ inability to offer the same emotional appeal, Joe Ngai, chairman of greater China at McKinsey, pointed out in a LinkedIn post.

“As Chinese customers grow in their confidence and desire for local elements,” he said, “creating more crossovers between West and East is one of the unique opportunities for multinationals in China.”

— CNBC’s Eunice Yoon contributed to this report.



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