Chinese Nationalism and Global Brands
The story of the Chinese economy is as old as time, starting with it being small, then becoming the world’s second-largest economic force. With a population of 1.4 billion and growing, the red dragon holds enough power to intimidate the biggest brands and businesses around the world.
A Government-Controlled Economy
Before the 1990s, the Chinese government used to control the entirety of the country’s commercial activities. While life necessities were considered scarce to most of the population, purchasing power was not determined by mass demand for products and services but by state-sponsored programs and measurements. Therefore, not leaving much space for mass marketing and audience targeting.
China's Great Awakening
At the turn of the century, China took economic reforms to heart, expanding and diversifying its production capabilities, consumption, and market exposure. Consequently, marketing and branding took off, and China emerged as a primary global consumer market, especially for the internet, electronics, clothing, and art industries.
At the time, China copied a lot of business models from Western markets, which was the spark that lit an ever-continuing battle between China and the West over intellectual property rights.
The effects of this awakening could not only be felt within the borders of the Asian giant, but it was able to gradually spread to the rest of the globe with billion-revenue Western companies that were publicly willing to discard China’s human rights violations.
Loyalty Marketing Powerhouse
China’s loyalty marketing, which focuses on attracting existing customers with incentives, was still solid until this point. A great example of this is China’s telecom industry, which has been monopolized by three state-owned companies sharing the same loyalty model for decades, hence failing to grow and expand the industry ever since.
This fragile state of loyalty marketing in China left a vast vacuum that only developed industry players could fill, and Western brands were more than glad to participate. Names like Adidas, Coca-Cola, Apple, and many other American brands were able to secure their place in the consumer psyche of the world’s most populous country. Or did they?
Reclaiming the Market
After a decade-long waging trade conflict with the United States, cybersecurity concerns, and human rights accusations, China has been under fire from governments, international bodies, and people on social media. The Chinese public felt their country was constantly under attack, ending with the recent boycotts of the Beijing Winter Olympics. As a result, Chinese people decided to take a collective stance against all foreign brands, especially those who relented under pressures of disapproving voices in the West, including Nike and Adidas. As a result of this growing shift towards nationalism and away from international brands, local businesses were finally able to overthrow global names for the first time.
Even with the Chinese population holding power in their hands and their growing national pride and unconditional support for the Chinese government, no Western brand is willing to lose its presence in China for obvious economic reasons. Yet, a strong sense of nationalism may not be enough to keep local Chinese brands topping the charts in such an ever-demanding market. After all, maintaining high growth is not as straightforward as building a brand.