As China opens up once again, many global businesses that had postponed or toned down their activities and engagement with this market will start thinking about the future. Here are three things that have changed over the last 3 years

Within the space of a week in December, China relaxed all the COVID restrictions that were in place.

We’re now seeing “business as usual” after almost 3 years of various kinds of abnormality. Many international businesses which stopped focusing on China for the past few years will now put it back on the agenda for both management attention and potential investments and market entry or re-entry.

What are some of the things to be aware of as you (re)engage here?

1. Changes in the marketing and sales ecosystem

China’s unique marketing and sales ecosystem has become even more different over the course of the pandemic. Ecommerce has become more dominant than ever since retail shopping was not an option during the early days of the pandemic and the lockdowns during 2022. Social commerce has become a big part of the ecommerce ecosystem – starting to challenge conventional ecommerce for total volume. A relatively new development that is becoming mainstream is “live” commerce – sales generated during livestreaming events by brands and influencers. All of this makes planning a sales, distribution and trade visibility strategy much harder for brands that have not been operating in this environment.

2. Accessing the consumer can be very easy – or difficult – depending on how you do it

Consumers in China have had a very different discovery process since the early days of the 21st century, since conventional “Brand” marketing here had a relatively short history after the opening up of the market in the ’90s. Ever since the early days of e-commerce here, where small companies could set up a store on Tmall or consumers could sell using WeChat, there has always been a “smart” way of getting to consumers. That trend has continued to accelerate as new forms of social sharing media emerge. In a category as prosaic as packaged meat, for instance, there are brands who use Douyin (Tiktok) very powerfully to drive significant volume, but those same brands in conventional e-commerce or even offline retail may not be anywhere near as dominant.

3. Chinese consumers are re-evaluating their lives and relationship with the rest of the world and brands will play a part in that

We have seen changes in consumer priorities from their online searches in Chinese social media as well as qualitative research. Consumers are re-evaluating their lives, the balance of work and leisure, what they do with their leisure and so on. There is a sense of searching for “escapes” from daily life more frequently, whether real escapes through the form of travel or virtual ones. The interest in foreign travel and culture has also revived and there is a sense that consumers will seek out experiences and brands that give them the satisfaction of living their lives more fully than ever before.

(We had covered some of the trends we anticipate in 2023 in our 2023 Outlook report which you can get here if you haven’t yet seen it.)

If you’re contemplating a market-entry or re-entry in China in 2023 and need some advice on how to go about it, reach out to us at enquiries@searchlightchina.com to set up a call or a meeting