RETHINK Retail Editor-in-Chief Julia Raymond spoke with China market strategist Ashley Dudarenok about how life has changed in China post COVID-19.
TRANSCRIPTION:
Julia Raymond:
I’m joined by my very special guest Ashley Galina Dudarenok. You may have heard of her before. She is an expert on all things marketing to the Chinese consumer. She is an entrepreneur, she is a vlogger, in fact she runs the world’s largest vlog about marketing to the Chinese consumer @AshleyTalksChina on YouTube – that’s where you can find her. I highly recommend checking it out.
Julia Raymond:
So you are an expert on all things China, and because the virus originated in China and you guys are sort of past that curve now, and things are slowly becoming more normal or the new normal, what are some of the takeaways for you?
Ashley Dudarenok:
So right now, we see that this particular virus is definitely behaving differently, and businesses here are affected long term. I think for China right now, a lot of manufacturing facilities, a lot of businesses are getting back to operations, but a lot of people start working from home, which was very unusual for Mainland China. Mainland is very digital, right now has become even more digital, people are spending a lot more time watching live streaming videos. Just basically last week for example, 13 mayors of cities in Hubei province were actually live streaming to sell the products from their province, from their city, onto the larger Mainland China audience.
So you see definitely a lot of shifts, and it’s going to be very interesting. What I definitely see is that Mainland Chinese is definitely recovering first, because it just originated in China first, and also very severe measures were taken to contain the virus after the initial first weeks where the time was wasted outside. So it is definitely going to be a very interesting adjustment period, and we’re all looking forward to that.
Julia Raymond:
Are there any other trends you’ve seen retailers pick up that were specifically spurred by the pandemic? Here, I know that we’re doing a lot of click and collect, and curbside pickup, but curbside pickup, is that even a trend really in China? Is that possible with the infrastructure?
Ashley Dudarenok:
What’s happening in China, essentially, they have those contactless delivery service, which is actually, it was stress tested during the epidemic when the whole China was on lockdown, so there are several ways to do that.
There are people that can leave your parcel at location A, and then you go pick it up at whatever time you want. There were also very interesting ways to do this, for example, there was like you park a car next to your apartment building, and then once your delivery comes, you just open the car and the person puts your parcel in there and locks your car.
In some cities, it wasn’t all across China, but in some cities, for instance, platforms like JD, Jingdong, that owned their storages and their logistics operations, they have drones, they have those driverless vehicles, so they were also able to do last mile delivery through those digital drone means. That was very interesting to see.
And while I think in the rest of the world, people still feel that this is so far away, the whole drone thing, and the whole contactless delivery, and the whole robots, and the whole vending machines with all the necessities, in China, once the country stood still, there were vending machines with masks, they were vending machines with rice.
You could buy rice from a vending machine, and you would choose what kind of rice you want. So again, the speed is really something that sets China apart, and of course the, I would say fact that people welcome innovation, that people welcome this digital arm of the world.
Julia Raymond:
Mm-hmm (affirmative) Great answer. And what advice would you give retailers who are looking to redo their strategy in China, knowing that the market might take a dip in other regions, and that’s where they should invest now?
Ashley Dudarenok:
Right. So first of all, you need to really do a consumer study, and that strategy, whatever you’re doing, needs to have a consumer study element, because China is so vast and there’s so many consumer groups, and the idea that you might have about the consumer that you want to reach in China might be totally disconnected with reality. And very often, there are actually companies are operating in the market, let’s say they have distributors in China, and they think they know who is their consumer, because they know who is buying their product right now. But once you start digging deeper, you understand that your distributor actually did not build your brand. They actually did not, they, not misrepresented, but simply put, they did not do anything to formulate your message in the market. So those people that are buying your product might not be your ideal audience.
So definitely do that, and that goes for online surveys. You can do in-depth intercepts, you can do the one-on-one kind of interviews, really in depth. And of course, you need to identify what is your angle right now? What is your unique selling point, preposition or whatever? But in the message, it needs to be a story, and then as a part of that same strategy, you need to have a plan forward. Okay, so 2020, 2021, what am I going to be doing? What are the stages? What are some of the milestones that I want to reach? And essentially, you need to benchmark yourself against competitors, et cetera, et cetera, et cetera. China will never be cheaper, china will never be easier to access, and I’m telling you that with a very clear statement here that China right now is the most expensive advertising marketing world, and it is the most complicated. So the longer you wait, the more expensive it will get.
Julia Raymond:
To hire Bloggers
Ashley Dudarenok:
Yea, it will never be as cheap as now. And right now, by the way, with the whole coronavirus situation, we actually have a lot of eyeballs on digital platforms. So people are there. And a lot of digital platforms are actually trying to help retailers and brands, and they give them extra traffic. So you’re getting a bit of slack here and there, like 10, to 20 to 30% of free traffic. So right now, it’s really a good time, but you need to also approach this market with the right mindset. If you’re going in and you say, “I’m investing 100k US dollars and I want to get 120 out,” that’s never going to happen. In the first eight to 12 months, you really need to work in order to get through that noise, and as I said, for those that do it successfully, the upside is very bright and exciting.