The picture is a shop in the shape of a new Louis Vuitton cruise ship in Shanghai, China on June 28th, 2025.
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BEIJING – China’s economic slowdown does not discourage us or European brands from revamping their strategies to reach Chinese shoppers.
Instead, the appeal of the world’s second largest consumer market is forced to adapt businesses in the face of growing competition with local brands.
For Kraft Heinz, having more people buy Ketchup this year means hiring a local agency to hire a local agency. They decorated subway station pillars, mimicked ketchup bottles and promoted seasonings as a fresh twist on popular dishes.
Even with the Shanghai-based marketing company Good Idea Growth Network (GGN), it’s a difficult market to tackle. The agency has witnessed at least five different consumer trends over its 14-year history, founder Stephy Liu said in Mandarin that CNBC translated. “Gameplay continues to change.”
However, GGN was successful even after rejecting an offer to buy from British advertising giant WPP, Liu points out that about half of her clients are foreign brands.
Kraft Heinz has not yet finished its Chinese ketchup campaign, but the company reported second quarter net sales in emerging markets up 4.2% from a year ago, offsetting the decline in North America.
WPP has investigated the potential acquisition of GGN, but ultimately did not move in the process, according to anyone familiar with the discussion.
Kraft Heinz did not immediately respond to requests for comment.
Localized Social Media
From the Starbucks struggle to Lululemon’s success in China, it has become clear that the right combination of localization is essential.
“Among international Chinese brands, winners often devote more than 40% of their revenue to marketing, particularly content and platform first marketing, but they reiterate their products locally based on market data.”
This year, Cook said Under Armour will create products worth less than 100 yuan ($14) to attract large numbers of buyers online, build a fitness community using dedicated users and live streams, and sell more premium products offline.
Doin, a Batedo-owned owner, has been an e-commerce force for the last few years since celebrities and businesses began using the app to handle sales during the pandemic. And by numbers, there is little question that diving into Xiaohongshu and Douyin World is valuable to businesses.
Adapting to its new social commerce ecosystem has been the biggest challenge for brands in the past two years, according to Liu of GGN. “Foreign brands will think, ‘Is this not just Tiktok?’ ”
She warned that success requires complex strategies that involve changing everything from the structure of the team to the types of products being sold. But rewards are important.
“In six months, it helps you sell more than you sold [Alibaba’s] tmall in two years,” Liu said.
Data is power
In addition to social media, a key factor in many companies’ strategies is accessing a horde of data about what Chinese consumers are buying.
Chinese e-commerce platforms, including Alibaba’s Tmall, share far more data about what’s more popular than Amazon.com, said WPIC’s Cooke. In China, “people generally know what their competitors are selling and what they are selling for.”
That granular data allowed the Chinese makeup brand Perfect Deary to succeed by identifying market problems and creating lipsticks aimed at its low-cost segment, Cook said. He pointed out that it also puts pressure on foreign brands to create Chinese-specific products. This has been a major change over the past five years.
China’s e-commerce platform also gives rough figures for the number of orders with several orders per product, while third-party companies like Syntun offer a substantial amount of product rankings and other online sales data for free.
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If Apple’s iPhone 17 was released on September 19th, it was Chinese e-commerce company JD.com that released its sales data for mainland China. The electronics-focused platform announced that in the first minute of the iPhone 17 series, it surpassed the pre-order volume for last year’s iPhone 16 series first day.
Apple’s story highlights how local interest can be rekindled despite losing market share in domestic competition. Some customers in Beijing told CNBC they like the iPhone’s new space orange color, and they are planning to buy their first iPhone of the year since more locals heard about new and attractive features such as larger internal storage.
The Chinese factory quickly jumped into the trend, releasing iPhone cases in similar orange shades, even before the 17 models were released.
“The winning brand was the founder of a local R&D centre and an on-ground product team,” said Ashley Dudarenok, founder of China marketing consultant Chozan. “This allows us to discover trends early, develop products tailored to local needs, and launch them in months rather than years. This is an important departure from the past in which global products are often simply deployed in the Chinese market.”
Cultural connections
With the right data and social media platforms, cultural integration is becoming increasingly important, especially as Chinese brands have managed to steal the history of the craftsmanship of the country.
“The brand is moving beyond a superficial nod to Chinese culture,” Dudalenok said. She pointed out that Loewe partnered with Jade Carving Masters and Burberry worked with bamboo weave artists.
And despite declining sales in China’s luxury markets, LVMH opened an eye-catching boat-shaped store in Shanghai this summer.
In contrast to LVMH’s luggage-style shops in Manhattan, the Shanghai location utilized the history of a Chinese city as a port of entry for international travelers around a century ago.
The new store also captures the roots of the European brand with its handmade travel trunks. This contrasts with the inability of Chinese brands to offer the same emotional appeal. Joe Ngai, chairman of McKinsey’s Greater China, pointed out in the linked post.
“Creating more crossovers between the West and the East as Chinese customers grow in confidence and desire for the local element is one of the unique opportunities for Chinese multinationals.”
– CNBC’s Eunice Yoon contributed to this report.
