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UK retailers must leverage the appeal of ‘Brand Britain’ to entice China’s growing population of wealthy consumers

James Hebbert is UK Managing Ddirector of Hylink, China’s largest independent digital advertising agency

Forget Cyber Monday and Black Friday. China’s Singles Day, the world’s largest shopping festival, which last year saw consumers spend $1bn in first 5 minutes of the sale opening, and a collective $17.8bn in 24 hours, is estimated to eclipse records further and generate more than $21bn in sales when it launches again on 11 November. The China Express Association predicts that the industry will handle more than 1 billion packages this year. This is despite a slow down in China’s economic growth and more cautious consumer spending.

The growing potential for western brands in China is huge. Mobilised by tech innovation in e-commerce and next-generation platforms that are leap-frogging western capabilities, by 2022 the number of Chinese middle class consumers will grow to 550m. Technology is the real enabler here. Alibaba chief, Jack Ma, announced that its platform would evolve to adopt a more social approach where content marketing – including live streaming and the leveraging of influencers – are at the heart of strategy and will be key drivers for sales.

Western brands have long been intrigued by China’s growing dominance within the retail and digital space, but is it best poised to respond to the digital challenge of the fastest growing consumer market in the world? Where the British see risk, the Chinese see opportunity. The next two years of Brexit negotiations will see the UK pursue new trade markets and opportunities, with China representing the most serious force to be reckoned with.

Chinese interest in Britain seems strong. It has already invested £14bn in the UK since the start of 2014, and 30 of the best-performing Chinese companies in the UK alone yielded a total of £9.8bn in revenue, and employed over 20,000 people in Britain in 2015. Its continued relationship with China will prove critical to Britain’s economic growth post-Brexit.

British talent, products and design continue to remain indisputably desirable to international consumers – not least the Chinese. Yet being a strong, ‘heritage’ brand at home is not enough to crack the Chinese market, as stalwart names like Weetabix and Marks & Spencer have shown in their recent failures to penetrate the market. A much deeper understanding of both Chinese culture and consumerism in general in the context of one of the most rapidly growing digital and technology markets in the world is needed to ensure commercial success.

Mobile has been the main catalyst for global growth in online sales and, for China, is one of the key tools for online purchases. Last year’s figures indicated that there were 1.3bn smartphone users in the country and over a third of Chinese consumers make purchases with them – that eclipses the global average of just 13%. Undoubtedly, Singles Day has become somewhat of a revenue-driving phenomenon to the point where Black Friday and Cyber Monday – once the occasion for shopper stampedes and frenzied fisty-cuffs in electrical stores – now seems like a modest pop-to-the-shops.

According to sales analysis by Alibaba, Singles Day sales have exponentially risen over the past seven years since 11/11 was deemed a shopping bonanza for lovelorn singletons. In 2016, sales were up 32% from the previous year alone.

For the British retail scene, already advantaged by its apparent lure and appeal of ‘Brand Britain’, the gigantic commercial opportunity to capitalise on what has essentially become THE biggest global shopping event of year, provides a necessary avenue for bolstering lackluster sales from international markets beyond the isolated shopping peak of Christmas. How might businesses capture the zeitgeist into something that commercially translates and delivers a better bottom line?

Firstly, they must invest in creating a better mobile proposition. Where Alibaba have become true innovators in this space – experimenting with new technologies including augmented reality, AI and virtual reality so browsers may experience a product or immerse themselves in a brand before buying – Britain’s e-commerce offering by comparison falls by the wayside. Yet, there is ample room for improvement.

Some fashion and luxury brands have been proficient at adapting themselves for the digital and mobile shopper, using 360 high-resolution interactive product views and video to showcase their wares. Furthermore, they are brilliant at using the e-commerce space for cross selling. But across other retail categories, there is still much to be learnt.

Before even thinking about adopting the latest technology into a platform to enhance the shopping experience, they must first get the basics right – this means banishing the half-hearted pixelated thumbnail product images and start regarding online propositions seriously as a powerful medium for driving engagement, winning consumer loyalty and delivering sales.

Secondly, it’s clear that British brands intentionally leveraging their provenance to engage with consumers globally, must adopt a new marketing language and approach that not only reflects their unique brand personality, but also captures the spirit and character of the very Britishness that makes them beguiling to both Chinese and other foreign markets.

In terms of brand identity and design, successful British brands currently in China do still rely on visual indicators and stereotypes of what has long been regarded quintessentially British. That said, the speed in which the Chinese market is currently developing, emerging from this is a more discerning and sophisticated Chinese consumer to which British quirks, stoicism, humour and eccentricity married by good old-fashioned craftsmanship is what attracts them to ‘Brand Britain’. For the time being though, British businesses wanting to attract mainstream Chinese consumers must dial up the visual clichés and stereotypes in order to get cut through in a crowded market place. British brands that follow this formula will ultimately be the winners, driving sustainable growth both at home and internationally for many years to come.

Will Singles Day ever catch on in the UK? Muted consumer spend in the face of economic uncertainty post-recession and post-Brexit is something that worries all retailers. Moreover, 11/11 coincides with Armistice Day – a time for commemorating all those who have fallen in the name of this country in the First World War. It’s hard to think whether this national day of mourning can ever, or should ever, coincide with one day of crazy consumer excesses. It might seem vulgar and very unBritish.

Yet, with the proliferation of mobile and the continual refinement of technology, the answer is very probably. If UK retailers and brands want to ride this tide – one that currently represents as $21bn opportunity of which just a small portion could make a meaningful difference to the survival and growth of a business – then they should think carefully about how they might exploit this space for commercial good whilst also stimulating job creation in the UK.

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