This is a summary of a panel discussion broadcasted during KrASIA’s Magnify China 2021 on July 6 and 7. Check out other segments’ recaps here. If you have any inquiries regarding this event, feel free to reach us at [email protected]
The guests for this panel were Emon Wang, general manager of TechCode Accelerator Germany; Wu Shichun, founding partner of Plum Ventures; Chen Tao, CEO and chairman of Bingqing Plum Wine; Karen Lee, founder and CEO of Miss Xi; and Karl Fang, founder and CEO of coco100.
Consumer and retail markets change. That’s one of the many inevitabilities of life. Closely related to our daily lives, the shifts are driven by many factors, ranging from economic trends to individual shopping patterns. According to Wang, a new consumer market is rising in China, with emerging local brands that are highly competitive in terms of product quality, design, and price.
Supply chain and logistics technology also play a keen part in upgrading consumers’ experience with domestic brands. Citing portfolio company Baixiaoti as an example, Wu notes that its delivery cycle has seen a 75% reduction in time to just seven days with flexible supply chain technology. This results in “less inventory and more flexibility to replenish orders,” giving the company a competitive edge. Given the right opportunity, startups can jump in to build their own proprietary systems and technology that only serve to further boost their overall capability. As mentioned by Chen, BingQing Plum Wine has invested in becoming an end-to-end company—from owning its own fruit orchards and developing fermentation and production technology to placing bottles of its wine on customers’ tables.
To foster user loyalty and generate more commercial opportunities, Chinese brands build their own customer communities to cultivate repeat business. Fang noted that on top of relying on members for sales, users’ opinions greatly influence coco100’s line of products. “We will let these people tell us what should the next coco100 product be, listening to what they want, and what we can offer them.” said Fang. Moreover, to encourage return customers, Lee shared that Miss Xi sells consumables that complement their homeware products. For example, they sell various types of tea that work with their water purifiers and milk tea machines.
Choosing the right sales channels is another critical aspect for retail brands. Given that China has one of the most mature e-commerce environments in the world, introducing a new product to the market faces intense competition. It is important to be aware of the most common use case scenarios for each product when considering sales channels. For example, Chen stressed that Chinese consumers are used to drinking alcoholic beverages when eating out, such as in popular hotpot restaurants. However, they discovered that many of these hotpot restaurants only served beer and baijiu, which do not necessarily complement the dining experience. As such, picturing target customers enjoying easy-to-drink plum wine with their hotpot meal led to an opportunity to build a strategic distribution channel for the business.
Successful Chinese brands are also constantly exploring the potential of venturing into the global market. Lee shared her opinion that Chinese brands should not only rely on traditional cost advantages but also leverage the experience of generating a quality user experience and gaining consumer insights. She has created a second D2C brand, Aquibear, for overseas market expansion and plans to launch well-refined appliance products in North America, Europe, and Japan.
At the end of the panel, the guests shared the sentiment that now is the best time for Chinese brands to make big moves. As frontline brand entrepreneurs, they are motivated to improve their customers’ lifestyles and experiences.