CEO Tips - Going Global Season | How to Make American Consumers Embrace Chinese Products?

The United States has always been the top choice for many enterprises to expand globally. What is the current situation of the US market? What new changes in consumer behavior and users are worthy of attention? How can enterprises make use of popular interest-based e-commerce platforms like TikTok and the resources of internet celebrities? What are the high barriers for offline supermarkets in the US, and how to break through them?

With these questions in mind, the 36Kr "CEO Tips" live stream invited Yang Fei, the co-founder and managing partner of Ocean Stone, and Luo Weizhe, the founder of the MCN agency MEGA, to join and discuss: How to make American consumers embrace Chinese products?

The main focus of this live stream is on the following issues:

1. During this year's Black Friday sales in the US, what interesting changes have the two observed? How to understand brand marketing?
2. The marketing focus in the US market is different from that in China. Are local consumers willing to pay for "low prices"? How to understand the current Generation Z population?
3. In the era of pan-IP, everything can be co-branded. How can overseas enterprises do a good job in IP co-branding? What other practical marketing methods are there in the US?
5. With the adjustment of the tariff policy by the new US president, what impact do the two think this will have on overseas enterprises? How to deal with these changes?
6. For enterprises that are currently expanding globally, can the two give three useful tips?

The following is the conversation between the two guests and 36Kr, and some of the content has been edited and organized:

36Kr: During this year's Black Friday sales in the US, what interesting changes have the two observed? How to understand brand marketing?

Yang Fei: Marketing is a broad topic. Systematically speaking, I recommend reading "Marketing Management" written by Philip Kotler for over five years. In practical operations, it also involves many practical methods. When I was a child, the most impressive advertisement was the repetitive ones like Hengyuanxiang. Although the method is relatively traditional, brainwashing advertisements can indeed increase brand awareness, and this is still common today. In addition to brand awareness, brand reputation is also an important aspect of marketing. For some products with relatively simple functions, such as laundry detergent or facial cleanser, if it can make consumers feel that it works well, that is a success. But if the product has more complex functions and connotations, it is necessary to convey the unique value, brand proposition, and applicable scenarios of the product. These are the information that marketing should convey to consumers.

Many CMO friends ask me a question: Which Chinese brand do you think is a real brand? This question is indeed worth thinking about. In my opinion, there are not many companies that can truly be called brands. If I have to give an example, Moutai should be considered a real brand. A brand needs to have values, a unique competitive advantage, and also needs to do things with a long-term perspective. It needs to be built for ten, twenty, or even thirty years.

The premise of long-term marketing should be the function of the product, followed by values and external manifestations, and then how to reach users more effectively. There is a misunderstanding here. Many entrepreneurs think that as long as they find a celebrity endorsement, they can do a good job in marketing. Today they find Wang Yibo, and tomorrow they find Yi Yangqianxi. When one day the celebrity no longer endorses, the product itself cannot stand on its own, and sales will inevitably drop significantly. Brands like Arc'teryx are successful because they know their positioning, representing both a high-end lifestyle and practical functionality, and differentiating themselves to the extreme. Such brands can accurately find their target consumers and also make users more willing to pay. The basis of all this is to see how deeply the company understands its target users. For example, this year, a brand of straight hair combs has grown very fast. They developed products for black hair and straight hair needs and found representative models for marketing, successfully persuading many locals to buy, and their performance has doubled year after year.

In general, in the early stage, we need to work hard on internal skills and make good products; in the later stage, we need to do a good job in localization, deeply understand the target consumers and conduct precise marketing, so as to stand out in the fierce market competition.

Luo Weizhe: We have come into contact with many leading Chinese brands going global, and we can clearly feel which ones know their target audience and the information they want to convey, and which ones are still exploring. Many Chinese overseas brands are still in the exploration stage. Even if they are already very famous in China, when they arrive overseas, they are not clear about who their user group is, as well as the communication methods, preferences, and types of internet celebrities that users follow.

I previously came into contact with a sub-brand of sweeping robots. They invested a large budget in marketing on TT in the US. But when I asked whether the US internet celebrity circle and some potential users knew this brand, most of them had never heard of it. When doing e-commerce overseas, many brands will emphasize the core selling points, but when displayed on TT videos, these selling points often cannot effectively reach the core users. Most brands are still at this stage, that is, making materials, investing in traffic, and making sales. Of course, there are also some brands that do a better job, such as Sheglam in the beauty and personal care field. They have a very clear understanding of the user group portrait, and the brand image is also very distinct. The cover of each internet celebrity video uses a specific font and style to spread the brand image. Many leading brands in China are also slowly learning these practices.

The marketing momentum of Black Friday in 2023 was very strong. At that time, internet celebrities had no concept of bringing goods, and it was pure replacement and free bringing goods. The first batch of sellers who dared to rush out, held high and hit hard, and quickly formed a team of 200 people and made 20,000 videos. The exposure quickly increased, and they carried out a saturation attack on the platform, and no one could compare. But this year, this set of methods is only applicable for 3 to 6 months. Both internet celebrities and merchants have gained experience, and everyone starts to compare who finds better internet celebrities and who shoots better content. This also has a certain relationship with the platform. Each node has a different gameplay, which is related to the ecology. This wave of Black Friday this year, everyone basically maintains a cooperation volume of 200 - 300 internet celebrities, hoping to produce a hit video from 10 videos. This is the current consensus.

This year, in terms of cooperation with internet celebrities, it is clearly felt that the number of Chinese brands going global has increased, and the number of recognized internet celebrity content has also increased. Everyone's willingness to pay and make orders has also significantly increased.

36Kr: The marketing focus in the US market is different from that in China. Are local consumers willing to pay for "low prices"? How to understand the current Generation Z population?

Yang Fei: This reminds me of a joke told by a Chinese in an American talk show: When an old white American buys an expensive thing, they will show off, like "I spent 20,000 US dollars on this, isn't it great?"; while the Chinese compare who is better at saving money, like "He bought it for 200 yuan, and I bought it for 2 yuan. See how good I am at saving." This is a phenomenon, not entirely accurate, but it also shows American consumerism to some extent. In the central region like Texas, maybe 5,000 US dollars is considered middle class; but in California, one may live a relatively tight life without 8,000 US dollars. The average American, after deducting rent and medical insurance, may have 2,000 - 3,000 US dollars left per month, but they are willing to spend it all in one order.

It is very interesting that Chinese exporters are used to fierce competition and must keep the prices low, but high-unit-price products still have a market in the US. For example, we saw the Ebike track last year. Although some Chinese merchants were desperately lowering the prices, and the main product promoted last year was around $1,799, it has now dropped to $1,299. But in offline bicycle stores, the best-selling product is still the $2,599 one. Because the people who buy these products are generally white middle-class people. They are willing to spend $1,000, $2,000, $3,000 to buy "flashy but not practical" things, but you have to tell them why they should buy it and convince them.

In other words, marketing is to reach users and then tell them why they should buy. The market itself provides different choices for different groups of people. For example, if I can't afford enough food this month, then I will definitely choose the cheaper option. But if I am living a decent life, with a house, a dog, and three children, then I may not buy cheap goods but choose better ones, or at least go to Amazon. There are many counter-intuitive phenomena, such as the gender ratio: When we were doing the kitchenware project before, we found that the proportion of male users who purchased personal blenders on Amazon is quite large, reaching 40%. Therefore, many times, we still need to rely on data and not just decide based on our own assumptions.

Luo Weizhe: The current situation is that the domestic market is saturated with intense competition, and profits are squeezed to the minimum, with only the top players making money. Why do popular products often not last more than three months? Because too many domestic sellers are competing on price. For example, for products of the same quality, everyone buys from Huaqiangbei and 1688. For headphones sold at $24.99, foreigners can also accept this price. Before selling more than 1,000 units, some stores say that they will sell them at $19.99, and they can suddenly sell 3,000 units. However, for overseas consumers, everyone has a different acceptable price. People with a monthly income of $3,000 and $10,000 will definitely buy different things.

What kind of content do people like to watch? It's nothing more than good-looking, fun, beauty, dancing, recognizing one's own value, and the desired lifestyle. Generation Z in the US is already a very mature consumer group, and it has been verified many times on the Youtube platform as early as 2014. Now it's just that the carrier has changed from YouTube to TikTok, or to other platforms like Snapchat, but the people are still the same group. As long as you find the topics that these people like, you can do a good job in marketing.

For example, when selling home treadmills on TikTok, the standard way of selling is to introduce and display the product functions. But what is more attractive? It is to install a Christmas tree at home, turn on Netflix on the TV, light candles, play music, and then start using the treadmill. The usage scenario becomes more concrete, and people will say that this is also the lifestyle I want. This kind of lifestyle marketing is very popular in the US, and there is not much particularly big difference from that in China.

36Kr: In the era of pan-IP, everything can be co-branded. How can overseas enterprises do a good job in IP co-branding? What other practical marketing methods are there in the US?

Yang Fei: First of all, we need to understand why we do IP co-branding. Co-branding itself is a process of exchanging resources and users. The other party will definitely think, why should I co-brand with you? Who are you and what can you bring to me? Can you give me users and enhance my brand image? Or what is your popularity in the US? There is a domestic brand of power tools with great industrial design. They did a co-branding with Supreme, and I quite like it. This kind of co-branding must be based on their own foundation before they can cooperate with another company. Secondly, there is also the issue of the circle. Do people know each other and have a sense of identity? The US is actually also an acquaintance society. When your level is not high enough, what you see are the rigid legal rules. Going further up, it is an acquaintance society. How much are Americans willing to pay to help you, or it depends on how good the relationship between the two of you is, and whether the value you give is sufficient.

One of the key reasons why Chinese brands have difficulty opening up in the US is that Chinese brands do not understand Americans. Chinese brands need to go global, really meet the locals, become good friends with them, and understand each other in order to have the opportunity to achieve in-depth cooperation. Americans are very open in cooperation, but the premise is that you must meet their requirements and be well-prepared. You need to know the rules of the other party and what the other party wants. For example, a friend told me that if you do an event with Disney, each of their characters has a special set of rules. For example, when characters from different worlds meet, Mickey Mouse must be there because it can travel through time and space. The Disney brand has developed to this extent and has a very mature system and worldview. So co-branding is not impossible, but you need to first localize yourself to make it easier to understand how to do it.

When it comes to other marketing methods, in the US now, there is not much big difference from ten years ago. They are still living in a traditional way. It is not that you can just take the latest marketing methods or tools from China and use them there. For example, the e-commerceization of some online platforms this year has not been so smooth. We can try some more localized methods, such as directly distributing flyers at the post office. It is worth mentioning that in addition to the traditional Facebook, Instagram, and Youtube, there are many overlooked but influential niche platforms in the US, such as Reddit for 2C and LinkedIn for 2B, which can comprehensively show the brand's own image. When Americans buy things, especially those with a high decision-making cost, there is a logical line. For example, they see it on Instagram first, then search on Google, watch reviews on Youtube, and place an order on the official website or Amazon. We should try to improve the conversion rate at each link.

Luo Weizhe: First of all, online IP co-branding is generally divided into two categories. One is co-branding with internet celebrities and big stars, which is the most common. The other is co-branding with animation and comic IPs. I think that CASETIFY and MINISO are doing relatively well in going global in China. CASETIFY has many co-branding styles and a mature marketing strategy, and it has advanced from an e-commerce concept to a brand concept. How can e-commerce brands do a good job in IP co-branding? Taking the beauty field in the US as an example, the appeal and influence of star IPs are very strong. If their own products are good, they can build a billion-dollar brand in a short period of time. For example, Huda Beauty and Fenty Beauty achieved a valuation of over one billion in a short period of time.

Secondly, from the perspective of e-commerce, co-branding is more to increase GMV, so the assessment dimension is also biased towards GMV. The starting point is, which brand to co-brand with can make their audience directly make a purchase. It is quite difficult to achieve this result with a small budget. Therefore, the pre-research on different IPs is very important. We need to see whether the fan groups of different IPs have purchasing power.

Finally, I have recently seen some new marketing gameplay in the US. One of the most intuitive feelings is the rise of podcasts. Many enterprises will use podcasts for brand promotion and building a private domain for users. The commercial space for overseas podcasts is very large. Many internet celebrities are invited to offline podcast studios to share and do activities. This is actually a quite advanced gameplay that everyone can understand at a glance. Therefore, when a brand's official website has its own blog and podcast, your marketing methods are already ahead of many of your peers.

36Kr: There is a saying: "American small shops, trapping Chinese bosses." The offline channel has always been a difficulty for Chinese enterprises to enter. In October this year, there was a case of a million GMV in live-streaming e-commerce in the US. Is the online platform a new solution for overseas enterprises? What kinds of enterprises do the two think are suitable for online and offline?

Luo Weizhe: First of all, the gene of the Chinese market has nurtured a relatively mature online e-commerce ecosystem from Tmall and Taobao, while in the US, Amazon has long dominated the market. In addition to Amazon, many users are accustomed to using independent websites. The entire content ecosystem and e-commerce ecosystem in the US, including live-streaming e-commerce, has only developed for two years and is still in a relatively early stage. Recently, there is a data that TikTok achieved a million-dollar GMV in the live-streaming room in October. This is a very good data. Generally speaking, the real-time online number in the live-streaming room is basically below 100, and a single live-streaming GMV of 3,000 to 5,000 US dollars is already considered a medium level, and the top ones are only 10,000 to 20,000 US dollars.

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