A new study by WE Red Bridge looking at brand purpose in China has found that the shifting power dynamic between brands and consumers is more apparent in China, where consumers’ expectations are at their highest, public sentiment at its most volatile, and customer loyalty still fleeting.
While the China market has been known to be pragmatic – more so than any other, globally – it is also aligned with the West when it comes to expectations for brands to be ethical with their data, take a stance on social issues, and play a wider role in society.
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But where consumers in other markets take a broader world view (sustainability, inclusivity, etc), Chinese consumers expect brands to focus locally and prioritise China’s development. This means brands must look to define their role domestically and to build new levels of trust and respect with Chinese stakeholders.
WE's study does not mention specific causes related to the data. But PRWeek Asia can't help but reference the tensions between mainland China and Hong Kong that have brought to surface many controversies, and many blow-ups on social media, sometimes even over a single Tweet. Brands such as Nike, Tiffany, the NBA, Vans, and Cathay Pacific have landed in hot water after appearing to support or being associated with the Hong Kong pro-democracy movement.
One of the most high-profile cases was Apple’s where the brand removed an app that allowed Hong Kong protesters to organise and track police movements. In this case, the brand appeared as pro-Beijing and found itself at the centre of a fierce political debate.
Whichever way brands swing, WE’s study found that 49 per cent of Chinese respondents said brands should focus on making local communities better (nine points higher than the global average), and 39 per cent felt they should focus on both local communities and global issues (14 points lower than the global average).
Basically, consumers are urging brands to provide stability in uncertain times, be accountable for their actions, and play a greater role in the advancement of society.
Overall, 83 per cent of Chinese respondents expect brands to take a stand on important issues (nine points higher than the global average). However, 94 per cent of consumers say they would shame a brand if they perceive them to be stepping out of line, even if they love the industry or organisation.
Furthermore, 72 per cent of business professionals agree that current political and social trends are pushing brands and organisations to define their purpose; 89 per cent say it is an urgent task to have a clearly defined purpose; and 100 per cent of business professionals say it is important for a company to own a purpose.
"I think our younger generation definitely care about purpose," said Jia Jun Li, chief win-win officer at Chinese media platform Bottle Dream.
"They would consider whether a company is harming society and question why I would choose one company over another. So as younger generations take over the reins to run organisations, the understanding and implementation of purpose can definitely increase."
Purpose not as easy as it sounds
Despite it being clear that brand purpose is vital in China, there are unique barriers there, especially when it comes to execution of purpose. For instance, an obvious reality is that China’s economic ascendancy is still very new, and until recently, consumers were more focused on financial advancement and the acquisition of products and services that enhanced their individual lives, rather than society as a whole.
This means that contribution to the wider good and the values of an organisation were not always top of mind when it came to purchasing decisions, and nor were they primary considerations for most business leaders.
However, with more signs pointing towards the demand for brand purpose and Chinese consumers becoming more informed, this is changing. But this change in expectation points to another challenge: a lack of understanding about what purpose is and what it means to be a purpose-led organisation.
"I often found it is hard for businesses to understand that their core business can make a better world and conquer current social challenges; they often think donations and charity would be enough to meet the expectations," said Bottle Dream’s Li.
Furthermore, brands struggle with balancing shareholder value and societal impact. While the majority (73 per cent) of business professionals in the study agreed that purpose will become as important as financial performance for brands, more than half (60 per cent) responded that purpose will not be prioritised if their bottom lines are compromised.
"I think in China, purpose is still commoditised," said Emmanuel Dean, CEO and co-founder of Boomi, a Shanghai-based sustainable solutions start-up.
"For example, hotels only became interested in purchasing our bamboo brushes, not because they are sustainable, but because the government banned plastic toiletries in Shanghai. The new regulation is the trigger rather than their own initiative, making it not 100 per cent genuine."
Not all brands manage to straddle between purpose and commercialisation, but Tesla is a good case study. The brand’s mission has always been clear: to create an electric car that makes its customers feel like they do not need to compromise on style or speed. While this mission was not something that was easy for Tesla to localise in China, recent events see this changing.
The announcement of its Gigafactory 3 opening in Shanghai and the creation of its first made-in-China cars (Model 3 and Model Y) is perceived to help transform China into a more sustainable market thanks to its renewable energy. On top of that, Tesla’s work with the local government in a mission to upgrade the country’s automobile industry gives it a competitive edge there.
Starbucks is another example. The company’s global move to replace all plastic straws with recyclable straw-less lids was introduced in China seamlessly. And locally, Starbucks in China amassed over 700,000 hours of community service while also supporting local farmers.
Using those examples, it’s clear that Chinese consumers expect a well-defined purpose, but they want it fitted to domestic needs. Global purpose campaigns carelessly executed in China won’t translate to loyalty and brand affinity; but will rather weaken the chances of a brand standing out in an already impulsive market.
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