After setbacks for brands such as Home Depot, Best Buy and Barbie, which have closed stores or withdrawn after failing to win over Chinese consumers, the lessons of Huai Hai Road are germane.
“Anybody who comes into this market and thinks they can just plant their brand and let it grow will be sadly mistaken,” Tom Doctoroff, north Asia chief executive of JWT, the advertising agency, said.
“Any [foreign] business model needs to be brought into alignment with Chinese cultural and consumer imperatives.”
He points to Pizza Hut, Starbucks and Haagen-Dazs as the gold standard for foreign brand success in China. They took products alien to Chinese tastes and made them popular.
Pizza Hut and KFC, both owned by Yum Brands, localised their menu.
But adjusting to local tastes is not just about food, Doctoroff says. Pizza Hut, Starbucks and Haagen-Dazs all focused on eat-in, rather than carry-out, in China. “Barbie just got plonked down in China.”
Even luxury goods companies have had to adapt their model, he says. The Chinese market for luxury goods is “broad and shallow”.
Getting your brand right in China is tough – Tom Doctoroff
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Tom Doctoroff by Fantake via Flickr