Future trends of Chinese brands abroad in 2022

When it comes to popular fashion in the United States, which brand in your mind is the biggest retailer? H&M? Zara? Or forever 21? What might surprise you is that in 2021 the most popular brand that overtook all of its competitors with 28% market share in fast fashion sales is Shein, a Chinese e-commerce company founded in 2008. In 2020, Shein completed her Series E funding with a corporate valuation of $ 15 billion and has nearly 300 million fans on various social media platforms.

Shein’s success is no accident. In the context of the global pandemic, the international demand for e-commerce and imported Chinese products has increased rapidly. Even though total world merchandise trade declined significantly in 2020, China’s cross-border e-commerce export growth rate increased by 40%. For anyone who is familiar with China’s cross-border market, it should be noted that there are many Chinese brands that market their e-commerce products to all over the world. For example, most people don’t know that TikTok, owned by ByteDance, has overtaken Facebook to become the most downloaded app. China’s e-commerce giants such as Alibaba, JD, Anker, and Didi are all growing their businesses globally at an unprecedented rate. From mobile commerce and social media to live streaming and digital wallets, China’s innovation ecosystem is currently at a unique inflection point and is the first undeniable trend for 2022.

The second trend is the growing maturity of brand localization. December 1st, 2021, the Chinese Brands Overseas Summit Forum was hosted online and localization has become a ubiquitous slogan. It was agreed during the forum that defining the brand image and localizing products with branding strategies to align with the culture of the target audience is the key to the success of Chinese brands abroad. Using the power of e-commerce, Chinese brands are opening up a new market with localization. As a brand with the most traditional Chinese style, Florasis, a national cosmetics brand launched in 2017, has found its place in the global market, especially in Western Europe, North America, Oceania and Russia. In 2020, Florasis planned to launch a new product line abroad. To localize its products, Florasis has used the power of social media and marketing influencers. Prior to the launch, he targeted @meredithduxbury, a micro-TikTok influencer with 200,000 followers, to do a makeup tutorial video with Florasis products. The first single video went viral quickly and reached content exposure to over 5 million people. The influencer (@meredithduxbury) has gone viral with his products and has now reached over 14 million followers. The success of Florasis and other Chinese brands has demonstrated how local Chinese brands can gain a foothold in the US market in a relatively short time frame despite the tumultuous relationship between Washington and Beijing.

While Florasis is not a giant Chinese e-commerce company, its overseas success is a great case study. Its success highlights the future trend that localized marketing and operations, coupled with the ability to navigate the regulatory environment of host countries, will be a core strategy for Chinese brands striving to gain a foothold in the world. ‘foreigner.

The third trend that we observe is the shift in modus operandi. In 2021, China improved the regulation of operations by encouraging domestic companies that expand overseas to follow a series of domestic regulations and apply for local registration. Since the end of 2020. The subsequent suspension of the rights of Ant Financial Group

The IPO and a fundamental restructuring of the company also followed. Meanwhile, shares of Didi Global Inc. fell to an all-time high after also violating the Chinese regulatory environment. , which sparked Republican Senator Marco Rubio’s suggestion that President Joe Biden should ban TikTok in the United States. After learning about government action with industry giants and China-U.S. Trade tensions, Chinese brands looking for overseas business are looking for different ways of operating to avoid new regulatory entanglements. For example, ByteDance tried to decentralize its global activities. Now ByteDance’s new CEO Liang Rubo and a few other executives operate from offices in Singapore and Los Angeles. Meanwhile, although Douyin is nationally controlled, its other globalized businesses such as TikTok have been registered as a Cayman Islands holding company. Going forward, Chinese companies and their foreign brands will seek to evolve in ways that better comply with regulatory bodies, protect consumer data, and take advantage of technology and social media platforms to improve scalability throughout. reducing costs.

Special thanks to Kexin Bian whose editorial and research skills contributed significantly to this article.

Earl Carr is the Chief Global Strategist at New York-based Pivotal Advisors. His responsibilities include working closely with the CEO and President of the company to manage the global research team and to develop and execute the mandate of global thought leadership and cross-border business development of the company. Earl is the editor of the recent book, “From Trump to Biden and Beyond: Reimagining US-China Relations” Palgrave-Macmillan Press, September 2021.

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