Brands’ overseas breakthrough: Don’t compete on price, compete on value

In the current new cycle of global economic development, how can Chinese brands achieve high growth in overseas markets through industries such as cross-border e-commerce, and how can they avoid falling into the trap of price wars and instead enhance brand value? This article is a valuable guide for Chinese entrepreneurs and brand managers who hope to succeed in the global market.

In the new cycle of global economic development, Chinese brands expanding into overseas markets is a rare high-growth track.

Taking the cross-border e-commerce industry as an example, the latest data released by the General Administration of Customs show that my country's cross-border e-commerce imports and exports reached 1.22 trillion yuan in the first half of this year, a year-on-year increase of 10.5%, 4.4 percentage points higher than the overall growth rate of my country's foreign trade in the same period.

If we extend the timeline, we can see some trend changes more clearly. According to the data from the General Administration of Customs, my country's cross-border e-commerce imports and exports will increase from 1.06 trillion yuan in 2018 to 2.38 trillion yuan in 2023, a 1.2-fold increase in volume over the past five years. This means that in the complex and changing international trade environment, my country's foreign trade still has resilience and vitality.

Nowadays, foreign consumers can wear the latest fashion from China in just two or three days by simply clicking the mouse on e-commerce platforms; while browsing short videos on their mobile phones, they can also experience the fun of "buying the same item with one click".

Chinese brands are beginning to enter the world stage at an unprecedented speed. It is becoming a reality that consumers can "buy globally" without leaving their homes, and companies can "sell globally" based in China.

1. “If you go out to sea recklessly, you will be eliminated.”

"Striving to cross, striving to cross, startling a flock of gulls and herons." The scenes in ancient poems are becoming a reality, and the companies and brands that are striving forward have stirred up a tide of going overseas. According to customs statistics, in the first eight months of this year, there were 630,000 foreign trade operators in my country with import and export performance, an increase of 8.8% year-on-year. However, in our opinion, being swept away by the tide of the times and going overseas in a panic may lead to the elimination of companies. Because most companies face many problems when going overseas, such as geopolitics, internal competition among peers, and imbalances between regions and categories. Taking internal competition among peers as an example, the "price war" routine has appeared more and more frequently overseas. However, the protracted price war has caused the entire industry to pay a heavy price. The best example is the export of Chinese motorcycles to Vietnam. In the 1990s, when Chinese motorcycle companies first arrived in Vietnam, they used the "price war" strategy to quickly seize the market share that originally belonged to Japanese motorcycles. By 1999, the market share of Japanese brands had fallen from nearly 90% to only 20%. I thought I could make a lot of money after defeating my competitors, but I didn’t expect that major manufacturers would offer bigger discounts than before, and the prices would drop day by day. Later, they began to cut corners and use low-quality parts, and their reputation plummeted. In the end, they destroyed their own brand, giving other competitors a chance to make a comeback. After a price war, Chinese companies lost profits, damaged their brands, and lost their style. The original intention of going overseas to seek growth turned into a "thankless" failure.

The same is true in other fields. In recent years, many cross-border e-commerce platforms have launched "low-price" actions. New energy vehicle companies have also begun to reduce prices in Southeast Asian countries represented by Thailand. In the field of home appliances, some brands of 1.5-horsepower first-level energy-efficient inverter air conditioners have been reduced to RMB 1,600-1,800, close to the cost limit... These actions seem to give consumers a bargain, but they have greatly damaged the image of Chinese brands overseas. Although more users and markets have been gained in the short term, in the long run, "low grain prices hurt farmers", and blindly low prices will affect the health of the entire ecological chain.

2. Brand is the ultimate “moat” of a product.

We are not resisting "low prices". On the contrary, as a business competition strategy, "price reduction and discount" may never disappear. However, if enterprises want to achieve long-term development in overseas markets, they must work hard on their brands.

Why is branding important?

Because brand is an effective way to cultivate customer loyalty, it is also one of the ways to increase prices to obtain higher profits, and it is also a sure-fire way for companies to stand out when faced with a wide range of similar products.

If you want to build a good brand, there is actually a "methodology". Simply put, you need to do three things well, namely positioning, pricing, and definition. Compared with companies exploring and trialing on their own, it is a more efficient way to learn from "predecessors" who have experience in going overseas. The series of short videos "Sailor Plan" created by Amazon Advertising and Amazon Global Store is dedicated to recording the overseas journey of Chinese brands. It can be said to be a growth record manual for brands going overseas.

In the first three seasons of "Sailor Plan", 19 real cases of Chinese brands going global have been presented. For example, Anker Innovations, a brand in the second season of "Sailor Plan", successfully won the "Treasure of the Town" on the first day of Prime Membership Day in 2022, based on the carefully built brand flagship store, posts and optimized advertising strategies in the Amazon Mall. With the dual blessing of huge traffic and product halo, the brand's word-of-mouth effect is naturally infinitely magnified.

On August 28 this year, the fourth season of "Sailor Plan" will return, and will explore categories that have not been explored in the first three seasons, such as automotive accessories, cycling supplies, portable printers, toys, etc., to truly record more Chinese brands' overseas stories and point the way for more companies and brands.

Specifically, this season of "Sailor Plan" will share real cases of how 7 overseas companies increased their brand awareness.

Take the cycling outdoor product brand ROCKBROS as an example. During this year's Prime Day, ROCKBROS changed its previous method of mainly displaying pictures and chose video display to convey more intuitive usage scenarios and product effects. Data shows that during Prime Day, ROCKBROS increased display promotion and brand promotion efforts, helping the brand's new customer reach rate increase by 100%.

AstroAI, an automotive lifestyle brand, conducted a media mix analysis through Amazon Marketing Cloud before launching its ads. It increased its DSP investment on the basis of product promotion ads, helping to increase the brand’s search volume by 300%.

These practical cases are like lighthouses, providing a valuable marketing strategy for Chinese companies going overseas.

What is more noteworthy is that the fourth season of "Sailor Plan" is not only a recorder of brand stories, but also a sharer of brand marketing wisdom.

It deeply analyzes how Chinese companies going overseas can cleverly use Amazon advertising to balance sales growth and brand building, gain insights into overseas marketing trends, develop precise advertising strategies, increase brand awareness, and effectively reach consumers when facing challenges in the global marketing environment. It also uses mature branding ideas to promote the transformation from "Made in China" to "Global Brand" through continuous cooperation with brands.

The four seasons of "Sailor Plan" that have been aired are progressive and interconnected, forming a guide for people going overseas that is "easy to understand at a glance and effective at use", which will escort more companies going overseas on their journey to brand globalization.

3. Leave professional matters to professionals

As the overseas expansion progresses, many professional teams have emerged in various fields. New business forms that are specialized, localized, and refined have emerged in every link, including manufacturing, channels, brands, payments, and services.

For brands going overseas, finding professional people to handle professional matters is the key to quickly breaking out of the circle.

Based on decades of user consumption data and brand marketing experience, Amazon Advertising has honed a set of "nanny-style" service solutions.

For example, when brands are “going global”, they will face an unfamiliar international environment and huge differences in consumer habits and preferences. In response to this situation, Amazon Advertising will specifically assist customers in developing specialized delivery strategies, covering video ads, search ads, display ads, audio ads, offline experiential ads and other forms. This set of mature Amazon advertising solutions and strategic support can meet the brand building needs of different companies, adapt to the growth paths of brands at different development stages, and meet the differentiated needs of companies going overseas with an all-round, multi-dimensional support system.

Take AstroAI as an example. After trying Amazon Prime Video advertising, the more visually impactful and creative form of expression has become a new tool for AstroAI to tell brand stories and stimulate emotional resonance, and it has also helped the brand gain more loyal users.

Wang Anshi wrote in "Travels to Baozen Mountain" that "the world's most magnificent, bizarre and extraordinary sights are often located in dangerous and remote places, where few people go, so only those with determination can reach them."

No one has ever had a smooth journey overseas. Only those with determination can achieve their goals. In the new stage of "high-quality overseas expansion", Amazon Advertising provides a full range of solutions and strategies in brand registration, brand promotion, brand protection, etc., to help simplify the process of building international brands.

Author | Tang Fei

Editor | Liu Jingfeng This article is written by the author of Operation Party [Xiaguangshe], WeChat public account: [Xiaguangshe], original/authorized to be published on Operation Party, any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.