When products take 'huge leaps in creativity'

Published: 26.11.2019 Related countries:  China China

Chinese households are paying more attention to digitalized consumer products and high-end cosmetics. What's more, they are less price-sensitive now.

For Marc Pritchard, a seasoned salesman and chief brand officer of Procter & Gamble Co, China is the market to be in right now.

Chinese households are paying more attention to digitalized consumer products and high-end cosmetics. What's more, they are less price-sensitive now.

The scene was different until recently. Large stores, major brands and mega cities characterized the market. But all of them have lost their luster as Chinese consumers have more options to choose a lifestyle. This shift in consumer power has given P&G a lion's share of lifestyle products market.

 

"We have worked with consumers across China. It's one of the reasons why we are working with domestic partners such as Alibaba Group and JD, who are reaching consumers deeper and deeper every day," said Pritchard, who has been working with the company for more than three decades.

 

As consumers feel empowered to make informed choices, business opportunities emerge in different market segments, be it electric toothbrushes or facial creams, he said. They all help define the lifestyles that Chinese consumers would prefer.

Pritchard said Chinese consumers are increasingly buying premium products amid consumption upgrade. So, P&G has been focusing on designing the right products for China.

Chinese consumers value a product's good appearance, and they would likely buy good-looking items, Pritchard said. So, P&G has adjusted elements relating to product design and packaging, besides building in China its biggest digital innovation center in Asia.

P&G has also upgraded its counters at various stores in China and enhanced packaging across its entire Olay range of beauty and personal care products.

As a newcomer to the second China International Import Expo held in Shanghai from Nov 5 to 10, P&G showcased 30 of its well-known and latest products.

"The first CIIE showed a clear commitment of the Chinese government to continue its integration with the global economy," said Pritchard. "The second one demonstrated its intention in continuing import promotion, creating opportunities for businesses and consumers in China and around the world," he said.

The Ohio-headquartered group began its China business with a joint venture in Guangzhou, South China's Guangdong province, to produce Head & Shoulders, a type of anti-dandruff shampoo in 1988. To date, it has over 8,000 employees across the country and operates eight plants, 11 distribution centers and several innovation facilities in cities such as Beijing, Chengdu, and Dongguan across China.

With its country headquarters based in Guangzhou, P&G runs businesses for more than 25 brands across 10 categories nationwide, including Pantene, Head & Shoulders, Olay, SK-II, Safeguard, Ariel, Oral-B and Crest. Several of its other global brands are also available to Chinese consumers via its e-store on Tmall, an e-commerce platform owned by Alibaba.

As China has offered a number of policies to spur consumer spending and offer more market access to global companies, P&G has expanded its innovation capacity in China and has been able to build its brands under an increasingly transparent regulatory environment, Pritchard said.

This has reinforced P&G's commitment to providing quality products and services to the China market, he said.

To further diversify its sales channels and communications with Chinese customers, the company's advertising methods also need to change, because the reach of traditional TV is declining, trust in digital media is eroding and e-commerce continues to expand, Pritchard said.

Besides, retailers are creating new media and entertainment services, and new platforms start up every day.

"It's time for us all to lead disruption. It's time to reinvent advertising. There are so many sources of creativity available today, and more coming in the future, so there is tremendous opportunity for huge leaps in creativity," he said, adding the advertising sector has separated from other creative industries for many years.

Agreed Guo Xin, a marketing professor at Beijing Technology and Business University. She said the younger generation also tend to identify with recommendations from internet celebrities and makeup bloggers online, and such an upgrade is not only about what they are shopping for, but also the production process of everything they shop for, which is very much about individuality and pop culture.

"Chinese consumers are demanding and looking for an upgrade and they are more willing to spend money on cosmetics and skin care products, and more people are paying attention to the quality of products," she said.

 

In addition to middle-income earners and millennials, more growth points have emerged in China. Young consumers in lower-tier cities and small towns, and senior citizens are also displaying strong purchasing power for quality products and services, offered by both Chinese and global retailers, Pritchard said.

On a personal note, the father of three said he enjoys playing basketball, outdoor recreational activities and spending time with his family during his spare time.