By Xu Junyi, Yang Xixia, Wu Haiying, Wang Yige, Zheng Manyi, Pang Xinyi, Yang Kaiwen, Lu Chenwei, Xiao Mingjun, Cao Shijun, Wang Yizhi, Li Shuhan
As we all know, the primary market of Ocean Sole is Europe and the U.S, which has indicated a big success. As for the China market, coupled with the meteoric rise of both the size and spending power of its young generation, it holds enormous potential for consumers goods and services. But clearly, the different promotion systems and consumer behaviors are unlike anything marketers have ever seen before, and it presents challenges as serious as its market is large, making it difficult for Ocean Sole to enter the market at the beginning.
To see how Ocean Sole can approach the emerging Chinese consumer, China House, we did a lot of desk research and quantitative research during a 6-week project and then put our insight into practice. This report attemps to sketch out the stactics Ocean Sole can taking, which examines the current marketing characteristics in China, and identifies some of the critical barriers that we need to overcome. Generally, we think that Ocean Sole can effectively compete with many types of competitors in China because a unique branding story as well as elaborated products are offered at a relatively competitive value-added price. We are targeting specific segments in the consumer and business markets, taking advantage of the growing interest in marine protection and Africa–China relations.
1.1 SWOT Analysis
- Innovative product —— According to data released by the World Tourism Organization, the number of Chinese tourists who went to Africa in 2008 accounted for only 3% of the total number of overseas tourists, and this proportion rose to 10% in 2016. People are attracted by the Africa savanna and culture, which have become the symbol of Africa to many Chinses consumers. Ocean Sole’s products are craved into different kinds of animals with a strong African style, which is very attractive to Chinese customers. According to our questionnaires, the top 5 products are giraffes, which accounts for 25%, dolphins and pandas(17%), elephants(16%), and lions(13%). Moreover, they are not like ordinary commodities, but all hand-made works of art distinguished from many assembly-line toys. Thus, Ocean Sole indicates strong product development and design capabilities to satisfy personalized needs. For example, as the national treasure panda of Ocean Sole is so popular when it aims at the china market, we can develop more types of products with Chinese culture.
- Branding as a social enterprise —— Many Chinese companies more focused on the product itself than shaping the story behind, while Ocean Sole’s brand story is quite inspiring and intriguing to customers. By removing trash from the oceans and waterways and recycling it into art, Ocean Sole supports marine conservation and creates employment opportunities. This meaningful story is the main selling point that other crafts might not have. When a customer buys a product from Ocean Sole, he or she get not only the item, but also the sense of achievement and satisfaction. It means that one is making his or her contributions to the world’s environment, creating a meaningful impact and memory. In this way, a great story of environmental protection for Ocean Sole is needed, which indicates its importance to both customers and business companies.
- Experienced Marketing promotion —— From website to emailing, from Facebook to Youtube, we can saw Ocean Sole did an excellent job on marketing. Firstly, these social media platforms are updated regularly, which keeps good interaction with consumers. Secondly, relevant promotion materials are fully prepared, such as the brochure and videos. Moreover, Ocean Sole did a lot of marketing campaigns with good ideas, which involves more consumer engagement. These mature marketing experience will help us to further promote in China.
- Relatively high price —— The original price of Ocean Sole is more appropriate for the Eastern and American markets, where customers have stronger spending power. As for China, they are a little bit expensive if we want to attract more customers since the opinion of environmental protection is still developing, and people are not ready to pay a lot for the environment and something without practicability.
- Low productivity —— All of the works of art are made by hand, limiting the production to some extent.
- Increasing concern about environmental protection ——According to the report of the Environmental Awareness Survey of Chinese Urban Residents in 2019, the popularization of necessary ecological protection knowledge and media promotion basic environmental protection knowledge has increased significantly. Thus, the awareness of urban residents in China has also improved. And more than half of the respondents pay particular attention to the environment and think that their actions will impact it. The survey found that more than 80% of the respondents expressed their willingness to contribute to environmental protection. Among them, 73.2% of the respondents are willing to donate, while 82.7% are willing to volunteer for ecological protection. In this way, what Ocean Sole did will more natural to be understood and recognized by customers.
- The One Belt One Road initiative is a transformational development strategy and framework promoted by Chinese government. OBOR focuses on connectivity and cooperation among countries along two routes: the land-based Silk Road Economic Belt and the ocean-going Maritime Silk Road, Among which Africa is an important cooperation partner. On the one hand, it offers the opportunity for African companies and institutions to work with their Chinese counterparts in developing projects. On the other hand, Chinses customers have more access to know and understand Africa, showing a positive attitude towards cooperation.
- Consumer’s concern —— Although people have a better knowledge of Africa, we are so pity that many of them still hold prejudice, such as poverty, disease, and so on. As our materials are abandoned flip-flops lack of hygiene certification, they may further affect some people’s views on our products. Our most target customers who are well-educated and usually live in first-tire cities, they are more open-minded. For example, under the endorsement of China House and precise positioning, this time, we don’t receive many doubts about this. But when we want to approach more relevant customers and launched the marketing ourselves, we may face such threats.
- Shipping—— The delivery system is quite mature in China. There are many logistics enterprises, such as EMS, ShunFeng, YunDa, Zhongtong, etc. They keep cooperating with some online shops and send goods to customers. People not only can see Real-time delivery information through online shopping platforms, like Taobao on smartphones but also those products they bought are insured against loss, damage, etc. Chinese consumers usually receive their items within only 3-5 days. If they buy something oversea, it will take two weeks around. However, the customers may have to wait for their goods for weeks for international transport between Africa and China. We also have asked some Chinese logistics companies. In this way, many consumers may lose their patients and even would not buy the product.
1.2.1 Main Competitors
As for the unique positioning Ocean Sole made, we can hardly find the direct competitors. Usually people buy works of art with special meaning or theme on exhibition or specific activities. Here are some potential competitors we may facing in China.
- Art derivatives —— Art derivative refers to the combination of art and products derived from artworks with particular artistic added value developed under the authorization of artists. Art derivatives allow art to enter and serve people’s lives from a niche level, filling the market gap created by the high prices of artworks. At present, China’s art derivatives are still in the initial stage, and people show enthusiasm for the consumption of culture and art. But they have not formed a standardized system and standard, let alone a brand. More people are willing to buy art derivatives as commemorations and combine their practical daily use to add artistic flavor to their lives. Most of the art derivatives are sold offline in physical stores, mainly in various art districts or art galleries.
- Cultural and creative products —— From 2015 to the present, artistic and innovative products are developing rapidly. Nowadays, the young consumer’s need has gradually turned from cheap and straightforward to more meaningful and beautiful. The sales volume of Chinese major cultural and creative products in 2019 is three times that of 2017.
This kind of product has some unique characteristics. Firstly, people add some elements with traditional culture and art into the original products, which attracts a lot of young fans. Secondly, The online shop, especially the Tmall of Alibaba (the most famous Chinese e-commerce company), is their primary channel, which provides a more natural way for young people to purchase creative products. For example, The Palace Museum defended its status as an “Internet celebrity” by selling all of its royal color lipsticks on Tmall Company in half a day.
The Cultural and creative products are usually produced by famous museums and small-scaled studios, aiming at the high-quality, design-oriented and middle-end market. Their consumers are more likely to pay for the brands and designs of the products. Take the Palace Museum as an example.
The cultural creation of the Palace Museum combines the cultural heritage and fashion elements. Combining these fused creative elements with luggage, apparel, jewelry, and mobile phone cases can meet the purchase needs of different levels of society in terms of style, permission, and price. In addition to this, it also carried out cross-border cooperation with many Internet companies and spread it through social media.
We can see the cat sculptures (3*5*4cm for each)on the photos. The price is 48 yuan, and the monthly sales volume of this product on T-mall is 43. Each of these small cats was given some subtle features that show people different statuses in the palace of the Qing dynasty, including the emperor, imperial concubine, prince, princess, and general, etc.
- Product sold by a non-profit organization ——As the government vigorously promotes public welfare, Chinese consumers pay more attention to public welfare. Some NGOs will design some meaningful products and using it as a fundraising tool or event gift. A big bear toy (35*45cm) that is sold by United Nations Children’s Fund. This is a single product sold online. Even though it would cost 277RMB, many parents like to buy it (monthly sales of 42). All the proceeds from the toy will go to helping war-torn children in the world. It takes advantage of the psychology of most consumers who can afford it (parents) and who will feel sympathy for the suffering children.
1.2.2 How We are Different
We can find that there is no big company which has cornered the market. As long as our products are unique enough, it is possible to attract consumers and open the market. As for the attraction of Ocean Sole, according to our questionnaire survey, which collected 420 highly reliable data, unique African characteristics make up 61%. Besides, 53.4% and 36.8% of the participants like the meaningful value of environmental protection and cute animal design, respectively. Thus we can conclude two differences also advantages that distinguish Ocean Sole products from others, which have even in part of strength.
- Unique brand story
- Products with African and animal characteristics
1.2.3 Barriers to Entry
- Lack of investment —— Because of the insufficient investment, we cannot carry out large-scale offline or online activities. There are many big shopping malls in first and second-tier cities. But we don’t have enough money to do an exhibition ourselves or open a shop there. Moreover, in China, it has been trendy to invite the key opinion leader to use the good and share on social media, which can exert a significant impact on their fans.
2. Marketing Strategy
2.1 Target Market & Target Consumer
There may be many different segment markets for Ocean Sole. As our team are composed of students and fans of China House are mostly the young generation, we focus on the people with age from 15 to 30 as our target customers, and detailed information are listed as follows.
2.2 Positioning In general, for Chinese consumers, we are positioning Ocean Sole’s products as the hand-made works of art with strong African characteristics and the vision of marine protection.
By analyzing 419 questionnaires and selling over 100 Ocean Sole products within one day successfully, some strategies have been suggested for Ocean Sole to enter the Chinese market.
- Set hit product ——For the Chinese market, we suggest selling products with visible African characteristics. Compared with others, the safari collection with classic animals, like giraffe, elephant, lion, and rhino, shows more popularity. We can prepare more stock and correspondingly more promotion resources should be given, like banner and well-designed posters. On the basis, we can choose our hit product, especially like giraffe, panda, lion, to do more sales promotion. In this way, more potential customers will be attracted to the shop.
- Launch Customized product with Chinese tradition——According to our market survey, many of the respondents advised they like products with Chinese elements. Launching a series of Chinese zodiac products that are embedded in Chinese traditional culture can be the right choice.
The Chinese zodiac, or shengxiao (/shnng-sshyao/ ‘born resembling’), is a repeating cycle of 12 years, with each year being represented by an animal and its reputed attributes. The 12 Chinese horoscope animals are Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Goat, Monkey, Rooster, Dog, Pig.
Chinese zodiac animals have lucky meanings. Chinese people associate each animal with specific characteristics. It’s believed that people born in a given year have the personality of that year’s animal.
Ocean Sole can launch one Chinese zodiac product with good looking as a commemorative edition every year. Chinese People will be more interested and more willing to buy it. By limiting the supply of Chinese Zodiac products can expand the desire of customers and promote consumption further.
- Launch product mix with a lower price —— In our marketing practice, based on the research of customer’s interest, we set 3 series of Ocean Sole products and were all sold out. These series are composed of popular products with a relatively low price. Here are three sets that we made in this event.
Launch More types of goods——We suggest producing more products with a utility function. These kinds of products can be set at a low price to attract people who support environment protection with less money. They can be sold along or sold in the set as the complimentary.
Stationeries, such as pencil, ball pen and pencil case with Ocean Sole’ style.
Accessories, such as bracelet, brooch and so on.
Unique postcards with artists’ signatures. They are meaningful and Chinese customers care about the humanistic value of these products.·
Other Selling Strategies ——To improve the customer experience and word-of-mouth promotion at the beginning, we also need to pay attention after customers place the order.
An environmental protection certificate can satisfy customers’ hidden needs and present the contribution to ocean protection. We have designed a certificate in this event, and some of our customers are keen to it. Offering this certificate can catch more Chinese people’s attentions when it comes to products.
Exquisite packaging can give customers an impression, and many Chinese prefer products with beautiful packaging when they are choosing the products. We can provide Oceanic style or African style packaging for the product. Besides, we can also prepare a card or a sticker in the bag to encourage our customer to share the photo and feeling on social media.
Considering the shipping service is difficult to improve in Kenya, we suggest to keep in touch with our customers. For example, shipping was delayed because of the COVID-19. It is essential to explain the situation to customers and inform them of updated delivery information timely. This can win customers’ trust. For instance, we have informed the customers about the delayed news and will tell the logistic information when products arrive in China.
After analyzing questionnaires, we found that around 40% of consumers can accept such products with the price below 100rmb ($15), 33% of people would agree with the price between 100-300rmb ($15-$43), and only 5% people can accept the amount over $43.
One reason may be that our target customers are mainly college students. Another reason is that the price of most handicrafts in an online shop in China is usually below $43.
- Price for a single product—— Although more people are paying attention to the environment, most of them haven’t yet developed the consumption habit, that is to say, they are not ready to spend a lot of money immediately. In this way, products with meaningful stories and reasonable prices are more acceptable for them at the beginning. In this way, as for the customer ( not include business ), here are our suggested prices just for reference. The result of our sales shows that it’s an acceptable price for our customers.
- Small: ¥89 – ¥129 ($13 – $18 )
- Medium: ¥ 129 – ¥ 200 ($15 – $29)
- Large: ¥ 500-¥ 700 ($70 – $100)
- X Large: ¥ 1200- ¥ 1500 ($168-$ 220)
- XXLarge: over ¥ 2500 ($350)
2. Price for set – Price for the set is cheaper than buying separately. For example, the Ocean Series’ original price, which contains three products, is 347 RMB ($50), and the new set price is 325 RMB ($45). With a discount of around 5 dollars, it enlarges the consumption power to three products for customers.
Secondly, we offer different types of small discounts. For example, if you buy more than two products, the delivery fee will be free. Another example is offering the discount coupons. If you spend over 169 RMB ($24), you can get 5 RMB ($1) discount. It encourages customers to buy a larger size and buy more.
Some distribution channels that can be considered as Ocean Sole’s potential partners.
- Zoos and aquariums ——As Ocean Sole has built cooperation with zoos and aquariums in other countries, it also works in China. Firstly, there is an increasing number of zoos and aquariums. Until 2019, there are 185 zoos and over 200 aquariums in China. Secondly, shops are operated in every zoo and aquarium. Ocean Sole’s products can be displayed in the shopping area where tourists can access it.
2. Enterprise —— It is easier for Ocean Sole to enter the Chinese market by cooperating with some enterprises with the same vision about sustainable development. The value of environmental conservation behind Ocean Sole is unique. There are potential partners:
- China House —— China House cares about sustainable development, and we organize this event. Using the official Wechat platform of China House with 50 thousand followers for promotion, 100 products were sold out just within one day.
- Vibram —— It is an enterprise that sells rubber soles. Their marketing manager has shown great interest in Ocean Sole. In this event, they helped us publicize our promotion article on their Wechat official platform.
- Zoo Coffee —— Established in South Korea in 2009, it is a unique animal-themed coffeehouse chain brand with many branches in China. It has a close relationship with China House, sharing the value of protecting the animal and cultivating the new generation. Zoo coffee sells some related products, such as many animal-looking toys in their shop. In this way maybe we can build cooperation with them in the future by becoming part of their supplier.
- Shopping mall ——Since the 1980s, China’s shopping malls have experienced a stage from the beginning to prosperity. Nowadays, more and more shopping malls, especially in first and second-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, not only focus on satisfying customer needs but also care about the customer’s purchasing experience. Customers also have higher and higher requirements for the shopping environment. They prefer to go to the mall, which is unique in style, rich in color, fresh in the air, and beautiful in the atmosphere so that they can get a full sensory experience of shopping, socializing, leisure, and entertainment at one time.
Besides, “Green” and “health” are getting more and more attention from the public. While everyone’s consumption concept is moving closer to this field, shopping centers will also regularly organize activities and decorations related to environmental protection.
Ocean Sole can choose the shopping malls with a big brand, which is more likely to support our idea, such as Wanda Plaza, Raffles City, and so on. Life-size products are appropriate to sell, especially before International Environmental Day or World Ocean Day. There can be a board showing the stories and ideas of Ocean Sole. People who are interested in this product also can find the official website and purchase methods on the board.
4. Online Shop：Taobao、WeiDian
- Taobao is the biggest online shopping platform, with 800 million monthly active users in China. Here is the guide may help to open one Taobao store: https://www.imoney.my/articles/taobao-shopping-guide
- WeiDian is another popular online shopping platform based on WeChat, which is free to operate. Here is the guide may help to open one WeiDian store: https://walkthechat/create-wechat-store-free-weidian/
- As for the terms of payment, it is easier for customers to pay by Wechat Pay or AliPay rather than using the card.
Social marketing—— To expand publicity and enlarge the popularity, Ocean Sole can use different Chinese social media platforms to promote its products. There are different types of social media in China, and each one has a unique characteristic.
- WeChat platform —— Almost every Chinese people use WeChat. It is the most popular social media with 11 billion monthly active users. People can send the messages, use voice or video call and share their moments.
As for the enterprise, we can open our official account on WeChat. WeChat Official Accounts are the WeChat equivalent of a Facebook page: they are an interface a brand can use to gather followers, send them push notification, redirect them to a website/e-commerce. Here is the guide that may help to open a WeChat official account: https://walkthechat.com/wechat-official-account-simple-guide/#wechat-official-acct
- Weibo —— Weibo is like Twitter. The number of users of Weibo is about 500 million now. People usually use it to post their life and check current affairs. Ocean Sole can open its account updating regularly. Here is the guide that may help to open a Weibo account: https://walkthechat.com/is-weibo-still-popular-in-china/
After China House posting, two Ngo’s official accounts repost it.
- Tiktok —— Tiktok is a short video-sharing platform and lives video platform. Global active users of Tiktok are estimated to be 800 million now. Users can look through the recommended short videos and make comments. If users are not interested, they can slide up to see other recommendations.
One the one hand, we can post some short vides with no more than 1 minute on TikTok to update Ocean Sole’s work and activity; Besides, we can launch the livestream to talk with our fans directly.
- Bilibili —— It is a video-sharing platform and lives video platform. Active users have reached 172.4 million in the first quarter of 2020. Chinese people, especially the generation after the 90s, use Bilibili daily. As we have many fantastic video resources, we can post the video on this platform like what has been done on Youtube.
- Presale ——Preselling product is a good selling strategy. We suggest to presell some kinds of products and send them off on some environmental festivals, which probably raise customers’ expectation and makes them feel their purchase more meaningful.
- Live video streaming event ——In recent years, live online selling is prevalent in China. Now, quite a lot of Chinese like to watch live videos on Taobao, Tiktok, etc. to buy something at favorable prices. Cooperating with KOL is excellent for carrying out live shopping advertising.
For instance, Li Jiaqi(“李佳琦Austin”, China’s lipsticks sales king) was a salesman in a makeup offline shop and now has around 26 million fans on Taobao Live. According to Alibaba data, Li’s online broadcasts raked in over 1 billion yuan (142 million U.S. dollars) in sales on the shopping platforms of the Chinese in the month ahead of Shopping day (November, 11) .
Online Event——We can initiate some campaigns of environmental conservation with these social enterprises together, especially in “International Day for Biological Diversity” and “World Oceans Day”. In this event, we can share the special meaning with our customers for marine protection and promote Ocean Sole’s products.
- Offline Event —— As we mentioned above ,shopping mall in China combines shops, restaurant, cinemas, KTV and so on, which may not only buy products but also hold some relevant event toghther.
- We can organize workshops where people can sculpt their animal-shaped products. This kind of activity is an attractive promotion way in China, especially for younger generations.
- We can organize volunteering events in China, such as beach cleaning volunteering activity and set Ocean Sole products as a prize. On the one hand, it is an education process for customers about the importance of ocean protection. One the other hand, people can understand the ideas behind Ocean Sole.
- Customers Relationship —— Build the better relationship with customers can help Ocean Sole expand brand influence and increase the repurchase rate.
- Wechat Group——lt is a unique way to build a better relationship with customers in the online community. On the one hand, we can deliver our latest activities in the community as soon as we launched it. On the other hand, we can also have our fan’s personal contact to build a deeper connection with them, which helps us better understand customer’s deeper needs and the suggestion for the product.
Cooperation with NGO & Media —— Ocean Sole can work with NGOs which care about environmental protection. The collaboration way can be advertising on their official social media platform, such as Weibo, Wechat platform. In this event, China Development Brief (16,889 fans) and Magazine “Ocean World”(around 176,000 fans) reposted the article that we posted, which have attracted more attention. Some potential partners are willing to repost Ocean Sole’s products:
China Development Brief
Ocean World Magazine
World Wildlife Fund in China (WWF China)
China Oceanic Development Foundation (CODF)
International Union for Conservation of Nature (IUCN China)
Though many remains to be learned about the Chinese Market and consumer, we hope this marketing report can help OceanSole family build a preliminary understanding about what we are facing in China. During this project, what insipired and encouraged us most is the great support and positive feedback of survey respondents and buyers when talking with them. It is believed that Ocean Sole’s products are competitive and unique as long as we find our target customers, who cares about the environmental protection and international affairs. Some trends of success shine through—insist on telling our stoies on social media; be authentic and find ways to be locally and culturally relevant; find some business partners and distributions who share with the same vision; organize marketing events on special festival.