Thinking long-term will help Aussie businesses in the Year of the Dragon

The Lunar New Year will kick-off on Saturday, starting a fortnight of festivities, travel and gift giving as Asian communities across the globe welcome in the Year of the Dragon.

As the most auspicious of the 12 zodiac signs, dragon years are considered to be particularly important in the Lunar calendar. With 2024 shaping up to be a significant year, Australian businesses will need to be adequately equipped to make the most of it.

How Australian business can capitalise

As Australian businesses seek to capitalise on positive energy, an understanding of major trends and events in the region will prove pivotal for success.

 A focal point for this year will be the major elections taking place in Asia. Indonesia will be the first major Asian democracy to head to the polls on Valentine’s Day, followed by voting for South Korea’s parliament in April and Indian general elections by mid-year.

In contrast to other parts of the world, these elections are anticipated to deliver political continuity, allowing businesses to reaffirm their long-term commitment to the region.

Closer to home, there’s a renewed government focus on Southeast Asia following the release of Australia’s Southeast Asia Economic Strategy to 2040, which is encouraging diversification to the rest of the region. Coupled with economic instabilities witnessed in China last year, Australian businesses are vigilantly watching opportunities in these markets. However, China remains an attractive consumer market, and the Lunar New Year period sees a massive spike in consumer spending.

Understand cultural drivers and the link to business

In Chinese business culture, people believe in good harmony and relations as critical components to a successful business.

Maintaining harmony and avoiding conflict is key in working with Chinese counterparts. In Chinese culture, face could mean more than money. Be careful of making critical or negative comments in public and share them in a more private setting if required.

Etiquette generally plays an important role in establishing new relationships, visits, special occasions, and formal meetings.

In a formal setting understand the seniority and hierarchy of counterparts in meetings. This will determine the order of speaking, seating, and leaving.

Be a good communicator by speaking slowly and clearly and put the emphasis on listening; use documents/diagrams and translations/interpreters to support communication.

 A way to build personal relationships with Chinese counterparts is to ask about what their name means and the history of the characters behind it. Also have your own meaningful Chinese name to help you stand out.

Relationship building is like Tai chi, which can be slow and requires time and effort but is very powerful.

Understand the consumer base

Despite economic challenges, Chinese consumers remain resilient. In a post-pandemic world, Chinese consumers have not traded down their lifestyle, instead, they are becoming more selective in product quality and more sophisticated in their buying channels.

 Product or service localisation in China should ideally be supported with adequate research or consumer testing. Key localisation considerations include brand, product features, prices and marketing. It is important not to lose Australian authenticity in the process of localisation.

Older consumers in China now are increasingly utilising digital platforms for essential needs like grocery shopping and family communication, making them more accessible through online channels compared to the pre-pandemic era.

Chinese consumers are drawn to Australian products primarily due to their association with the perception of being clean, organic, safe, and authentic; attributes that have gained the trust of Chinese consumers.

Chinese consumers are shifting away from the traditional 996 (72 hours per week) hard-working culture and embracing leisure activities like skateboarding, frisbee, and skiing.

Consider cultural elements in your branding or marketing campaigns and ensure the cultural elements are used in a way that is respectful to the Chinese culture, history, and people. This is where brands can get it wrong.

Digital and social marketing landscape

Incorporating Chinese Key Opinion Leaders (KOLs) into a marketing approach is crucial for swiftly establishing consumer trust and enhancing brand presence.

Chinese consumers, particularly among millennials and gen Z, exhibit a strong reliance on KOL recommendations, especially when it concerns new products like cosmetics, beauty items, and food, and turn to KOLs for reassurance through their reviews.

Douyin is the domestic twin of the global phenomenon TikTok. Although the two platforms remain separate, and content is unavailable to access from their counterparts. At 700 million plus active users and growing, the explosive growth in content and user base owes to the rising gen Z demographic and 5G connectivity.

WeChat also remains a vital marketing channel.

Digital marketing in China is a specialised field, and it is recommended to always speak with professional digital marketing agencies.

Think long-term

Invest time to understand how business and regulations work in China. Know your own value propositions and the IP assets that underpin those values.

Consider what brand localisation looks like and control the local version of your brand. Registering a trademark in English means potentially being in a disadvantaged position if the local Chinese version becomes dominant in the market.

Be proactive in protecting IP rights. Build a strong brand story and entrepreneurial profile that adds layers and details to the brand.

A Unique Selling Proposition developed in the past may not work anymore in the post-pandemic era. Invest in market research to understand the nuances of customer preferences, needs and behaviour, and localise offerings and strategy. Adapt to the changing trends.

China is an attractive market that needs a long-term perspective and too often a business will stop after a short-term pilot. Don’t be that business.

Leigh Howard is the chief executive of Asialink Business at the University of Melbourne and one of Australia’s leading voices on international business.