Chinese Brands Use Singapore as a Launchpad for Global Expansion
Chinese consumer brands are strategically using Singapore as a testing ground for their global expansion, leveraging the city-state’s unique blend of Asian and Western cultures. Companies like Pop Mart, the Beijing-based collectible toy retailer, and Chagee, a Chinese tea brand, are actively establishing a presence in Singapore. "Singapore is a place we call it like where east meets west, right? So for Chinese companies, if they want to go overseas, I think Singapore is a nice middle ground," said Xiaofeng Wang, principal analyst at Forrester.
Key Takeaways:
- Singapore’s unique cultural blend makes it a valuable test market for Chinese brands seeking global expansion.
- Chinese companies are increasingly embracing their cultural identity, using homegrown characters and designs to stand out in overseas markets.
- The "China identity" has proven successful for some brands, including smaller toy companies that have found success at the Pop Toy show in Singapore.
- Chinese firms face challenges in conveying their cultural concepts to an international audience, as seen with Dodo Sugar, a Hangzhou-based toy company.
- Singapore’s diverse market requires adaptation in design and marketing strategies, with brands like HeyCiao highlighting the need for cool and alternative designs beyond the "cute" styles popular in China.
- Building a presence in Singapore requires adapting to local business strategies and platforms, with companies like Pop Mart pivoting from WeChat to YouTube, Facebook, and TikTok.
- The pressure on Chinese companies to expand globally is likely to increase, driven by China’s slowing economic growth and the need to seek higher growth and profits in overseas markets.
Embracing ‘China Identity’
Traditionally, Chinese companies focused on manufacturing Western products. However, a new wave of Chinese brands is emerging, not just manufacturing, but launching their own unique brands with a distinct "China identity". This new generation of brands is embracing their cultural heritage, using homegrown characters and designs that resonate with their target audience.
Chagee, for example, has strategically incorporated traditional Chinese opera elements into its name and branding. Their new directly owned stores in Singapore aim to establish a strong presence in the region, using the city-state as a "launchpad" for wider Southeast Asian expansion.
This approach has proven successful for some brands, particularly smaller toy companies like Hidden Wooo. The brand’s newly launched stuffed toys sold out within hours of the Pop Toy show in Singapore, showcasing the appeal of authentic Chinese designs.
However, not all brands have found it easy to navigate cultural differences. Dodo Sugar, a Hangzhou-based toy company, acknowledges the difficulty in explaining products rooted in Chinese culture and stories to an international audience.
Navigating Challenges
While Singapore offers a culturally diverse environment, Chinese companies are encountering challenges in adapting to a new market.
HeyCiao, a Xiamen-based company assisting Chinese firms with business operations, notes that Singapore’s market prefers cool and alternative designs compared to the "cute" styles prevalent in China.
Chagee faced difficulties in entering the market through a franchise partnership, leading them to switch to directly owned stores.
Chinese companies also have to adapt their marketing strategies, moving away from platforms like WeChat and embracing platforms like YouTube, Facebook, and TikTok. Pop Mart has expanded its e-commerce presence through platforms like Shopee, Lazada, and TikTok Shop, recognizing the platform’s potential to reach a wider audience.
A Growing Trend
Chinese companies are increasingly realizing the importance of Singapore as a springboard for global expansion. JD.com, a major Chinese e-commerce giant, recently announced enhanced shipping and delivery options to Singapore, signaling its commitment to the region.
Forrester’s Wang believes that the slowdown in China’s economic growth will further accelerate the rate of global expansion for Chinese companies. Driven by the need for higher growth and profits, they will actively look to tap into overseas markets, with Singapore playing a crucial role in this strategy.
As more Chinese companies recognize the unique advantages offered by Singapore, the city-state will continue to be a central hub for their global ambitions. With its strategic blend of cultures, business infrastructure, and evolving digital landscape, Singapore is proving to be a valuable stepping stone for Chinese brands navigating the global market.
