On this episode of The Negotiation, we welcome Milo Chao, formerly with TBWA China for over 4 years and an Expert in Residence at Chinaccelerator, and now the Co-Founder of Chao and Cao, a Shanghai-based strategic advisory firm established to help foreign brands grow locally and Chinese brands grow internationally. Milo has over 2 decades of marketing and branding experience, much of it in China, which inevitably led to this becoming our longest episode to date. We thoroughly discuss many aspects of China market entry, covering the difficulties of marketing in the auto industry to why the infant milk industry was surprisingly easier. We also talked about whether Chinese consumers care about a brand’s CSR activities and social impact status, the importance of maintaining or even investing further in customer service resources for China, and why brand’s need to invest in revamping their customer profiles from the beginning and re-learning customer empathy for the Chinese market.
Show Notes
Milo has a long and distinguished career working with a long list of amazing brands he’s worked with under his belt, so we kicked off the show asking him to discuss the more difficult industries he’s had to work on in China and Milo pointed to the auto industry as the most difficult. He’s worked with Volkswagen, Nissan, Ford etc. and because the market is so competitive and advertising is so homogenous it’s difficult to try and convince them to be different. We then asked for the opposite, the surprisingly easy industry to make a mark in and be different, and he talked about the infant milk formula industry and some examples as to why.
We then move on to discussing some of the mistakes foreign brands make when entering China, first discussing the odd fact that many brands will forgo the strengths they had in other countries to try and become overly Chinese. He goes on to say that what really matters is about taking those strengths and figuring out how to make it relevant to the Chinese consumer and then to differentiate and be heard above the noise. He also talks about the importance of local leadership to be able to make decisions on the ground in real-time. Milo also covers how the competitive landscape has changed over the last 5 years, how important it is to learn the local platforms, and suggests that Chinese brands are doing a better job of ‘going guerilla’ in their marketing and that foreign brands need to “take the gloves off” and not be afraid to do what needs to be done to win.
We asked Milo to speak to whether the Chinese consumer is paying attention to a brand’s CSR activities or environmental impact along the loyalty-building path. His take is that they are starting to and studies are showing it is starting to impact a brand’s reputation but we’re not yet at the point of a consumer avoiding products that are tested on animals for example. We then move into the arena of authenticity and if it’s important for a brand, and Milo has an interesting take on the first step to answering that question being the definition of what authenticity actually means per industry. He mentions that the younger consumer has an increasingly adept BS radar system and desire to spoken to directly without beating around the bush or being too poetic.
We then moved on to a very deep discussion around customer service and how important is it for foreign brands not to overlook this important facet to the customer journey. Milo reminds us how openly conversational Chinese consumers are, how social they are and how often they will complain about bad product experiences, and the level of importance the Chinese put on word of mouth when making their decision on whether a brand is valuable or not.
Turning into the longest episode we’ve ever recorded, we discussed whether or not brands should consider and invest in revamping or re-learning their ‘KYC’ or ‘know your customer’ profile. Milo confirms our suspicions that yes you definitely should, and it’s not about throwing out what you already know about your customer but to develop empathy for your local customers without trying to fit them into a global model.
What is The Negotiation?
Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.
The Negotiation is an interview show that showcases those hard-to-find success stories and chats with the incredible leaders behind them, teasing out the nuances and digging into the details that can make market growth in APAC a winning proposition.