Sunday, October 26, 2014

Can China Build a Car That Will Sell?

Qoros, a new automaker from China, is aiming to be the first Chinese car brand accepted on an international level. And it plans to do so by rethinking the traditional auto-marketing standard -- speed and open roads -- and creating a practical, more "social" vehicle suited to urban life. Unlike other Chinese car companies, typically known for substandard, unsafe vehicles, Qoros is a venture between Israel's richest man and state-owned Chinese automaker Chery Automobile. It employs European executives and designers who are veterans of companies like Volkswagen and BMW.

 "We are a Chinese company in the sense that we are born in China, one of our parents is Chinese," said Stefano Villanti, Qoros' head of sales, marketing and product strategy, speaking from his office overlooking Shanghai's Oriental Pearl Tower. "On the other hand, we make international-level product."

He said when Qoros launched in 2007, its execs considered that many cars are rooted in decades-old ideas of speed and the open road -- far from the reality of constant gridlock in so many cities. Qoros wanted to make a car better suited for modern urban life.

 "We thought there was an opportunity to create something different, where the balance is tilted more to comfort, sophistication, digital connectivity -- what we call a social car," Mr. Villanti said.

A digital ecosystem allows the car to connect with the owner's mobile devices via an app and features a touchscreen "infotainment" system. And its sedan model features shoe storage on the passenger side for on-the-go footwear changes and additional space to stow water bottles.

One of Qoros' biggest challenges is overcoming deeply-rooted stigmas against Made in China." Mr. Villanti notes that consumers in China, Qoros' primary market and the world's largest car market, are the most distrustful of Chinese auto brands.

"Someone has to be a game-changer, and maybe Qoros has the opportunity once and for all to change the perception of quality for "Made in China,'" said Arto Hampartsoumian, CEO of BBH China, Qoros' creative agency of record. "Something so visible as a car, if it does live up to the expectation ... then they will be able to change perceptions on a bigger scale."
 ...
Qoros' shops include the Shanghai offices of Mindshare (media) and Agenda (digital). The focus is on telling opinion leaders and consumers who it is and why it exists, Mr. Villanti said.

The company's tagline is "A New Drive." Outdoor ads for the Shanghai auto show, which kicked off this past weekend, show Qoros sedans on an assembly line. It poses the question: "Does the brand create quality, or does quality create the brand?"

The 3 sedan, priced from about $21,000 to $29,000, is scheduled to go on sale in China and Eastern Europe at the end of 2013. A hatchback model set for release in early 2014 will help pave entry into Western European markets.

Qoros' biggest problem may not be the product, but the market into which it's launching, with car sales flat in China and on the decline in Europe. "The concept is good. The timing, however, is unfortunate," said Bertel Schmitt, editor-in-chief of automotive website The Truth About Cars. So does the world really need another car company? "No," Mr. Vallanti said. " Just a different one."

Read at Adage.com.

Friday, October 24, 2014

Michelle Phan, YouTube Maven

Adage lunched its 2014 Media Mavens list. Michelle Phan, YouTube-star, is one of them. She draw a lot of my attention after I watched her "Draw my life" at YouTube. It's very touching. I never thought the lovely girl had a very tough childhood.


Michelle Phan was a freshman design student at the Ringling College of Art and Design when she posted her first video makeup tutorial on YouTube in 2007. It got 40,000 views in a week.


By 2009, YouTube had approached her about joining its partner program, and after videos on "How to Get Lady Gaga's Eyes" brought her over a million subscribers, L'Oréal's Lancôme approached her about becoming the brand's official video artist. She quit school after her junior year.


Senior year was to be devoted to a capstone project, which was going to be creating her own makeup line. By 2013, she'd done that anyway, with Em by Michelle Phan through L'Oréal (and Ringling gave her a well-earned honorary degree).

She now has a YouTube channel with nearly 7 million subscribers, has starred in a Dr. Pepper commercial, started the multi-channel FAWN (For All Women Network) and is publishing a book in October.

But she's not giving up on makeup tutorials, which have become a genre dominated by bloggers like her rather than brands.

"Normal people, customers, just connect more to a person than a brand," Ms. Phan said. "A brand is a brand. You get great products, but you don't really connect to a brand. A lot of beauty brands are trying to crack the code, but I'll be honest, it's not a code you're supposed to crack. You have to go with the flow and let people like myself champion your brand and use the products in a more genuine and authentic way."


If you want to read her whole story, please go to Glamour.
Phan's new book: Make Up

Thursday, October 23, 2014

P&G Early Foothold in China Pays Off

P&G says its Clinicare combats hair aging.
Talk about the health of any consumer-products multinational, and China will inevitably enter the conversation.

Loudly, in Procter & Gamble's case. On an earnings call last week CEO Bob McDonald said P&G has a $3.5 billion to $4 billion business there, far bigger than any rival. There are challenges -- P&G Chief Financial Officer Jon Moeller on the call faulted market-share losses in China for the company holding or gaining share in only 45% of its business globally last quarter. Still, P&G's business in China is growing at a healthy clip -- 16% in the last fiscal year -- bettering results from developed markets like the U.S. and Europe.

"P&G is so entrenched in China. They made the investments early and their brands have great cachet now. So, they're kind of like the team to beat," Deutsche Bank analyst Bill Schmitz said.

How has it gotten there? With early investment, insight-driven marketing and product innovations. P&G and Unilever are now about the same size in Asia, both with more than $18 billion in sales, but in China P&G is more than twice the size of Unilever.

In fact, P&G earlier this year relocated the global headquarters for its beauty and baby-care businesses to the Asian business hub of Singapore to better serve consumers in the region. Its ad agencies in China include Saatchi & Saatchi, Grey Group, Wieden & Kennedy, Leo Burnett, BBDO and Publicis. Citing a quiet period, a P&G spokesman declined to make Greater China President Shannan Stevenson available for an interview.

P&G's innovations include skin-whitening products from Olay and SK-II, which play into the dominant mentality in Asia that pale skin is beautiful. Crest toothpaste comes in flavors such as green tea. Tide Naturals has been a success in India, targeting the 200 million families there that still wash clothes by hand.

Chinese consumers buying washing machines for the first time are often given a complimentary packet of Ariel detergent, while Crest teaches kids in lower-tier communities how to brush their teeth.

In China, P&G's Head & Shoulders, Rejoice (formerly known as Pert Plus in the U.S.) and Pantene are the top three shampoo brands, commanding a combined 33.2% market share, according to Euromonitor data. Crest is China's top oral-care brand, while Olay is the top brand in the all-important skin-care category.

Crest Pro Health Complete 7 battles issues caused by 'modern lifestyles.' Crest Pro Health Complete 7 battles issues caused by 'modern lifestyles.'

The crux of P&G's $10 billion cost-cutting plan calls for focusing on its 40 largest and most profitable businesses, the 20 largest and most promising innovations and the 10 most important developing markets. P&G execs have not named specific brands and markets, but Pantene is almost certainly on the list. In China, its marketing strategy plays up concrete benefits to the demanding female consumer in a market where competition is fierce.

P&G has also introduced Clinicare by Pantene, targeting slightly older, higher-income women. The product combats what P&G calls "hair aging." The "Age Defy" campaign by Grey Group used the image of a restart button to educate women that hair ages just like skin does, Ms. Govindji said.

Meanwhile, Crest offers a portfolio of products targeting different demographics. The premium Pro Health Complete 7 toothpaste is aimed at top-tier consumers, while anti-cavity Repair is geared to a nationwide audience.

The marketing was built around the insight that "progressive modern life in China, oral health of Chinese people ... was depreciating," said Justin Billingsley, regional CEO and chairman of Saatchi & Saatchi Greater China, which handles creative for Crest. Complete 7 is positioned as fighting against seven oral-health issues caused by modern lifestyles, while anti-cavity Repair combats problems caused by sugary diets.

A key challenge for P&G going forward is stepping up in the beauty category, said Javier Escalante, executive director, Consumer Edge Research. He estimates that China will contribute 30% of the world's growth in the skin-care category over the next four years. Beauty offers high profit margins, and both men and women in China use skin-care products.

Read more at Adage.com.

Saturday, October 18, 2014

Chinese Americans Face Stereotypes, Good and Bad

The first large group of Chinese immigrants came to the United States in the middle 1800s. At that time, some Chinese moved to the American west to build a railroad across the country. Many others worked in mines or on farms.
 
Chinese immigrants helped the U.S. economy. However, most Americans saw the Chinese as competitors.

William Wei
William Wei
William Wei teaches history at the University of Colorado in Boulder. He says Chinese immigrants were not treated well. They had to live together in poor neighborhoods, or do hard work in laundries and restaurants that did not pay very much.

Mr. Wei says the American public did not believe Chinese immigrants could ever be part of their society.

In fact, in 1882 the US Congress approved and the president signed the Chinese Exclusion Act. The law barred Chinese people from moving to the United States and becoming citizens. It was the first and only US law to ban a specific ethnic group.

The US government cancelled the ban during the 1940s after China became an American ally in World War II. Yet the government limited the number of Chinese migrants to just 105 per year. Finally, in 1965, the government ended the system restricting Chinese immigration.
 
Frank Wu
Frank Wu
Frank H. Wu leads the Hastings College of the Law at the University of California. He says the history of Chinese immigrants in the United States helps explain why so many Chinese Americans are well-educated.

“The Chinese people who were able to immigrate were talented, they were students on scholarships, they were people who had great potential,” he says.

Mr. Wu says many Chinese Americans are pleased the American public considers them smart, good citizens who fit well into the country.

But, he adds, even positive stereotypes about Chinese Americans cause problems.

Mr. Wu says the United States includes people of many races, and one race should not be considered better.

He says white Americans may also blame other minorities for not being as successful as the Chinese.

Some Americans say: ‘Look what we did to the Chinese. We discriminated against them, committed violence against them, excluded them from our country, yet they still have achieved. Therefore, if your minority has not succeeded in our land of opportunity, it is clearly your fault.’”

Mr. Wu says such thinking leads people to think victims are responsible for their abuse.

Charles Gallagher of LaSalle University added that all Chinese Americans are not good in school. One who does not succeed as easily may feel he or she does not really belong.

Helen Zia
Helen Zia
Helen Zia is a Chinese American writer. She says US policy makers may believe the Chinese are successful, so the government does not have to help those who are poor or suffering.

And, Ms. Zia says, some people may believe Chinese Americans are too successful

If we are perceived as being able to endure everything,” she says, “it also means that we can be perceived as being able to take over everything.” Read more at VOA.

Thursday, October 16, 2014

Another Chinese Counterfeit Product: Social-Media Followers

Chen Kun, a Chinese actor
Chen Kun is a Chinese actor, singer and heartthrob who has touted products from Johnnie Walker whisky to KFC chicken. He's also a social media master: On Weibo, the Chinese Twitter, he's listed as having 72.5 million followers. Yes, 72.5 million.

Let's pause to ponder that number: That's nearly 12% of China's Internet users. It's more than the population of France. By comparison, Justin Bieber has a mere 50.8 million Twitter fans around the world.

Clearly Mr. Chen, 38, has a huge fan base, but is the 72.5 million number the real deal?

Surely not, say Chinese social-media experts, who treat such numbers with skepticism, partly because China's Weibo population is swollen with fake followers. They're referred to as "zombie fans," and they haunt brands as well as celebs.

So why would anyone buy zombies to unleash on Weibo, which China's Sina Corp. is preparing to spinoff in an initial public offering on the Nasdaq?

Because size matters, obviously.

One Asian ad exec who asked not to be named described buying fake fans to give an ego jolt to a new venture in China. The rate, he said, was about 5 U.S. cents for a zombie that's just a name, and 16 cents for higher-quality fakes with some content on their profiles. In addition to zombie fans, there's a market for faux re-tweets and comments, too.

It's hard to get a clear picture on the exact size of the problem, or how Weibo's fakes compare to those on Twitter. (Twitter said in its initial public offering filing in October that it believed less than 5% of monthly active user accounts were false, though some observers say the figure is higher.)
Weibo influencers and their followers:

Weibo, which says it has 129.1 million monthly active users and that it is committed to fighting faux accounts, hasn't given an estimate of how many there are.

New questions are being raised about how many Weibo accounts are real and truly active, and about how the platform should define active use. A professor at the University of Hong Kong recently found that 10.4 million Weibo users were responsible for around 94% of all messages, while other users just re-shared those messages or never posted anything, according to an article in the South China Morning Post this week.

Rand Han, founder of Shanghai-based social media agency Resonance China, said fake fans may have PR and vanity appeal, but they have a negative impact on community managers and content.

"Generally you'll see accounts that inflate [numbers] also have very poor, irrelevant content, mostly because the mechanism that tells you how good your content is -- new followers, real engagement -- has been broken," Mr. Han said.

Still, agencies can feel pressured to buy them. It's a cycle that Mr. Han describes like this: "A brand wants 1 million followers but also doesn't have the budget, or resources, or any significant assets to achieve this number [organically], and is also tied down by global guidelines," he said. "Then three agencies pitch and the only way they can win is to promise said numbers. One promises, and due to the lack of support, chooses to fake. When the next agency comes in, they have to keep pace with the previous agency. The only way to do this is to also fake."

How do you fix the problem? Through "education, or introducing new metrics, like active and verified rates, to temper expectations," Mr. Han said.

Sam Flemming, founder and CEO of China-based social business intelligence firm CIC, says more brands are "trying to weed out zombie fans or stop the practices leading to zombie fans."


Read more at Adage.com.