Cracking the cross border conundrum

More and more global companies are looking to Asia broadly, and China in particular, for continued market growth. At the same time, recent Chinese governmental changes in cross-border e-commerce now allow brands greater opportunity to tap online consumers. In late 2018, The Silk Initiative and hooplaGlobal saw significant opportunities for foreign brands to expand their presence in the China e-commerce world given these regulatory movements which effectively encourage more players to enter the space.

From Stressful to Seamless

To capitalize on the burgeoning e-commerce space in China, the two companies formed an alliance to provide global brand owners with the ability to execute seamless cross-border trade into the mainland. Typically, cross-border trade in China is fraught with regulatory hurdles and difficulties in shipping, warehousing, and distribution. The TSI/hooplaGlobal alliance will streamline this process through an innovative combination of freight tracking, data monitoring, buyer engagement, and rapid product development.

hooplaGlobal takes care of international trade and logistics, while TSI handles insights and innovation.

Using Data to Extend a Brand Portfolio

To test the potential of the alliance, TSI and hooplaGlobal engaged in a three-month study to trigger consumers and ideate an entirely new line extension for a brand currently engaging in cross-border sales.

Once Again, an American company offering organic peanut butter and vegan-friendly nut butter, had been using cross-border e-commerce to sell to Chinese consumers. Using hooplaGlobal data, TSI was able to track where products were selling best on the mainland. The TSI innovation team, using their expert understanding of snacking trends in China, then developed a set of ideas on how to take the brand's current equities and develop line extensions. These ideas were then put to consumers for feedback, using an appropriate survey to engage these consumers directly.

Our goal in engaging consumers was to test their acceptance of potential Once Again product line extensions. Through an SMS-enabled survey, TSI tracked responses to four new fictitious products and the rationale for adoption.

What We Found Out

Through our market knowledge and consumer feedback, we were able to track a number of interesting findings.

Finding #1: Consumers overwhelmingly preferred "mini toasts" as an extension of the brand.

Finding #2: Regardless of the new product, formats must be in line with foreign format perceptions among Chinese consumers. While most respondents preferred English-language packaging, there was one product recommendation where they wanted Chinese instead.

This might be the case as certain cues could be so familiar with Chinese consumers, the pack format appears more domestic than foreign. Note the similarities between the cashew butter cookie bite's packaging and the third package below.

Finding #3: Innovation can provide brands with new roles for their products, which in turn extends overall product positioning in the market.

Our Final Recommendation

By using consumer-centric trend mapping, real-time data, predictive modeling, and rapid ideation, TSI was able to provide Once Again with the new product extension most likely to succeed in the competitive China market. While the mini toasts were the most preferred extension of the brand, almond butter balance bars performed better on the whole.

What This Bit of Research Shows

Overall, this piece of research demonstrates the possibility of innovating and speeding up the R&D process for foreign brands operating in China. A chief complaint we hear at TSI is how fast Chinese companies are at development, and how much this is disrupting foreign competitiveness. By combining data, consumer-centric trend mapping, and rapid ideation, along with speed to market, the new TSI/hooplaGlobal alliance will surely help brands tackle the Chinese market as it continues to develop.