Top 5 Marketing Lessons from China February 2025
February has seen a mix of wins, losses and blunders for foreign brands in China. With the landscape ever evolving, here are some of the top marketing lessons from China, February 2025.
Lesson 1: China’s Car Boom & Tesla Playing with Fire.
Tesla sues customers; consumers protest in retaliation. Image source: electrek
China’s automobile industry is experiencing unprecedented growth, with domestic manufacturers expanding aggressively into both electric and gasoline-powered markets. In 2024, Chinese manufacturers delivered 22.9 million vehicles, a 5.5% increase from the previous year. A significant driver of this growth is the rapid decline in the cost of autonomous driving technology. This year, an estimated 15 million new Chinese cars will feature at least Level 2 (L2) self-driving capabilities, making advanced driver-assistance systems (ADAS) more accessible, even in budget-friendly models priced under ¥100,000 ($13,914).
Chinese automakers are also making major inroads into the Global South, where demand for affordable vehicles remains high. In 2023, China exported 4.7 million cars, tripling the volume from three years earlier. Although electric vehicle (EV) sales are rising, the bulk of these exports are still petrol-powered, highlighting China’s dominance in the global automobile supply chain. With a vast production capacity operating at only 60%, China has the potential to further disrupt international markets.
Meanwhile, Tesla’s reputation in China is under scrutiny due to its legal battles against dissatisfied customers. The company has sued multiple car owners and journalists for defamation after complaints about vehicle malfunctions. While Tesla has benefited from strong government support, its aggressive legal tactics could alienate Chinese consumers, potentially opening the door for domestic competitors like BYD to capture more market share.
Key Lessons for Foreign Brands:
Affordability and Technological Advancement Drive Success
The rapid decline in autonomous driving costs and the surge of budget-friendly EVs highlight the importance of balancing innovation with affordability. Chinese consumers increasingly expect cutting-edge technology, even in lower-priced models. Foreign brands must adapt by either offering competitive pricing or delivering superior technological to maintain relevance.Government Relations Are a Double-Edged Sword
Tesla’s success in China has been largely due to government support, but its legal battles with consumers highlight the risks of over-reliance on political favour. Foreign companies must engage with regulators strategically while also maintaining strong consumer trust. An honest approach to customer concerns and legal disputes is crucial to avoiding reputational damageConsumer Trust and Reputation Matter More Than Ever
Tesla’s aggressive legal actions against unhappy customers and journalists have sparked backlash and risk damaging its brand image. In China’s highly competitive and consumer-driven market, maintaining reputation is essential. Mishandling public relations or dismissing consumer concerns can invoke the ire of millions online and quickly erode market standing. Tesla has a lot to lose, selling 657,000 cars in China last year, 8.8% more than 2023.
Lesson 2: Consumer Loyalty in China in Flux.
Consumer loyalty is changing in China. Image source: Jing Daily
Tesla’s lawsuits against dissatisfied customers in China highlight the risks of damaging consumer trust. As Chinese consumers become more value-driven and research-oriented, brand loyalty is shifting, forcing companies to rethink their engagement strategies.
Recent studies show that Chinese consumers now purchase 25% more brands across multiple categories than they did four years ago, reflecting a growing willingness to explore alternatives. The likelihood of switching brands is highest in apparel (18%), followed by food and beverages (12%) and beauty/cosmetics (9%). However, some categories maintain stronger loyalty—health products (6%) and luxury goods (4%) continue to see stable consumer retention.
Shopping habits also vary by sector, with travel (82%) and entertainment (76%) having the highest online penetration, while traditional retail remains dominant for wines and spirits. Meanwhile, affluent seniors in Tier 2 cities stand out as a loyal consumer segment, particularly in health-related and premium clothing purchases.
Economic uncertainty is accelerating this shift, as consumers increasingly prioritize quality over brand reputation. With the willingness index to "spend on product quality rather than brand reputation" rising from 66 in 2022 to 81 in 2024, brands must focus on transparency, competitive pricing, and engaging customer experiences to maintain consumer trust and long-term loyalty.
Key Lessons for Foreign Brands:
Adapt to Evolving Brand Loyalty Trends
Chinese consumers are increasingly open to exploring multiple brands, with brand switching rates reaching 18% in apparel, 12% in food and beverages, and 9% in beauty. This shift means foreign brands cannot rely solely on past reputation; instead, they must continuously engage consumers with competitive pricing, strong customer experiences, and localised marketing strategies.Price Sensitivity and Value-Driven Consumers
Chinese consumers are becoming more pragmatic, with a rising willingness to prioritise product quality over brand reputation (81 in Q1 2024, up from 66 in 2022). This shift demands competitive pricing, clear value propositions, and strong after-sales support.Diverse Consumer Segments Require Tailored Strategies
Different demographics display varying loyalty patterns. Affluent seniors in Tier 2 cities show strong loyalty to premium health and fashion products, while younger consumers are more inclined to explore multiple brands. Brands must adapt their approach to each segment, providing targeted value, as reputation alone no longer guarantees brand stickiness.
Lesson 3: Leveraging Valentine’s Day to Strengthen Consumer Engagement.
Cartier boost conversion rates with complimentary and digital services. Image source: Jinjin Cai
As Chinese consumers become more selective, brands are using Valentine’s Day as a strategic opportunity to reinforce loyalty and attract new buyers. The evolving gifting landscape, influenced by shifting brand loyalty trends, has led to a surge in innovative marketing approaches.
One of the most surprising trends this year was the boom in gold jewellery, with sales skyrocketing 445% year-on-year. Young couples increasingly viewed gold as both a romantic and practical gift, replacing traditional luxury items like handbags and cosmetics. The 12% price increase in gold jewellery at major retailers did little to deter demand, signaling a growing preference for valuable, lasting gifts.
Luxury brands also capitalized on Valentine’s Day by launching limited editions and enhancing digital services. Cartier’s complimentary engraving services and AR try-on functions on WeChat boosted conversion rates by 35%. Dior’s seamless integration of online and offline data further solidified customer engagement. With 60% of consumers willing to pay extra for exclusive festival editions, brands are leveraging scarcity and personalization to drive sales.
Meanwhile, China’s instant retail boom fueled a 66% surge in wine sales, particularly among younger consumers seeking celebratory experiences. As China’s gifting market is set to reach ¥1.62 trillion by 2027, brands must continue innovating to capture consumer sentiment.
Key Lessons for Foreign Brands:
Leverage Festivals for Strategic Consumer Engagement
Valentine’s Day and other holidays present valuable opportunities for brands to drive sales and enhance consumer loyalty. Offering limited-edition products, exclusive packaging, or personalised services—such as Cartier’s complimentary engravings—can create a sense of exclusivity that resonates with Chinese consumers (60% are willing to pay extra for festival-exclusive editions).Digital Innovation is Key to Success
The success of augmented reality (AR) try-on features, as seen with Cartier’s 35% conversion rate increase, highlights the importance of integrating digital tools into the shopping experience. Brands should invest in WeChat mini-programs, e-commerce integrations, and omnichannel strategies to enhance customer engagement and increase conversions.Adapt to Changing Consumer Preferences
The rise of gold jewellery over traditional luxury gifts and the 66% surge in wine sales show how Chinese consumers are shifting priorities. Brands must stay agile, analysing emerging trends to adjust their offerings. With China’s gifting market projected to reach ¥1.62 trillion by 2027, aligning products with evolving consumer sentiment will be key to long-term success.
Lesson 4: Demand for Quality Meat Up, Yet So are Rejections at the Border.
Increased demand for quality meat in China. Image by Chupanh.vn Studio from Pixabay
China’s appetite for meat continues to grow, reshaping both domestic production and global supply chains. With an average daily protein intake of 124.6 grams per person—surpassing even the United States—China now accounts for nearly one-third of global meat consumption. As domestic production struggles to meet demand, meat imports have surged, reaching 6.67 million tonnes in 2024.
This rising demand is not just about quantity but also quality. Consumers, especially the expanding middle class, are shifting towards premium meat products such as organic, grass-fed, antibiotic-free, and hormone-free options. The China meat market, currently valued at $83.68 billion, is projected to reach $258.2 billion by 2030, growing at a staggering 20.7% CAGR. Additionally, online meat sales are expanding, reflecting broader e-commerce trends.
However, foreign suppliers face increasing scrutiny. Meat import rejections at Chinese borders spiked to 778 shipments in 2024—more than triple the previous year—highlighting strict regulatory controls. Beef and pork were the most affected. While China offers lucrative opportunities for high-quality meat providers, exporters must prioritize compliance with safety standards and adapt to evolving consumer preferences to succeed in this rapidly transforming market.
Key Lessons for Foreign Meat Suppliers:
Quality Over Quantity – Chinese consumers are becoming more discerning, driving demand for premium, organic, grass-fed, and antibiotic-free meats. Foreign suppliers need to focus on quality and what makes their product quality, particularly in comparison to lower cost, bulk producers.
Regulatory Compliance is Critical – With a record 778 meat shipments rejected in 2024, China’s import regulations are becoming stricter. Foreign exporters must ensure adherence to safety, labelling, and quality standards to avoid costly rejections at the border.
E-commerce and Digital Sales Are Key Growth Channels – The rapid expansion of online meat sales presents a significant opportunity. Foreign brands should leverage e-commerce platforms and digital marketing strategies to reach China’s growing middle-class consumers, particularly in second- and third-tier cities where online shopping is booming.
Lesson 5: Foreign Films Make Comeback, But Domestic Films Resonate & Dominate.
Chinese storytelling resonates more at the box office. Image: Ne Zha 2
China’s film industry is experiencing a complex recovery, with foreign films making a comeback while domestic productions, like Ne Zha 2, continue to dominate. In 2024, China released 93 imported films, the highest number since 2019, signaling a renewed willingness to embrace Hollywood. However, despite their best box office share since the pandemic, foreign films still only accounted for 21% of total earnings in a market struggling with a decade-low slump in ticket sales.
Meanwhile, Ne Zha 2 has shattered records, crossing $1.7 billion within three weeks and surpassing Inside Out 2 as the highest-grossing animated film of all time. Unlike its Western counterparts, Ne Zha 2 achieved this almost entirely through Chinese audiences, highlighting the strength of locally resonant content. Themes of courage, self-determination, and family loyalty struck a deep chord, especially among younger viewers navigating societal pressures.
For foreign studios, the success of Ne Zha 2 underscores the power of cultural connection. Movies that integrate Chinese heritage with modern storytelling have a stronger chance of engaging audiences. Furthermore, merchandising and themed tourism, which Ne Zha 2 has fuelled, present additional revenue streams for brands seeking to tap into China’s evolving entertainment landscape.
Key Lessons for Foreign Brands:
Cultural Relevance Drives Success
The overwhelming success of Ne Zha 2 highlights the importance of culturally resonant content. Chinese audiences connect deeply with films that reflect their heritage, values, and modern aspirations. Foreign brands should leverage Chinese cultural elements into their marketing, product design, and storytelling to establish a stronger emotional connection with today’s consumers.Merchandising and Cross-Industry Collaborations Create Additional Revenue Streams
The Ne Zha 2 phenomenon extends beyond the box office, fueling demand for merchandise, collectibles, and cultural tourism. Pop Mart’s Ne Zha 2 blind boxes sold out instantly, and themed tourism promotions followed. Foreign brands can leverage this trend by collaborating with popular IPs, launching exclusive limited editions, or cross-industry partnerships to maximise brand visibility.High-Quality Storytelling is Essential
China’s visually driven digital landscape demands immersive, well-crafted narratives to hold onto consumer attention. With short videos, livestreams, and social media playing a huge role in consumer engagement, foreign brands should invest in visually compelling content tailored for Chinese platforms, whether that be advertising, interactive experiences, or digital storytelling.
