Purpose in China: Consumers Expect Localized Purpose

CHINESE CONSUMERS EXPECT LOCALIZED PURPOSE, BUT BUSINESS PROFESSIONALS ARE NOT PREPARED TO DELIVER, FINDS WE RED BRIDGE STUDY

ONLY 16 PERCENT OF EXECUTIVES SAY THEY ARE EQUIPPED TO EXERCISE PURPOSE

SHANGHAI — 24 OCTOBER 2019 – WE Red Bridge, a leading communications agency in China, today released its Purpose in China study findings. The first of its kind research for the market, the study reveals an emerging trend: The demand for brands in China to deliver on purpose, as well as product function, is on the rise with Chinese consumers. More critically, although there is an acknowledged need amongst business professionals to align to a purpose, brands are falling behind on delivery.

“While leading with purpose has been a philosophy widely adopted in other markets around the world, pragmatic Chinese consumers are only now putting it on par with function and innovation,” said Penny Burgess, CEO of WE Red Bridge. “It’s a pivotal moment for companies operating in China to get ahead of a shift in consumer mindset — a good product alone is no longer enough. They must learn to clearly define why they do what they do in China to remain relevant to their customer base.”

Undertaken in partnership with Kaleido Insight, the new study set out to understand business leaders’ views and understanding of purpose strategies, and the barriers for leading with purpose in China. Here are the four key findings:

Role of a Purpose Strategy in China

As the West has been fast to respond to public calls for increased purpose, Chinese business professionals also recognize the need for brands to evolve their role in society. The majority of business professionals agree that the onus is on brands to be the primary force driving social change, compared to Government and grassroots efforts.

Respondents also believe purpose can benefit every aspect of business operation and strategy, but the strongest benefits are still around reputation building. These included corporate social reputation (75 percent), brand differentiation (70 percent) and customer loyalty (70 percent).

Urgency for Defining Purpose

WE’s previously released global research, Brands in Motion, also supports this growing trend in China. The Brands in Motion study found that consumer expectations only continue to grow, especially in China where expectations are at their highest and consumers are at their most vocal if a brand steps out of line.

“Chinese consumers’ expectations from brands continue to rise as the market becomes ever more sophisticated,” said Maho Saito, Head of Corporate and Healthcare at WE Red Bridge. “More than ever, companies must define their role in China, for China, if they hope for long-term customer loyalty.”

Although sustainability is now widely adopted across China, the public is pressing brands for further changes in how they operate, with a focus on addressing local issues. When asked about where they would like to see brands take action on environmental issues, nearly half (49 percent) of respondents in China said brands should focus on making local communities better, while a further 39 percent said both local and global issues.

This urgency is echoed in the Purpose in China study’s findings, where 72 percent of respondents agree that the current political and social trends are pushing brands to define their purpose. 89 percent believe it is an urgent task to have a clearly defined purpose, and 100 percent say it is important for a company to own its purpose.

Barriers in Acting on Purpose

Despite acknowledging the upsides and importance of purpose, companies’ prioritization of purpose is still in its infancy in China. The impetus for brands to catch up with the sophistication of Chinese consumer demand is intensifying, and the lack of understanding around purpose is strongly recognized amongst business professionals. Sixty-two percent indicate they do not have a clear understanding of what purpose is and how to become a purpose-led organization. When it came to execution, only 16 percent strongly agree they are equipped to help the company exercise its purpose.

Additionally, purpose is still not viewed as a strategic priority in organizations. Although the majority of respondents (73 percent) agreed purpose will become as important as financial performance for brands, conversely more than half (60 percent) responded that purpose will not be prioritized at the sacrifice of profits.

Leading with Purpose in China

Purpose is the higher-order goal that goes beyond short-term self-interest and an organization’s communication strategy, to how it conducts its core business, engages with stakeholders and leaves its footprint in society. The study revealed there is no one-size-fits-all approach, but a successful purpose strategy should show high adaptation to developing brand stages and competitive landscapes.

WE Red Bridge’s study also uncovered that brands should consider the 4Bs when developing their purpose strategy: be relevant, be the solution, be flexible and be focused.

“In its broadest context, purpose is the why. It is why an organization exists and why it does what it does: its mission, vision and motivation,” Burgess said. “China is fast-changing, and to win customer loyalty, brands need to define their role and contribution to the market — state their relevancy essentially — to meet these evolving expectations. For a company to succeed in China, finding its purpose and utilizing it as a business strategy is now crucial.”

ABOUT OUR PURPOSE IN CHINA STUDY

WE Red Bridge partnered with Kaleido Insight, a brand strategy research consultancy, to explore how business leaders in China perceive Purpose as a business strategy. Data was collected through 26 in-depth interviews with academics and management and C-suite leaders across corporations and nonprofit organizations as well as over 160 quantitative surveys of management and C-suite leaders.

ABOUT WE RED BRIDGE

WE Red Bridge is an award-winning, integrated communications consultancy, born through the merging of two leading independent purpose-led agencies that shared a single common goal: to use the power of communication to move people to positive change.

Providing integrated consumer, technology and healthcare sector expertise, we work as business partners to our clients to think ahead, challenge the status quo and deliver tangible business results. Our strength is working with first-mover brands seeking to define an industry category, those leading the way through technological and social innovation, and the mavericks, our kindred spirits, who dare to challenge convention.

With offices in Shanghai and Beijing, plus access to a network of offices in over 18 countries, WE Red Bridge provides clients in China with an alternative — a connected independent consultancy, local in its focus, creative in its approach and international in its thinking.

ABOUT WE

WE is an integrated communications agency that lives at the intersection of people, brands and technology. Female-founded, female-led and fiercely independent, WE has spent more than three decades helping world-class brands in motion tell transformative stories that shift perceptions and drive people to positive action. Our independent spirit keeps us nimble. Our obsession with cutting-edge keeps us current. And our cross-capability partnerships in the PLUS network help keep us delivering wins for clients no matter what the RFP calls for.

One of the largest independent communications agencies in the world, WE shapes stories for global brands like Microsoft, Honeywell, McDonald’s, iRobot and Volvo. Our 24 global offices are staffed with storytellers and strategists, data scientists and disruptors — more than 1,000 experts in the technology, health and consumer sectors. Our work has been recognized with Cannes Lions, the Holmes Report SABRE Awards and PRWeek Awards, just to name a few.

For more information, press only: JJ Minder, WE, jminder@we-worldwide.com