Today’s Popsop guest and speaker is a very bright personality with a multicultural background and broad variety of interests and skills. French-born from Serbian parents, he speaks 5 languages including French, English, Mandarin, Russian and Serbian, holds degree in Applied Maths from prestigious Ecole Centrale de Paris and Management Science degree from Shanghai Jiaotong University. This is the man who dared to take a dive into China world back in 2001 and launched a successful brand and research ‘laboratory balancing between rationality and creativity’ there. Now Shanghai-based Labbrand, founded and headed by Vladimir Djurovic, is an internationally recognized brand expert with clients such as ClubMed, L’Oréal, P&G, Disney, Volkswagen, IKEA, Gucci Group, Häagen-Dazs, ING, Nestle, TESCO and many others.
Popsop: Vladimir, why did you choose China? Being French-born with a strong European background, how do you feel and define yourself now after having lived and worked over a decade in a completely new cultural environment?
V.D.: I am French-born and from Serbian parents; but my family was a very traditional Serbian one and I grew up with my mother tongue before going to school in France. I guess I learned to deal with cultural shocks and the necessity to catch up linguistically at a very young age! I think that made the Chinese landing more a pleasurable experience than a stressful challenge.
What is great for many foreigners discovering and living in Shanghai, is that Chinese are not judgmental and this gives a lot of positive energies to try new things and explore. I doubt I would have developed my entrepreneurial spirit that easily if I had stayed in France.
For some aspect of the family life, Serbian and Chinese culture are quite close. For example, the time spent with family and celebrations, which make me feel comfortable with some local paradigm. Yet I feel French and I could not stand to be deprived of the access of French cultural life. The first thing I do when I land in Paris, after eating croissants, is to go to a bookstore and immerse in the flow of new publications and topics that are driving the cultural discussion. I stay surprisingly proud of Serbia like a heritage that is very specific and fragile (especially when I watch tennis and success of sportsmen like Djokovic). I like to spend some holiday time every year in Serbia and Montenegro.
Popsop: To understand the culture well means to speak the language of the country. Was it difficult to learn the Mandarin tonal language?
V.D.: Chinese is extremely difficult but it is very captivating. When I started learning it as my 3rd foreign language during my studies in France, my roommate could not bear my intensive Chinese pronunciation practicing and eventually left.
I think it is very important to learn Chinese by studying the evolution of its script and anchor your knowledge of characters in more pictorial forms that inspired them. It is helpful to have a visual memory to learn Chinese. But, it is true that to speak Mandarin you need to master tones. I tend to mix some tones, even after 10 years, but I have noticed that it goes smoother after a beer.
Popsop: You’ve constantly lived in China since you founded Labbrand in 2005, is that correct? How did China evolve and change over years? What is the ‘modern China’ today?
V.D.: I have been living in China since 2001 and we can certainly assert that China has grown more confident. Chinese spirit and vigor has not change, but Chinese have experienced a lot more. We can say that in the last decade, China has digested a lot of foreign content and learned the codes. Now China is confident to put forward some of its own: we can see that in the mastership of forms and expressions in recent work of Chinese designer. They have matured to a stage of adolescence and early adult stage.
Economically, it was golden years for all Chinese; the first signs that this is ending is that people started to have a more establish view of classes. It is not that easy to move up the ladder. The opportunities are there but the gap between people has grown to a size that is not easy to stride. China is a unique example that accepts the emergence of quite secluded areas for very rich Chinese in Villa towns, yet you still see the cohabitation of very different socio profile in the same street without creating any tension or conflict.
The current humanizing trend in technology is taking off in China on a consumer level at all ages, from an industrial perspective; big cities from west China are specializing in High tech to take advantage of their excellent school system and relative competitiveness of cost of labor.
Photo: Labbrand’s office
Popsop: Now onto business. What’s striking about Labbrand, what makes the company processes different from most Russian or UK brand consultancies is a scientific approach to delivering research services to clients. Tell us more about this specific approach.
V.D.: Some clients call us just LAB and it is not a coincidence. Instead of being labeled as creative, we prefer to be called innovators and intricate problem solvers. We like challenges. The roots for this aspect of our brand identity lay maybe in the fact that I studied Applied Maths and Management Science at university! I am an outsider to the industry, yet, and the beauty of working in China is that this was a force, our clients were also learning. Our more pedagogical and systematic approach was appreciated. More importantly today, I think we should say that we are structuralist: we look for underlying cultural structural in a very meticulous way so that we can put order in sometimes quite random creative spaces. Recently we undertook for one of our client a cultural decoding of what gifting is in Asia: it spun off the launch of new products to target this segment of their market whereas their previous approach get them stalled for more than 2 years!
This is what characterizes us: any brand issues can benefit from a deep understanding of the category and country culture or even the target group subculture. We have a dedicated team that conducts consumer research from research conception to fieldwork organization and analysis. We are a brand consultancy with a research team tightly attached.
Yet we are not stiff about it and like to play around this aspect of our identity: our opening party for the expanded office last year featured white blouses and a crazy lab decoration.
Popsop: What are your typical client enquiries? Are they mostly research and localization services for international brands which try to enter the local Chinese market?
V.D.: Our typical inquiry is the creation of a new brand from the research of the white spot or market gaps to the development of brands’ core idea and its expression. Also, we work on the creation of a name and logo for existing brands entering the market or new brands specially designed for China. Our clients come from all continents but we have a majority of American and European clients that want to firmly anchor their brands in China.
Popsop: How did the economic recession of 2008 and its consequences influence your business? I suppose that demand for the research and strategy development services for such an attractive ‘developing’ Chinese market has only increased over past two years. Is that correct?
V.D.: There are a number of favorable factors at the moment regarding the brand consulting industry in China. One is that China is one of the biggest markets and one with the more important growth almost in any sector. But this alone will not be enough if there was not a current saturation of the market that requires more thoughtful brand strategy.
Photo: The Labbrand team
Popsop: There is a marketing stereotype, most common in some developed countries that China, being the biggest so-called BRIC country with the largest number of population is a paradise for global consumer brands, which are expanding on the new markets. Do you think it’s true? And what should global marketers be aware of entering China?
V.D.: The old paradigm of speed that was the winning formula for emerging countries is not enough.Many consumer brands just excelled in being quick and were quite lucky to see their lack of market understanding masked by the market growth. Now things have changed — automotive industry has been the last one to witness it, going from triple figure growth to a mere double digit growth- you also need to outplay competitors in the cultural space. It is only the beginning and the trend has been overly positive despite the global crisis. We do not see the end of this trend for the next 2 decades — I know, I am not a pessimist!
Popsop: As some international research and consulting firms predict (BCG, for example), the fashion and luxury markets in China are set to grow in the next decade, as consumer confidence and readiness to spend more while the income remains the same, rises? Can you, looking from inside, argue for or against of that trend?
V.D.: Fashion and luxury markets are set to continue to grow; I agree with the reasons (growing consumer confidence and readiness to spend more). Luxury consumption is still relatively low in hundreds of relatively small provincial cities (about 1 Million) and there is a large room for expansion of luxury brands in China.
Popsop: Let’s bring up the localization topic. Do you know any examples of brilliantly localized marketing strategy of a global brand in China? Some recent case? And, vv, what was the most unsuccessful launch/merger/etc over recent past years? Why?
V.D.: Any foreign brand that has managed to establish a lasting presence for more than a couple of years has undertaken localization steps. But some brands may really have dramatic change in their positioning. Let’s just consider the examples of Haagen Dazs and KFC—both involved in food business where culture differences are especially strong.
Haagen Dazs stores in China are a venue for romantic dates and are very premium. Also a considerable part of Haagen Dazs business is linked with local celebration. For example their ice cream moon cake developed specially for China is a best seller gift item (moon cakes are eaten during the Mid-Autumn Festival).
In 2004, KFC introduced East Dawning (东方既白), a Chinese-food quick-service restaurant created exclusively for China. Creating a new brand can also be a unique strategy for market localization.
Photo: East Dawning (东方既白) interior
Popsop: As to the Internet censorship in China. It is known to be among the most stringent in the world. Has this politically sensitive situation any changed? What’s the environment for development of the new online media, smm and e-commerce businesses in China nowadays? How is this situation influencing the online/digital marketing strategies of both local and global brands in the country?
V.D.: In China media are controlled by the state. Large numbers of blogs and social media have contributed to the emergence of less controlled voice, yet even this new space is monitored. For example, recently the very successful Weibo (it is a kind of Chinese enhanced Twitter) has requested identification numbers to open new accounts. With this said, the development of the digital space is not slowed down by this environment. In the past years and months, digital businesses are flourishing and it seems to be just the beginning of a lasting trend. Actually, the digital strategies are the current focus of local and global brands, starting with the very pragmatic topic of e-commerce. It has appeared that even luxury products will benefit greatly from this channel and dedicated e-commerce for luxury items is just booming. The recent launch of Tmall by Alibaba as a B2C platform with higher fees for vendors illustrates this growing need for a more sophisticated space (their previous model required very little fee and resulted in mixed sellers).
Popsop: It is actively discussed and highly predicted in the so-called ‘Western world’ that the USA and Europe might lose their economic, financial and technological leadership in the course of a couple of years so that the Asian world (Russia, China, India, Middle East) would be the new innovative power which pushes the human race forward. Do you agree? Do you believe that the East may be the next ‘birth place’ for some new powerful globally known superbrands?
V.D.: We can already bet on some future global superbrands from the emergent economic powers; for instance, Haier, LiNing, Huawei, and Havaians. The list will grow longer and more diversified. It is likely that many will come from China which has a huge internal market where the brands will be able to refine their strategies and gain competencies (marketing etc..) that will be needed for global expansion.
This trend is still nascent—we just see the premises of it – and to my opinion it will become really strong after 2015 and keep strong for one or two decades. We can imagine that a third or half of superbrands will be Chinese, Brazilian, Russian, Indian in 20 years from now.
Popsop: Here is the last fun optional question; you may skip it, if you don’t feel like responding. What was the most confusing and ridiculous situation while working with a client?
V.D.: Really, I may have done a great job erasing them from my memory but I cannot think of anything really ridiculous. I think the main reason is that we are very candid and transparent: being located in the interstice of cultures we are used to anticipate situations that are sliding in the wrong direction and to be patient with some client that are not familiar with China but maybe anchored in a somewhat narrower view of the Chinese realm.