Hangzhou-based toy firm Dodo Sugar, pictured right here on the Pop Toy Present in Singapore on Aug. 23, 2024, is increasing to Thailand and different elements of Southeast Asia.
CNBC | Sonia Heng
Chinese language client manufacturers are utilizing Singapore as a cultural testbed of their quest to broaden globally, due to the city-state’s distinctive mix of Asian and Western cultures.
In August alone, Chinese language tea model Chagee opened three shops in Singapore. Pop Mart, a Beijing-based retailer of collectible toys, wrapped up its second annual toy present on the island late final month with over 50 artists.
Whereas Chinese language corporations have lengthy toyed with world ambitions, their newest technique includes a concerted effort to succeed in Southeast Asia through Singapore.
“Singapore is a spot we name it like the place east meets west, proper? So for Chinese language corporations, in the event that they wish to go abroad, I feel Singapore is a pleasant center floor,” mentioned Xiaofeng Wang, principal analyst at world market analysis firm Forrester.
Pop Mart’s executives are contemplating establishing a global headquarters in Singapore, Jeremy Lee, Go-to-Market Director of Southeast Asia at Pop Mart Worldwide, advised CNBC on the sidelines of the Pop Toy present in late August.
“If there’s something they [Pop Mart’s executives] wish to launch in Southeast Asia, something they wish to begin or whether or not it really works, [Singapore] is an efficient testbed to start out … to shortly take a look at whether or not the thought works or not, after which form of high-quality tune from there,” mentioned Lee.
Pop Mart sells its merchandise in 30 international locations through on-line or bodily shops, in keeping with its web site. Its abroad first-half gross sales grew by 260% yr on yr to 1.35 billion yuan ($189.90 million). That helped enhance general gross sales development by greater than 60%, regardless of China’s slowing economic system.
Embracing ‘China id’
After many years of simply manufacturing Western merchandise, Chinese language corporations are more and more launching their very own manufacturers.
The brand new technology of Chinese language manufacturers are completely different — they don’t seem to be making an attempt to cover their “China id,” mentioned Forrester’s Wang.
As a substitute, the brand new manufacturers are embracing their cultural id, utilizing homegrown characters and designs to enter abroad markets the place they then stand out from the competitors, she mentioned. That “provides them a singular benefit.”
Considered one of tea model Chagee’s signature seems to be is a cup and take-away bag design that evokes magnificence just like a well-liked Christian Dior tote. However the firm’s title and merchandise in Chinese language draw on a standard Chinese language opera. Chagee can also be a shorthand model of its authentic title in Mandarin Chinese language, pronounced “bawang chaji.”
The brand new immediately owned Chagee shops are a part of the tea model’s revamped effort to sort out Singapore — as a “launchpad” for tapping the huge potential of the Southeast Asia area, and ultimately the remainder of the world, mentioned Lu Mian, Chagee’s managing director and head of world markets operation.
“Within the subsequent 5 years, Chagee will probably be focusing its enlargement efforts throughout eight international locations, particularly Singapore, Malaysia, Thailand, Indonesia, Vietnam, Philippines, Japan and Korea, with the SEA nations being the precedence,” Lu advised CNBC.
Chagee established its Asia-Pacific headquarters in Singapore in 2023 and is increasing its Southeast Asia staff, though the corporate didn’t share by how many individuals.
Embracing the Chinese language id has been working for a few of these corporations, together with the smaller Chinese language toy companies that joined the Pop Toy present in Singapore final month to launch unique toys.
As an example, a newly launched stuffed toy from Hidden Wooo — a three-year-old Chinese language model — had been snapped up by holders of the $129 early hen tickets, hours earlier than the present opened to the general public on Aug. 23.
However there are additionally those that discover it difficult to promote their wares due to cultural underpinnings, regardless of Singapore’s mixture of Chinese language, English and Southeast Asian cultures
Hangzhou-based Dodo Sugar, which attended the Pop Toy present, mentioned it may be tough to convey the idea behind their merchandise to a global viewers because the designs are sometimes rooted in Chinese language tradition or tales.
The corporate nonetheless has plans to broaden to Singapore and Thailand through native partnerships to arrange shops in buying malls, whereas attending extra occasions just like the Pop Toy Present to advertise their toys.
Navigating challenges
Xiamen-based HeyCiao, which assists Chinese language companies with enterprise operations, together with on-line gross sales, advised CNBC that whereas the Chinese language market focuses on “cute” kinds, the extra various Singapore market embraces cool and various designs.
In addition to some aesthetic challenges, Chinese language companies have additionally encountered enterprise technique and operational points in Singapore.
Earlier this yr, Chagee needed to finish a five-year effort to enter the market with a neighborhood franchise companion. Now the corporate is targeted on immediately owned shops.
Chinese language corporations additionally have to pivot from, for instance, WeChat, to YouTube and Fb, mentioned Pop Mart’s Lee.
“We all know that in China, a few of their ecosystems will probably be fairly closed … They’ll work inside China, however it might not work outdoors … it is a complete completely different set of apps altogether.”
Pop Mart mentioned it was increasing its e-commerce presence through platforms such Shopee, Lazada and Tiktok Store.
The ByteDance-owned TikTok platform goes to be a “big channel” for Pop Mart, Lee mentioned.
TikTok Store can also be just like its Douyin counterpart in China, creating a well-known infrastructure for Chinese language corporations that wish to broaden abroad. The video-sharing social media app has arrange its Asian headquarters in Singapore. Its different headquarters are in Los Angeles.
The strain on Chinese language corporations to double-down on Singapore and different abroad markets will probably solely develop.
Different Chinese language client corporations are additionally reaching out to Singapore for world enlargement. JD.com, which has been slower than its friends to broaden into cross-border e-commerce, introduced final week that it had enhanced transport and supply choices to Singapore.
Forrester’s Wang believes that as China’s financial development slows, the speed of world enlargement for Chinese language corporations will inevitably improve, pushed by the necessity to search larger development and earnings in abroad markets.
—CNBC’s Evelyn Cheng contributed to this report.