What Crypto Projects Can Learn from Luxury Brands when Establishing a Global Presence
Global Coin Research often get approached by projects and crypto companies asking how to build a global presence.
Building a brand globally is difficult, but building it in crypto is especially hard because the pace and direction in which the various regional ecosystems are developing are completely different. For example, in Asia, we see up and coming trends in STOs in Japan, defi and staking in Korea and China, and trading; whereas in the US we see ongoing regulatory conversations and decisions being pushed forward, and further technical development taking place.
When we think about projects going to market globally, one successful business category that’s completely unrelated to crypto, but can potentially be helpful to look to for execution and go to market guidance — luxury brands.
For many folks in the crypto space, brands like Chanel or Burberry may not mean anything, but if you look closely enough, their resemblance to crypto assets are noticeably more than just the visuals.
In fact, there are many similarities. Luxury products are often perceived as store or preservation of value, such as certain types of Birkin bag that can be resold for significantly more price than originally acquired.
Additionally, tokens and blockchains, being inherently digital and abstract in nature, often can appear as a commodity to an uneducated retailer, whom then would rely on marketing, brand messaging and word of mouth storylines to decide on the token of their choice. This is also how a luxury brand differentiates from a lower-price point brand.
As a result, what we found to be extremely useful are the strategies in which these luxury brands adopt and maintain their perceived value and acquire international customers; crypto projects often face similar challenges when growing international crypto communities as they interact with people from all different cultural and language backgrounds.
Some of these brands’ playbook tactics to be so applicable and transferable in crypto, so much so that for the rest of this post, we are just going to share with you an article about luxury goods.
In the article below directly from this SCMP article, we simply takeout the word “luxury brand” and “customers”, and replace them with “crypto projects” and “users.” We literally only adjusted 3 sentences in the entire article to allow the article to flow better, which we highlight in bold, but for the majority, we kept the article the same.
And while this article specifically talks about how to go to market in China, we think the lessons here are equally applicable to many other Asian countries.
The best way for a crypto project to find success in China? Be there
Many projects don’t do so well in the world’s biggest market because they don’t make efforts to localize or to understand the evolving crypto customer base.
Even the briefest study of international crypto user base should turn up clear indications of the power of the Chinese crypto user. China houses the largest mining companies and pools for Bitcoin and Ethereum and accounts for a significant amount of crypto trading. The best-known indicator that any crypto project intent on finding success really needs to have a strategy for finding success in China.
First, there’s the “how?”. You have to think digital. You need to work with KOLs (key opinion leaders), China’s supercharged version of the West’s “influencers”. You have to understand all the apps, platforms, bells and whistles expected by your customers – spread out over the world’s third-largest country, where “small” cities have populations of over 5 million, and big ones have populations of 20 million – each with its own distinct dialect, culture and history.
The sheer size of the market makes the urge to connect with the Chinese crypto users understandable. The “China Opportunity” offers perhaps the greatest potential for profitability that the World has ever seen. Yet for all the savvy marketing campaigns, digital calibrating, consumer targeting and app configuring, one simple fact is often overlooked.
And that’s to do with the “where?”. After speaking to some true China experts, it is apparent that the simplest way to succeed in China – to connect to the consumer and win in business – is to actually be here.
That may sound obvious. Yet, quite often, strategic decisions about doing business in China are being made outside China, by people who have rarely even visited – let alone lived in – the country.
I met up with Barry Lin, general manager of China’s travel booking giant TuNiu, when he was in town visiting ITB China. He said, “In China, everything is about trust, partnerships and knowing each other. What that means is the top people, the leaders of a brand, need to come to China – and for some time. Not just a few days saying hello to people, but for several months – bring your family if you have to. Because from this business sense, it’s not only about ‘how you talk to the Chinese consumer’, the business reality is who will do business with you and who will help you.”
There are still a number of crypto projects operating on decisions made without locally-based expert guidance. This is can be fatal for a number of reasons – and it’s not only on aspects such as strategy and executive decision-making.
Focusing on the question of how a project can connect with the right crypto users and developers, the answer may involve something like finding the cities to go marketing your project and do meetups, selecting the ideal news platform partners, “doing KOLs”, and the like. This is all fine, but we are still talking about business in China – and business in China runs on guanxi. This does not mean that underhand interactions take place; it simply refers to the fact that it’s relationships – long-term and based on mutual trust – that make things tick.
Perhaps your crypto project or company is negotiating a deal with an wallet. Maybe there’s media coverage to be sought. Gaining beneficial outcomes in such instances often depends on the on-the-ground relationships that can turn ad hoc chats into top-down, successful business decisions.
Claire Chung, China general manager of YOOX-Net-A-Porter, told me how companies cannot rely on an overseas HQ making local decisions: “Localisation is a big focus at the YOOX Net-A-Porter Group and China had its own dedicated China plan. We all know of many companies entering and exiting China simply because they replicated the global model and never bothered to localise and truly try to understand the market and its evolving luxury customer base.”
Queennie Yang, editor (Asia) of VOGUE International, also said that one office base cannot support nationwide decisions: “Before you judge anything, please listen to the local experts for their insights and rationale. Spend more time communicating with them, give them more respect. Please remember, China is as big as a continent – it is not only a country with one culture. People in different provinces have various differences. For example, don’t assume that one office or one staff in Hong Kong will be able to well-understand all of China.”
It’s understandable that, because of timeframes and budgets, not every company can open offices across China. If that’s the case, other ways to find local acumen should be considered – perhaps partnering with the right agency, or finding an expert on the ground who can start a personalised recruitment drive, and so on.
Whatever the methodology, if you want to succeed in China, you have to be here in order to understand China in the first place.
So the end takeaway is, think of your project as a luxury brand, how should you go to market then?