Exploring value co-creation and brand loyalty in online communities in China.
Published: 21.12.2022 / Blog / Publication / Research
China is home to the world’s largest digital society, with 1.02 billion people in the country legally recognised as netizens (Koetse, What’s on Weibo, 2018). For brands from the Rest of the World (RoW), it equals an invaluable resource: hundreds of millions of hyper-adaptive and hyper-adoptive consumers who have lived through unprecedented change and who make their country globally competitive today (Dychtwald, Harvard Business Review, 2021). To successfully build brand awareness and loyalty in China, foreign businesses need to become fluent in a finely integrated web of digital products immersed in an independent ecosystem—instead of ‘FAANG’ (Facebook, Amazon, Apple, Netflix and Google), Chinese consumers turn to the ‘BATs’ (Baidu, Alibaba and Tencent).
There has been a call for a better understanding of how RoW companies can keep up with the dynamic Chinese market and grasp the needs of consumers and businesses alike. Existing literature calls on using consumers’ needs as an engine for product development and digital transformation. Online communities provide an excellent opportunity to get such an “outside-in perspective”, with brand managers and community participants becoming equal players on social media. As prior research focused on either RoW markets or—if in China—only on consumer brands, and my professional background was in Chinese marketing, I attempted to gain insights into how Western Business-to-Business brands can use online brand communities for generating value co-creation and brand loyalty in China. Additionally, as existing papers on the topic mostly followed the netnographic approach, I chose to look at the issue from the managerial perspective. Taking advantage of the case study approach (Kathleen Eisenhardt, 1989), I dived into the local context and built cases based on insights from seven experienced professionals working for RoW corporations in China. The process involved online-based semi-constructed interviews which were later cross-searched for similar and emerging patterns, and compared with hypotheses built on the existing literature.
The results confirmed that communities play an essential role for Western brands who want to gain insights into their customers’ needs, drive product development and build customer loyalty. One of the key findings is that the definition of a brand community is broader than assumed based on the existing theoretical knowledge. They are not limited to virtual settings, but allow for the co-creation of a brand in multiple physical and online dimensions. Moreover, empirical evidence implies that the brand communities are built around existing customers of the brand, rather than the non-paying participants. Therefore, the objective of running a brand community is to support customer relationships, cultivate loyalty towards the brand and allow for customer advocacy. In many cases, becoming a member of the community was an inseparable part of being the brand’s customer. Not only because it helped maximise the value of a product they purchase, but also because it helped build a certain social image in the industry. WoM was not a top source for brand discovery, however, the results showed that it is a key factor when it comes to building brand credibility in China. Patterns emerging from the interviews are also evidence that the collaboration between the community and the brand is an indispensable source of innovation. Bringing value to community participants and their employers should be a top priority for the brand if they hope to generate active participation and a constant feedback loop among their customers
My goal was to provide actionable insights to those RoW managers who have taken on the challenge of not only entering China with their products and services but becoming a brand that answers to real consumer needs. My research is just a foundation, but it “opens the door” for further studies. For me, it was an excellent opportunity to expand my professional network and learn from experts in product development and marketing working for top global companies. I also believe that the findings can be of interest to fellow researchers in the media field as my paper explores the ways online communities interact with brands and digital platforms in an independent ecosystem hidden behind the Great Firewall. Moreover, the study builds upon the media innovation field and expands knowledge shared in the Media Management courses to a whole new digital media space—China.