In contrast, American brands have never quite conveyed the same message. Although various US brands have high growth potential and brand recognition, they don’t always communicate the “elite” lifestyle. In fact, America’s “brand” leans markedly toward affordable luxury, comfort and egalitarianism.

According to a survey by McKinsey, Asian Gen-Z consumers prefer “brands that set them apart” and it’s this trend toward premium-isation that penalises American brands as too democratic and non-discriminating

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Decreased brand awareness

Given that American brands are just a little too down-to-earth for many in the China market, then, it’s no surprise that the Gartner Digital IQ Index, which compares a market’s top brands, only featured two US brands in its latest China 2019 report: Coach and Tiffany & Co. The remainder of the list was dominated by European labels.

And while Michael Kors and Ralph Lauren command high engagement and are internationally renowned, few American designer retailers hold the same level of brand equity. Many of the less famous US labels that failed to expand abroad or don’t have a strong footprint in Asia have only managed to sustain positive sales in the US thus far thanks to foreign consumers.

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This group of foreign buyers (Asian and otherwise) came into contact with American retailers while living, travelling, or studying in the US. They were introduced to such labels through their friends or came to know them through word of mouth marketing. But if we take these consumers out of the equation due to coronavirus, certain American brands risk losing not only sales and revenues but also recognition and the potential for new customers.

The Chinese students who came to know Lilly Pulitzer while travelling around the Sunshine State, or Brooks Brothers and J. Crew while living in Boston, have introduced these labels to their relatives and friends back in China. As a result, those American retailers won exposure without having to put money behind global marketing campaigns.

Rising patriotism and hostility toward the US

Meanwhile, in a patriotism-fuelled society like China’s, local luxury consumers are becoming increasingly nationalistic with their purchases. Younger consumers in particular tend to succumb to peer pressure and boycott brands because their friends do.

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Social media also plays an important role in shaping ideas. Young Chinese consumers whose buying behaviour is influenced by their environment will respond differently to the anti-American comments or a backlash against US retailers on Weibo if they live in an environment where such rhetoric is tolerated. Yet, different reactions can be expected when youngsters are living and studying in the US and are surrounded by groups of people who are more tolerant of American ideals or views.

In both cases, a herd mentality prevails, with consumers acquiring the brands or products everyone they know wants. US brands are likely to find themselves increasingly out in the cold.

This article originally appeared on Jing Daily.

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