Jacob Cooke is the Beijing-based chief executive of WPIC Marketing + Technologies, which advises global brands in Asian markets.
Amid diplomatic tensions between Canada and China, many Canada-based analysts have warned of potential boycotts of Canadian brands in China.
But what we’re seeing on the ground in China is that demand for Canadian products is soaring.
Whatever the path forward after Tuesday’s release of former governor-general David Johnston’s foreign-interference report, this sky-high demand for Canadian goods is one reason among many that trade is unlikely to be affected by this diplomatic row.
A few days ago, Canada Goose GOOS-T announced that its Asia-Pacific revenue jumped 65 per cent last quarter, driven by the recovery of consumer spending in China.
If you stroll through Beijing’s streets in February, you’ll quickly lose count of how many Canada Goose jackets you see – but you’ll also spot folks wearing jackets from more niche Canadian brands such as Rudsak and Nobis.
If you stroll through Beijing’s streets in May, you’ll be equally amazed by the number of people sporting Lululemon LULU-Q. The athleisure giant just opened its 101st store in China; you can now shop at a Lululemon store in 36 Chinese cities. Lululemon’s China revenue was up 70 per cent year-on-year in 2022.
And there’s also a good possibility that these same people are strolling around with a cup of Tims in their hand.
Tim Hortons operates more than 600 outlets in China, and 2022 revenue was up 60 per cent from a year earlier. Folks can get their double-double fix in 20 Chinese cities, and by 2026, Tims plans to have 2,700 shops in the market.
These are just a handful of Canada’s consumer giants with a successful presence in the market. Beyond that, a wide range of smaller Canadian brands are thriving on China’s e-commerce platforms.
Readers might be wondering why those brands are so popular.
The answer lies in the value that they deliver. Canadian brands, and their strong product offerings, align with Chinese consumers’ aspirations and lifestyle choices.
For example, one of the most notable lifestyle trends among high-spending young Chinese consumers is an increased focus on health and wellness. Canadian brands are global leaders in athletic apparel, sports equipment and nutritional and personal care products.
There’s also something inherent in the Canadian brand itself that resonates with Chinese consumers.
Canada Goose and Tim Hortons, for example, explicitly deploy Canadian imagery in their China branding; their connection to Canada is marketed as a key selling point. Tims’s China stores are adorned with maple leaves and hockey sticks, and employees wear red plaid shirts.
These brands would not be seeing such enormous growth if Chinese consumers had soured on Brand Canada.
Could sentiment turn on a dime? It’s unlikely in the current context.
For 15 years, my organization has been supporting leading Canadian brands in China through our market research, e-commerce and marketing capabilities. Ever since the crisis involving Huawei executive Meng Wanzhou and the two Michaels in China broke out in late 2018, we have closely monitored Chinese consumer sentiment toward Canadian brands.
People in Canada might not realize how poorly Ms. Meng’s detention was received in China. Huawei is a national champion; Ms. Meng and her family revered. This was a huge deal to the average person.
Yet even at the height of this crisis, consumer sentiment never turned against Canadian brands.
Ms. Meng was detained on Dec. 1, 2018. That was unfortunate timing for Canada Goose, which was scheduled to open its first store in China on Dec. 15. Rumours swirled about a potential boycott, so the company delayed the store opening.
But the boycotts never came. The opening went ahead on Dec. 30. For days, people braved Beijing’s frigid winter temperatures in hours-long queues to get into the store.
Today, Canada Goose has 18 stores in China, its most of any market globally. Shortly after Canada Goose entered the market, Tims China launched in February, 2019.
Even at the depths of the Meng incident, Chinese consumers continued to place their trust in the quality, innovation and values that Canadian brands offer. Unfortunately, some Canadian agricultural producers were caught in the crosshairs, but it never touched brands.
Where consumer boycotts have happened more recently, they have targeted specific brands, and have arisen from specific triggers where that company was seen to have fallen foul of government policy or made a statement deemed offensive. The current diplomatic tension between the two countries doesn’t register among average consumers in a remotely similar way.
Is there a risk of government action? Also unlikely. The Chinese government is on a charm offensive to attract foreign investment and add momentum to the economic recovery.
For Canada, it’s wise to avoid escalation in this diplomatic row. But one thing is clear: demand for Canadian products is not showing any signs of decreasing.