Introduction

AusMask is an Australia-based mask designer and supplier. Aiming at providing customers with the best-quality masks, AusMask enjoys its advanced mask filtering technology and aesthetic design concepts. The value proposition of AusMask for the Chinese market is to provide customers with the best-quality, visually aesthetic masks to protect people from the negative impacts of polluted air and enables them to have a breath of the clean air with “Australian flora” (“Our story”, 2018). Today, due to the increasingly severe air pollution in China, AusMask has shifted its focus on the Chinese market to meet local people’s demands.

For example, since 2012, the pollution mask market increased by 30 percent annually and reached a total value of $650 million in 2016 (“Daxue Consulting”, 2017). Though the Chinese market has a large potential size, it is still featured by fierce competition and various risks for a foreign player. For example, in the mask industry, world-leading mask suppliers such as 3M, N99, and Wecan and so on have had strong presences in the Chinese market (“Air Pollution Masks Industry”).

This report analyzes the mask industry in Chinese market for AusMask. Based on the data of the market and the competitors’ business strategies that AusMask would face in China, this report also gives suggestions on AusMask’s strategic partnerships in China market.

Business Challenges for AusMask

The main challenge that AusMask faces is the lack of strong value propositions for the Chinese market. Value propositions refer to the promise of value delivered by a brand or a company, and a successful value proposition could not only boost sales of AusMask in China, but also effectively guide the company’s business strategies, helping it to promote its brand image and improve customer retention and loyalty (Hasssan, 2012). However, currently, AusMask has little brand influence in the Chinese market, and it is inconvenient for Chinese customer to buy the products.

The second challenge is the fierce competition of the mask industry in China. Today, a great number of small local manufacturers have emerged in the Chinese market, and even in Dadian, a small village in Shandong Province, China, there are over 300 local mask processing and manufacturing enterprises (“Daxue Consulting”, 2017). For these local mask suppliers and manufactures, they enjoy remarkable advantages in their value propositions, especially in aspects such as prices, customization and accessibility.

For example, taking advantages of cheaper labors, local manufacturers could offer similar value of masks at a much lower price. Cooperated with local logistics and retailing organizations, local enterprises could make the whole supply chain more convenient. With years of experiences in the Chinese market, they could also provide customized services for Chinese customers to meet their specific needs.

Based on the two main challenges, it is learned that AusMask should pay more attention to its competitors in China, and to seek proper local strategic partnership is also necessary for this Australia-based company to develop the Chinese market.

Design and Methodology

Both positivism and interpretivism are research approaches which could effectively help researchers to investigate issues of business and marketing (Kwon and Lennon, 2009). Different from positivism, interpretivism usually uses qualitative approaches such observation and research of concepts from academic fields or journalism to better interpret and understand a phenomenon (Babbie, 2014). Thus, this report applies interpretivism to the research and uses qualitative approaches to examine the mask industry in the Chinese market and the value propositions of AusMask’s competitor in China.

The data and information collected for the research are focused on AusMask’s three main competitors in the Chinese market, including 3M, N99 and Wecan. All the data and information are from sources such as academic journals, and industrial and journalist reports. The limitations of the research are the lack of data on competitors’ and potential Chinese partners’ financial situations and accounting statements, and shortage of the latest data of the mask industry in the Chinese market.

Data Analysis

The potential competitors for AusMask in the Chinese market including 3M, N99, and Wecan. First of all, 3M is an America-based global leading mask supplier which offers a simple, non-adjustable foam mask. As the biggest competitors for AusMask in the Chinese market, 3M enjoys competitive advantages of such as its advanced filtering technology and its competitive prices, around $3 per piece. 3M also has a successful value proposition in the Chinese market due to its strong global brand images. Thus, most Chinese customers would describe the brand of 3M as “durability”, “reliable”, and “leading technology” (“3M China”, 2018). Because of its successful branding, 3M occupies the largest market share in China now.

Secondly, N99 is another important potential competitor for AusMask in the Chinese market. N99 is a China-based mask brand established by Hubei Best Hygienic Products Company (“N99 Alibaba”, 2018). N99 masks are simple, non-adjustable and disposable cotton masks. They are designed to protect users from fog has and pollution, while the masks lack aesthetic design and their relatively poor quality makes it less durable. The competitive advantages of N99 are its customization and low price. For example, N99 could provide with customized products and tailor the products’ size and design for customers’ needs (“N99 Alibaba”, 2018). Moreover, N99’s masks are in low prices, around $0.2 per piece, so many companies and local governments would bulk purchasing the masks of N99 to reduce costs.

Lastly, Wecan is also a potential competitor for AusMask in China. Wecan is a China-based mask brand which provides anti-pollution, adjustable cotton mask masks. The competitive advantage of Wecan is its accessibility for Chinese market. As a successful seller of Taobao, the Chinese largest E-commerce platform, Wecan’s efficient supply chain management enables Chinese customers to receive the product within one day after they finish the order and payment on the platform. Also, the price of Wecan is only around $ 1 per piece, which is also cheaper than most foreign brands. However, Wecan masks also have obvious disadvantages such as the lack of technology in pollutant filtering (“Wecan Taobao”, 2018).

The competitive advantages of 3M, N99, and Wecan could be threats to AusMask’s business in China, while AusMask should also make best use of its own advantages in its value proposition such as the performance, design and convenience-usability. For example, the best filtering technology and high-end quality of AusMask could ensure customers’ perfect breathes. The aesthetic design of AusMask could appeals to customers’ demands for aesthetic pleasure. Furthermore, the adjustable and reusable design of the filters is also convenient for customers to use.

Recommendation and Discussion

Based on the analysis of competitors’ competitive advantages in value propositions, some recommendations could be given for AusMask. First of all, AusMask should establish a distinguishable brand identity in the Chinese market to let more local customers become aware of the brand images. The most effective ways to promote its brand is to make advertisements on televisions, magazines or social media such as We-chat and Weibo, and to have more promotion and marketing activities in Chinese market, such as discounting activities in Chinese supermarkets.

Secondly, AusMask should improve its accessibility by opening both online and off-line retailing stores in the Chinese market. For example, the E-commerce retailing stores could be opened at Taobao and JD.com, the two largest Chinese E-commerce platforms. The off-line stores could be open in Chinese shopping malls such as Wanda Shopping Mall, and New World Shopping Mall.

Thirdly, AusMask should strengthen the advantages in its value propositions, such as the performance, aesthetic design and convenience-usability it provides. To seek for strategic partnership with industrial leaders could help to achieve this goal. For example, AusMask could establish cooperating with global leaders such as 3M to keep improving the products’ design and performance.

All in all, by improving its value propositions in China, AusMask will overcome the challenges and gain advantages to appeal to its niche market in China. Also, the successful entry to the Chinese market will be its first step for the global market.