Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
The analysis was carried out by Dr Hongzhi Gao, a senior lecturer at Victoria Business School and senior research fellow of the New Zealand Contemporary China Research Centre; Vallen Han, Asia marketing director of New Zealand Post; and Simon Young, chief executive of syENGAGE, a social media consulting firm.
The trio says the social media posts send a clear message to consumers in China that New Zealand is safe and trustworthy.
Two of the main channels being used are Sina Weibo, often referred to as the Chinese version of Twitter, and WeiXin, a group chat tool installed on cellphones in China that includes connections with classmates, work colleagues and special interest groups.
Messages that explain why Chinese consumers should trust New Zealand infant formula have been forwarded numerous times by WeiXin users.
Examples include:
"New Zealand is one of the most honest and trustworthy countries in the world. It is the only country in the world that provides accident cover to everyone in the country including visitors. It only uses 4 digit passwords for ATMs. Its hotels don't ask for cash deposit when you check in. Bottled water can be carried on domestic flights..."
Skykiwi, New Zealand's largest Chinese media website, recently posted on Sina Weibo, reassuring the Chinese public that there is no need to panic.
"Many Chinese people in New Zealand supported this post," says Young.
Young says that an infographic detailing the timeline of events over the course of the Fonterra crisis has been shared more than 10,000 times on Sina Weibo, attracting nearly 500 comments, most of them positive, about New Zealand.
"China is a relatively low social trust society in which there is a strong inclination on the part of Chinese to only trust people related to them," notes Dr Hongzhi Gao.
"Therefore, it is critical to consider engaging with Chinese social media networks where relationship-based trust is high, to restore trust in New Zealand products during the current country brand crisis."
Vallen Han says there are more than 200,000 Chinese people living in New Zealand, so the potential for reaching China through these networks is enormous.
"If every Chinese person living in New Zealand actively communicated to their networks in China via social media, they could potentially reach out to tens of millions of consumers."
Young believes that social media responses in the current Fonterra crisis should be treated with the same importance as press releases, conferences and journalist interviews.
"Social media is primarily a people-to-people medium and, in an environment of low consumer trust such as China, the authentic voice of a friend, colleague or fellow-citizen bears far more weight than an official pronouncement."
Young says this should be a wake-up call to New Zealand companies to 'up their game' in the digital space.
"One company's mistake is costing an entire industry," he says. "Social media is one way brands can communicate directly with consumers, which just may prove essential in a crisis."
