Mentality of Chinese consumers is hard to understand China is one of the most complicated markets throughout the world The largest problem facing most enterprises is that China is too complex and diversified. It can be said without exaggeration that Chinese market is one of the most sophisticated ones across the globe. While boasting the largest consumer groups, China also sees varying consumer conditions. In terms of languages, different localities have their own unique dialects; with regard to economy, there are huge income disparities. So does the retail industry in this country. No single retailer’s sales turnover has surpassed 1% of the total retail revenue in China. In some developed countries such as the US, France, Italy and UK, you only need to choose a mainstream TV station to advertise for your products. However, do you know the exact number of TV stations in China? Thousands! What’s more, there are over 2,200 channels. Statistics show that China has a total of 10,000 newspaper and 2,000 magazines. In such a diversified market, how do you deal with the customers? And how do you market a product in China? In this way, China is a difficult market actually, where it is hard for you to win and promote the products to the targets. Nevertheless, this is where its charm lies in. Competing in Chinese market is really challenging, and only those who have a full understanding of the customers can succeed. As we all know, different consumption habits are related to their own cultural backgrounds. So how can we formulate the marketing strategies for various nations? Should any company want to win the Chinese market, it has to grasp a powerful marketing expertise. A good marketing plan requires the best knowledge of the consumers. The largest error the western companies have made on the Chinese soil is that they just copy the products developed in other markets to China directly, without studying the characteristics of Chinese consumers in advance. This leads to their immediate failure. It is also the same case when such products are marketed in India, Brazil or Russia. Therefore large amounts of time should be spent on market investigation, which includes knowing the distribution system and retail system of related markets, the social and micro economic environment of the nations concerned, the different cultures and languages of relevant consumers and their countries, the product packages, shopping habits, and how they use such products in their home. This program is applicable to all nations involved. Chinese people are aware of enjoying life than ever before What are the characteristics of Chinese consumers? The disposable income is an important problem. Compared with consumers in other countries, one noticeable feature of Chinese consumers is that they prefer savings. Chinese people have saved 30% of their incomes in the banks, which is incredible for other nations. Why are Chinese consumers not willing to spend the money like other people? First of all, the traditional idea of family plays a key role. In China, it is usually the family members or friends who make the decision to have a large purchase, while in developed nations, an individual often decides his purchase. This has restricted the consumption of Chinese people to some degree. Secondly, there is a huge gap between China’s rural and urban markets. Owing to their relatively higher salary and optimism to the future, the urban residents are usually more ready to purchase, while the rural ones have comparatively poor consumption ability. With more and more consumers’ access to the middle class, this situation will be greatly improved. Thirdly, Chinese people attach great importance to education, since it is part of Chinese culture. To Chinese consumers, the most important thing is to save the money to afford the education bills of their offspring. In this case, they have little disposable income in hand, and that has restrained their enthusiasm to purchase durable or daily consumption goods. Of course, we have also found that Chinese people come to spend their money more willingly, with a view to improving the living quality. Since they are always optimistic about China’s economy and have a stronger and stronger awareness to enjoy life, consumption has been stimulated greatly. This is the case not only in large cities, but also in some medium or small cities. China has witnessed extraordinary booming real estate and automobile industry currently, so what kind of view they hold in this aspect? Let me begin with the automobile market. Large cities like Beijing, Shanghai and Guangzhou, see the exploding increase of private autos, whose number has doubled since 2004. Moreover, 42% of the autos were purchase in the year 2005 alone. While in rural areas, the scene is quite different, as few residents are capable of purchasing cars. And the motivation for auto purchase also varies. Some people are buying autos for use, while others are just showing their identity and personal status. In present China, autos made in the US and Europe are very popular, while those from Japan and South Korea are deemed as low quality. This is just opposite to the American situation, yet it is still undergoing constant changes. Our latest investigations have found that shares of autos with Japanese makes are soaring, and those with local makes are also taking up more and more proportions. Although the quality is not so satisfactory, Chinese original autos are just striving hard. Compared with international markets, oil price in China is relatively lower, which is contributable to Chinese government’s subsidy to the oil industry. This policy has exerted great impact on China’s auto market. Regarding to Chinese real estate market, if you can understand the mentality of Chinese people, you will find that they always consider the possession of house and property right as personal success. This has demonstrated the Chinese style achievement, as well as its unique culture. For example, most Chinese people prefer to build a fence for their courtyard after they have purchased the property. This does not show Chinese people do not like to chat with their neighbors, nor they are introverted. Their purpose is to show the passers-by that, “This is my family”, “This is my world”, or “I own this land and house”. Nowadays, real estate market is exceptionally bustling in China. On the construction sites in cities like Beijing and Shanghai, the cranes are busy building skyscrapers, whose number exceeds any other city in the world. Townhouses are becoming ever more important. When Chinese people are designing the houses, they always consider Fengshui (Chinese art or practice of positioning objects, especially graves, buildings, and furniture). In addition, the western houses pay much attention to the kitchen. According to their cultural traditions and habits, kitchen enjoys a central position in their life, where they not only have dinner, but also have talks. While the Chinese kitchens are just very small, since they are not so important, and they will have dinner with their parents on weekends. Of course, things are changing now, and kitchens are becoming larger and larger in China. Western culture and things have greater and greater influences on Chinese people What is the largest change of Chinese consumers? It is hard to give a general evaluation on the Chinese consumers. China is a very diversified country and every province has its own language and cultural habit, so we can not make a hasty conclusion for the consumers. If I have to draw one, I think that, penetrated by globalization and through the internet, the Chinese people have been access to more and more unprecedented information and knowledge. Since China has opened itself wider to the outside world, western culture and things will surely exert larger impact on Chinese people, and enter their daily life. The former luxuries of westerners, such as auto, real estate and TV, have become the daily necessities of Chinese residents. I want to refer this as the “natural evolution”. Everything happening on Chinese is not so special, as other developing countries are also undergoing such transformations. However, the speed of such evaluation on Chinese people is so amazing that it has made China more particular. Some people owe such changes to the large inflow of oversea products. Do you think so? The access of foreign products to Chinese market has indeed brought huge impact on our consumers. It has fostered their awareness and loyalty to overseas brands. This is the reason why China has become the largest luxurious product consumption market across the world. Of course, comparing with other markets, Chinese loyalty to the brands is not so high. In the beginning, they deem foreign products as excellent ones, but will change their mind as soon as they have used the products, and choose other brands after considering the prices and other factors. Is China your most important market? Definitely! You will find in the coming 5, 10, 15 years or 20 years, the fastest growing markets are China, India, Russia and Brazil. |
