You can’t solve problems in the same frame of mind with which the problem was created. Unfortunately, western businesses frame the China market as distant, opaque, and unfeasibly complicated. The following four realities about the modern Chinese consumer will hopefully dispel that mindset. After all, China is the market of the 21st century. Ignore dire Bloomberg reports about the country’s GDP slowdown. Focus instead on its exploding consumer growth. Such focus is not head-in-the-sand, but rather acknowledgment of the Chinese government’s stated mandate to transition the country from an export to a consumer-based economy.
The numbers back up the official talk. China spent $3.6 trillion on goods and services in 2013, equal to Germany’s GDP. Retail sales increased 13% to $2.6 trillion.* Even more encouragingly, this market is wide open to western companies willing to hurdle the regulatory barriers to entry, as well as adapt to systems that increasingly mirror those in the west.
New China Reality 1: The West is the Best
Today’s Chinese consumer is a global consumer, defining herself by the brands she displays and the products she uses. Declining puissance of America’s realpolitik aside, the U.S. is still light years ahead of the East in terms of fulfilling the consumer’s ego with targeted marketing and goods. For those on the ground in mainland China and an eye for it, the western consumer matrix is everywhere. McDonald’s is China’s 50s malt shop for teenagers, the cool place to study and chill with friends. Starbucks pack in upscale professionals who crave the global standard for informal meetings and caffeinated downtime. Chinese television commercials slavishly imitate western best practice, with bright cathedral kitchens and car rides through nature even more improbable in this crowded dystopia than in America.
The western-marketing matrix feeds the China-wide conviction that only western brands, goods and services will do for a discriminating consumer. Nike and Adidas are miles ahead of the closest Chinese athletic brand. A new Chinese Mercedes owner suffers a significant drop in bragging rights should the model be one of those assembled in China.Hollywood bolsters the Matrix, convincing the world’s most populous nation that life in America boils down to situation comedy played out in four bedroom colonials on calm, leafy suburban streets. What you own is what you are. A lamentable state of affairs, but with a silver lining for western companies of 1.3 billion pairs of open arms to whatever western company can jump the firewall and translate its story.
New China Reality 2: Quality Comes First
Just because all the cheap stuff in Walmart is made in China, doesn’t mean the Chinese want to buy it. True, a significant portion of Chinese must still buy cheapest by necessity. But this only spurs the rest of China to spend more than is pragmatic, in order to distance itself from the humble majority. This reactionary stance to spending explains why virtually every luxury brand from Prada to Rolls Royce sees its future in the China market. Which is not to imply that you must be a luxury brand to profit there. On the contrary, now that even provincial officials’ dowdy wives sport Gucci clutch purses, the search is on for boutique brands whose quality is easily inferred but less easily recognized.
The Chinese only admit it amongst themselves, when they jest about the impossibility of a mainland company ever creating significant value for consumers, rather than a cash cow to fund the owner’s escape overseas. If a product is to last, and be appreciated, it must be made in the West. Home goods, accessories, sporting goods, you name it. Even if it is not meant to last, a western product is increasingly the only choice. With food safety a top three concern for the average Chinese, western dairy, seafood, meat, and organic vegetable providers are facing demand they can hardly supply, difficult as it is to locate and secure the services of a modernized Chinese logistics/fulfillment provider. China’s taste for western F&B is only whetted.
New China Reality 3: Online is the New Offline
Upon a time, Chinese people treated their environmental surroundings with more attention than necessary not to hit someone or get hit by a car. No more. The handheld device gets all the eye-share when out of home and office, larger screens when in office. Mobile and TV compete in the home. China has 620 million people online, online by compulsion, not by choice. Thus do traditional print and OOH revenues decline precipitously as the price of advertising online increases at a rate comparable to Shanghai rents’. But just like their western counterparts, the Chinese aren’t paying attention to ads unless they appear at exactly the right time, in the right context.
When they’re thinking about buying, and the thought is seldom far from front of mind, they’re looking for information online. Reviews, previews, latest news, and most of all, stories. This is how people everywhere internalize information best. It has never been easier to target Chinese consumers, tell them your story, and win them as customers, thanks to China’s online revolution, and subsequent eCommerce boom. Global companies who have been in China for years through distributors and sales offices, suffering lack of market penetration and below-target revenues, are finding the solution to sales online. A website, hosted in China for speed, optimized to be found for correct keywords on Baidu (China’s Google), then localized to convey a brand’s story, with next steps for conversion, is the new platform for the Chinese market. A dozen online channels exist to engage targeted shoppers and drive sales: Chinese PPC, 3rd party ecommerce sites, focused portals, social media, email marketing, and more.
See for yourself. Take the keyword/phrase you’d like to appear on Google for, use Google to translate it for simplified Mandarin, then enter it in the www.baidu.com search bar. Use your browser’s auto translate extension to peruse the results, and soon you’ll agree that the Chinese consumer is truly just a click away.