FUNDAMENTALS ABOUT CHINA
Marketing wisdom says that it is preferable to fish where there are lots of fish, even if there are also lots of fishermen, rather than somewhere with less competition, but also fewer fish. But what if there were somewhere that had a lot of fish AND not as many fishermen? Here are 5 observations we made about China’s opportunities:
1. To interest Chinese consumers, get ready to offer quantum leap innovation, more so than anywhere else on earth.
Quantum leap is a word that springs to mind in a society that is constantly juxtaposing archaisms and traditions with cutting edge technology and behaviour. China is where the 19th century meets the 22nd. Chinese life can be torn between these extremes.
Some services or businesses, like hospitality, remind us of Western societies when we were children, with equipment dating of the 60s. And then when we want to pay, no cash is accepted because all payments are made with social media apps. This is China.
People we meet oscillate constantly between antique behaviours and futuristic anticipation. An extreme energy exudes from them, and that’s the real power of China, a palpable desire to get things moving, to endorse change and motion, and to be actors of the transformation.
China has the sort of energy that the US had 30 years ago. Chinese people are realizing their country is becoming the laboratory of the future, and they take pride.
2. Make sure you give Chinese consumers perks and rewards to mitigate the hardships of Chinese life.
Life in China is hard. People have repeatedly complained to us about the toughness of life: although China now has a staggering number of extremely rich people, becoming rich is not easy, and for most, it’s not simple to make both ends meet. Living conditions are harsh, and sometimes suffocating: air pollution is a major problem, one that affects people from all walks of life, and a reason for some to flee to smaller cities.
Staying healthy is hard: finding healthy ingredients is a major concern for most; Chinese people distrust their local businesses and brands, they believe successful Chinese food companies do not care about health. Chinese people also distrust government linked businesses, like banks, which is one of the reasons they prefer social media financial transaction.
In this context, Chinese people need rewards and perks. Consumption is an instant reward and gratification in a tough world. Make sure your brand is offering joy and pleasure, to mitigate the hardship of tough circumstances.
3. Chinese people only copy good products. Think differently about imitation.
One of the things that is difficult for marketers in China is the number of fake products around. But fake has a totally different cultural meaning in China. People don’t condemn fake for being unethical, they reject it for being poorer quality.
As an innovator at a major IT Company in China told us, Chinese people have a different conception of innovation: innovating is not about starting from scratch, which is seen as vain and sterile, it is about improving whilst copying.
Few voices in China, in this context, will criticize a brand for copying another one. However, Chinese people are wary of bad copies or dangerous fakes, in particular in food and beverages. Reassuring on the safety of the original is definitely a key strategic requirement in China.
As an expert put it philosophically, if you’re not successful in China, you won’t be copied. Being copied is a potent signal of success. When it happens though, one needs to make sure that the original can be identified, and that being the original bears a clear benefit of safety and reliability. These are not easy tasks, granted.
4. Consumers are after experiences. Offer great experiential marketing.
Chinese wealth is palpable, visible, and obvious. The opulence is on display in entertainment places, Night Clubs, bars and KTVs. An increasing portion of the population has income available for leisure, travel, and consumer goods. With an average annual wage of about 70K CNY, keeping in mind the currency under-evaluation and the yuan buying power, the struggling Chinese middle class is no longer struggling.
This new wealth has already produced its own consumption fatigue, with consumers DEMANDING more interesting consumer experiences. According to an MEC report, 84% of Chinese consumers demand experiential marketing. The K11 mall in Shanghai is a good example of a cutting-edge shopper experience heading towards being on par with amusement parks and art museums.
Globally, we see consumers divide their consumption between purchases that can be made on line, with in home delivery and little emotional involvement, and hyper involved trips to store, where they expect the store to provide an enlightening experience and great amusement.
In China, because of the quantum leap we described above, consumers have already adopted the consumption pattern of tomorrow. If you count on consumers making a trip to store to enjoy your brand, make sure the trip is worthwhile!
5. Targeting: be sharp, the size of China rewards it!
One of the staggering experiences in China is to examine the size of a micro-segment of the population. Say you want to target ONLY women in their early 30s that are not married yet, and have high income… The Chinese market, for them, is about 20 million individuals.
China is an incredibly diverse society, from North to South, from tier one cities to tier three and rural areas, from the megapolis to provincial towns. Even if some sub-groups / segments of the population are less numerous in relative terms than they are in Western countries, they are still enormous cohorts in absolute terms.
And in a country like China, there is a very strong strategic relevance in targeting sharply: by doing so, you can secure a cutting edge in a country that worships innovative products and services. You can build the unique experiences that are so crucial to create consumer interest. And you can make sure your product offers the joy and reward that are so central to Chinese consumption.