China’s most important insight
Gaining consumer insights is critical for marketers to design optimal strategies for the large and complex market of China. Of course, there are many insights we can share about the Chinese consumers - their peculiarities, idiosyncrasies as well as common values and guiding principles that they often shares with consumers in the rest of the world. Each of these would be a relevant insight and could serve as a good input to the development of marketing strategy for China.
However, in this article, I want to talk about just one insight - an insight which I feel is really the most important insight about China. An insight which is enduring and universally applicable. And that insight is:
There is no universally applicable and enduring insight about China.
Now I know some of you may want to contend this – but think about this - if you disagree - you just prove my point - as this insight that I am giving you is also not universal. Of course when I say this, I am exaggerating a bit, but there are two reasons why I exaggerate and there are two points that I would like to make.
Firstly, given the size and complexity of China, Newton’s law of Consumer trends applies to China. For every consumer trend that you see, there is an opposite, though not necessarily an equal trend. Hence, if I tell you that Chinese consumers are becoming more health conscious - and that is absolutely a valid trend, I also need to tell you that junk food restaurants have been growing in the country at a phenomenal rate. Obviously, they are catering to two different segments of the market – both of which are growing. Or at times it could even apply to the same consumers - who display different behaviour at different occasions or situations.
Similarly if I mention that for the market for luxury goods is expanding, and consumers are willing to pay a premium for better quality, there is also a phenomenon that consumers down trade for products which do not have social or image connotations. And hence we also see that private labels, though still small in China, are also growing significantly.
Or if we say that the Chinese consumer is getting westernized - in terms of adoption of Western food (at least junk food), or customs, (e.g. Christmas and Valentine’s day are celebrated with great gusto in China) at the same time I need to point out that there is a resurgence of interest in traditional culture, studying Confucius philosophy and Chinese art and design. Even if you take a very broad trend such as urbanization - and it is said that 10-15 million Chinese are urbanized every year, this year there is a reverse trend of sort as 20 million migrant workers return to their villages as they can’t find a job in the cities.
I think from a marketing point of view this fact has significant implications. As it means that if your opportunities and threats may not be just determined by the obvious trend but also by the counter trend.
Secondly, China is a market of explosive change. For example in the past 5 years, sales of luxury goods have tripled, sales of luxury automobiles have risen five fold. But it is not just luxury products - the sales of passenger cars have grown 2.5 times. The number of internet users has tripled to 300 million to make it the world’s largest internet population. Even if you look at consumer goods - the fabric softener market has more than doubled in the past 5 years. Since I came to Shanghai a little over 6 years ago, the average salary of a Shanghainese has more than doubled and in my company it has tripled (I wish the same was true for me!)– as we pay well to attract the best.
If this is the pace of change that is happening in the market, and the marketing landscape is changing so rapidly, the insights that we discover may not be very enduring and hence for marketers, it is necessary to keep a permanent hand on the consumer pulse - once in 4 or 5 years usage and attitude research studies will not do.
Written by Ashok Sethi, TNS China
