Marketing to the Chinese Consumer[1]

8/3/2019 Marketing to the Chinese Consumer[1]

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in association with:


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Copyright Forbes 2011

To see how major brands are approaching the emerging Chinese consumer, Forbes Insights, in association with

the World Federation o Advertisers, surveyed more than 300 China-based senior executives at large consumer-

ocused businesses ($250M plus in annual revenues) responsible or creating, managing, or executing their

companies marketing strategies in China. The key fndings include:

ConsumerawarenessinChinaisking.About a third o Chinese (35%) and non-Chinese (32%) companies

today are ocused on brand awareness as a key marketing goal or the coming year. Among non-Chinesecompanies, 36% are ocused on creating positive brand perception.

Marketerswillshiftfromawarenesstogrowth. Three years rom now, their top priorities will shit rom

brand awareness to increasing sales/revenue rom China, and expanding into new regions/areas in China.

GlobalbrandsmustalignwithlocalChinesecultureandtastes. The vast majority o non-Chinese

marketers (63%) indicated they believe they need to change their brand attributes or Chinese consumers.

ManyChinesebrandsalsoarelookingtoextendtheirpresencebeyondtheirborders. Over a

quarter (27%) o Chinese respondents indicated they intend to expand their brands globally.

Second-tiercitiespresentthegreatestopportunity. Overall, eight o ten respondents agreed that

growth is most likely beyond the frst-tier cities o Beijing, Shanghai, and Tianjin.

AsmarketersfocusonbranddevelopmentamongChineseconsumers,televisionadvertisingwill

playalargepart79% o respondents have it as part o their marketing programs or 2011. But looking

ahead, new platorms may emerge as marketers will be ormulating integrated communications strategies.

DigitalandmobilemarketingareacriticalpartofthemixforreachingChineseconsumers. About

90% o survey respondents said they are extremely or very important, especially when it comes to

communicating with younger consumers.

TosucceedinChina,marketersmayneedtoovercomesomeuniquebarriers.These include a lack o

reliable market research, a lack o operational transparency in the Chinese marketing communications

industry, and a need to fnd qualifed marketing talent and leadership.

Ethicalstandardsformarketingcommunicationsneedtobeputinplace in order to protect the

reputation o marketing with consumers and government in China over the longer term.

Key FiNdiNgs


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Chinese consumers spent $9 billion on luxury goods

2010, second only in magnitude to the United States.

The consumer in China has become signicantly mo

sophisticated than ever beore. Simon Pestridge, glo

brand director or Nike, said, There is no dieren

between the consumer in China and the consumer in t

U.S. They are incredibly proud and savvy, which is di

ent rom 10 or 15 years ago.

How, then, are companies nding their way throu

the demographic and marketing wilderness to the promi

land o market share and brand loyalty? Forbes Insights,

association with the World Federation o Advertisers, su

veyed more than 300 senior executives based in Ch

who work or global or Chinese consumer companies.

respondents were responsible or creating, managing,

executing their companies marketing strategies in Chin

In surveying a wide range o marketing executives

domestic and international rms active in China, th is rep

attempts to sketch out the approaches companies are taki

to reach the Chinese consumer. It examines the short- a

mid-term goals o consumer brands in China, looks at t

tactics companies are using, and identies some o the cr

cal barr iers that marketers wil l need to overcome.

Why is China taking o now? Essentially, the gov-

ernment has given the people the right to go shopping. In

2011, China begins its 12th ve-year plan, shiting its eco-

nomic ocus rom export-led sectors to increasing domestic

consumer demand. The plan, passed by the government in

mid-March, 2011, is designed to develop the country into a

major consumer marketplace. It plans to increase consumer

product imports, promote urbanization, and optimize the

consumer market or consumption.

That the Chinese consumer is driving global growth is

well known. The statistics are arresting: ten million new

Chinese consumers enter the market each year. In 2010,

Chinas consumer market was estimated to be worth $1.7

trillion. Credit Suisse projects that the burgeoning domes-

tic consumer market could grow to nearly $16 trillion

within a decade.

But while the consumers are there in droves,

brands dont necessarily know how to reach them.

China is still an emerging economy, and market-

ers oten eel they dont have the research they need

to target these new consumers. Furthermore, regional

dierences across China are pronounced but poorly

understood, particularly by oreign rms. And as

incomes o Chinese in second-, third-, and ourth-tier

cities rise, their consumption patterns will drive mar-

ket dynamics in unprecedented and unpredictable ways.Consider the ollowing:

There are more than 420 mil lion Internet users in China,

a number growing by the minute. The advertising and

marketing landscape in China is rapidly changing to adapt

to dynamic media and communication technology trends.

There are ve times as many people in China learning

English than there are people living in England. There is

an implication here or marketersthe younger genera-

tion has a lot o exposure to, not to mention interest in,

the West.

introduction:

Tm f Cn t g sppnFew markets are as tantalizing to global brand marketers as the new consumer-driven China. The new mark

o 1.3 billion peoplecoupled with the meteoric rise o both the size and spending power o its middle class

holds enormous potential or manuacturers o consumer goods and services. But, clearly, the dynamics o Chin

are unlike anything marketers have ever seen beore, and it presents challenges as serious as its market is large.


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PercePtion and awareness

According to executives responding to the survey, con-

sumer awareness in China is king; raising consumer

awareness is one o the three most-requently cited goals

or the near- and mid-term. About a third o Chinese (35%)

and non-Chinese (32%) companies are ocused on brand

awareness, making it the most commonly cited marketing

goal or the coming year. (Fig. 1)

But brand perception is critical too, and the top ocus o

non-Chinese companies27% o Chinese companies and

36% o non-Chinese companies named positive brand per-

ception as a top marketing goal or the next year.

Perception isnt just some amorphous concept, said Sean

Leow, ounder o NeochaEDGE, a Shanghai-based creative

agency that connects brands like Coca Cola and Absolut

Vodka with Chinese artists or their advertising campaigns.

Consumers have to be aware o what your brand stands or,

Leow pointed out. When Converse, the shoe company, was

looking to put break into the Chinese market, they made

a strategic decision and alliance to associate Converse with

music. They ran a campaign called Love Noise, where

they sponsored a ew indie rock bands, and they were able

to build up a lot o brand equity, said Leow.

Similarly, Nike has built its marketing and brand-

ing strategy around basketball. As a brand, we have to

think about creating one-on-one relationships with the

consumer, said Pestridge o Nike. That has meant doing

everything rom having Nike-sponsored NBA stars teach

basketball clinics to providing online venues or players

to get tips and inormation about the sport. The impor-

tant thing we can do is to be part o basketball, because in

China basketball is everyth ing, he said.Brand awareness, however, may be particularly chal-

lenging or non-Chinese companies looking to break

into industries in which there are a lready hety domestic

competitors. The data bears this out: asked to name their

longer-term marketing goals, the number o respondents

rom non-Chinese companies selecting creating posi-

tive brand perception dropped 12 points (rom 36% to

24%). This suggests that ater their initial eorts, aware-

ness trumps perception. (Fig. 2)

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Others may be acing an uphill battle regarding p

ception and awareness. For example, consumer electron

retailer Best Buy recently announced that it would sh

down its Best Buy-branded stores in China. Instead,

has chosen to ocus on growing Five Star, the domes

Chinese chain it acquired in 2006, because Five Star h

achieved greater market penetration and consumer awa

ness in the Chinese market.

change your brand For china?

Best Buys shit away rom its core brand in China may

indicative o how some non-Chinese brands need to approa

the market. While operating a China-only brand appears n

to be the norm, the vast majority o non-Chinese market

(63%) indicated they believe they need to change their bra

attributes or Chinese consumers. (Fig. 3) In many cases, t

may mean altering some brand attributes to demonstr

alignment with local Chinese culture and local Chin

tastes. For instance, western spirits brands have had to al

their scotch marketing to account or Chinese cockta

that mix scotch with ice and green tea.

That is not to say that strong global brands need a co

plete brand makeover to compete. The success o ma

global brands in China would seem to support this: ta

Starbucks, McDonalds, and KFC, or instance. Still, ev

i brands dont need a complete makeover, they might be

et rom a ew nips and tucks. Not everyone has to chan

their brand, but they have to show that they get the lo

culture, said Leow o NeochaEDGE.

Pestridge o Nike, agreed. Its like any relationsh

you have to show an authenticity. I we just brou

Kobe Bryant here and did nothing with him thwouldnt work, he said. There is a balancing act th

global brands in China must achieve to be success

to be both a great global brand, but also show comm

ment and desire to be part o the local culture. Nike h

pursued local authenticity in part by creating a Chin

ocused e-magazine related to basketball that will

distributed in Beijing, Shanghai, and Hong Kong. T

magazine is illustrated by local artists and touches

the many nuances o the basketball scene in China. O

the actual product side, Nike makes its basketball sho

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in China with a more durable sole, since basketball is

played on very hard, abrasive courts.

This need or brand exibility is supported elsewhere in

the survey ndings. Two thirds o respondents agreed that

companies that are unwilling to change their brands cannot

succeed in China. (Fig. 4)

In certain cases, tweaking or a new audience can

help uncool brands re-imagine themselves. Buick is

an example o a brand that pulled o a successul make-

over: it is one o the most popular automakers in China

despite a moribund reputation in its home U.S. market.

For the Chinese market, Buick made a ew key changes

a more powerul horn, as honking is a avorite pastime in

China, and headlights designed to look more masculine

and erce, two eatures hardly in keeping with the tradi-

tional American Buick.

global ambitions For chinese brands

While global brands are eying Chinese consumers, Chinese

brands also are looking to extend their presence beyond

their borders. Ultimately, the brand competition that is

arising in China could quickly spread into the home mar-

kets o non-Chinese companies.

In the survey, over a quarter (27%) o Chinese respon-

dents indicated they intend to expand their brands g lobally.

For example, Hong-Kong-based Shangri-La Hotels and

Resorts Group, one o the best-known luxury hotel brands

in China, opened its rst European hotel in Paris last year,

and hotels in London and Vancouver will anchor interna-

tional expansion in 2012.

With more and more Chinese travelling overseas,

spending more, and looking or venues and destinationsoutside o the traditional Asian countries and looking

urther to Australia, North America, and Europe, its no

surprise that we opened Shangri-La/Paris in December,

said Kent Zhu, director o sales and marketing at the

Shangri-La Group.

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ChiNas hoMegrowN BraNds


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when Nike-sponsored Kobe Bryant comes to China o

weeklong junket, he doesnt just spend time in the coa

cities, said Pestridge. He goes to smaller provinces a

teaches kid s how to play basketbal l. You have to show

Chinese consumer that you are serious about investing

their community. Its a strategy that seems to be payi

oChina is Nikes second largest market ater the U

and it has annual sales o $1 billion there.

There may be huge potential in these second- a

third-tier cities or brands that appeal to the desire

social mobility and the good lie, but may not operate

a luxury price point. JOVI, a popular chain o restaura

that has our locations in Beijing with plans or 15, expe

to open a ranchise in Yichuan, the capital o Ningxia

remote province in northwest China. But at the Yichu

branch o JOVI, the price point will be lower, said

Tian, ounder o JOVI, who oversees the companys m

keting operations.

Price is an important consideration in these secon

tier cities. Per capita income in China hovers arou

$6,000 per year, or about RMB 4,000 per month. (P

capita income trends much higher in cities and coas

provinces, and much lower in the countryside and weern interior.) So certain brands will nd that they ha

to adjust the price o their products accordingly in ord

to make a viable play or these up-and-coming marke

Similarly, non-Chinese marketers may nd that consu

ers are less willing to pay a premium or internation

brands when powerul regional brands oer quality pro

ucts at more reasonable prices.

Who is the new Chinese consumer? To put it in broad

strokes, the current demographic target identied by survey

respondents is middle class, educated, urban, and married,

and evenly split between men and women.

Urban, however, no longer implies that they are in

the Beijing-Shanghai-Hong Kong corridor, which is why

32% o non-Chinese companies said expanding into new

regions in China is a primar y marketing goal this year, and

that number jumps to 42% looking ahead three years.

In act, overall, eight-o-ten respondents agreed that the

greatest growth opportunity in China is beyond the rst-

tier cities o Beijing, Shanghai, and Tianjin. (Fig. 6) Thats

not surprising given that China has more than 100 cities

that have populations in excess o 1 mil lion. Or thought o

in another way, many o the so-ca lled second- or third-tier

cities in China have a similar urban population to global

cities such as Amsterdam or Chicago.

For marketers, this means that the growth o Chinas

consumer class appears to be taking place outside the

rst-tier cities. Beijing and Shanghai may be approaching

saturation, and a regional presence will be very valuable

moving orward. These second- and third-tier cities, ater

all, are where the majority o the population lives and as

the middle class gains more economic mobility, theyll

have more disposable income. According to McKinsey, hal

o Chinas 100 largest cities will experience at least 50%

growth in consumption between 2008 and 2015, and 25

wil l double their consumption.

The Shangri-La Groups expansion in China is cer-

tainly evidence o one luxury brands bet on these

second-, third-, and ourth- tier cities. Over the next

two years, it will begin their second phase o expansionto those cities, said Zhu. By 2013, Shangri-La will have

hotels in Chongqing, Diqing, Haikou, Lhasa, Manzhouli,

Nanjing, Qinghuangdao, Shenyang, Tangshan, Tianjin,

and Yangzhou.

Nike said it treats a tier-six city the same way it does a

tier-one city. We have a presence in all the tiers o cities,

rom zero to teen, and we have consistent campaigns in

those cities that center on basketball, said Pestridge. So

scn-T Ct: T N FntFigure 6: th gas gwh ppy cha s by fs-

sh as Bjg, Shagha, a taj.


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chs s n-chs s

Atlanta 4.69mSydney 4.42m

Milan 2.96m

Vancouver 2.22

Zurich 1.15m

Shanghai 15.78m16m

8m

12m

4m

Beijing 11.74m

Guangzhou 9.44mShenzhen 8.11m

Wuhan 7.54m

Tianjin 7.46m

Shenyang 4.95m

Nanjing 3.81m

Wenzhou 2.55m

Tangshan 1.97m

Hohhot 1.87m

Source: uba Agglmas, u nas, Ppla dvs h dpam em a Sal Aas, Wl ubaza Psps:

th 2009 rvs Ppla daabas

The LoNg TaiL oF ChiNese CiTies


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the changing landscaPe oF marketing and adver-

tising in china

Globally, advertising and marketing channels are in a dra-

matic state o ux, and that situation is mirrored in China.

While traditional advertising channelssuch as television

and printremain strong today, their predominance is

likely to be challenged in the coming years.

Among marketers participating in the survey, televi-

sion is clearly the primary channel today or reaching the

Chinese consumer79% o respondents have it as part o

their marketing programs or 2011. (Fig. 7) Looking ahead

three years, it remains in the top spot, but will be used by

just 60% o marketers.

Which new channels will emerge? Marketing execu-

tives at both Chinese and non-Chinese rms oresee a rise

in word o mouth, public relations, online and social media,

and mobile apps as the most potent ways to reach Chinese

consumers in the uture.

Clearly, as marketers look to build brand awareness and

perception among Chinese consumers, television adver-

tising will play its part. But as marketing priorities shit

away rom brand development toward sales and geographic

expansion, other media are likely to play a critical role. In

particular, marketers will likely be ormulating integrated

marketing communications strategies across a variety o

Chinese consumer touchpoints.

But rst, a caveat: Whi le televisions appeal to marketers

is expected to drop o in the next three years, the exo-

dus rom TV is not universal, and is likely to remain quite

potent or certain consumer brands.

Rex Wong, vice president o marketing or Asia at

Anheuser-Busch InBev (AB InBev) China, the multi-national beverage giant with 20 brands in China, said

television is an integral part o AB InBevs marketing strat-

egy. Television is the highest reach medium or every

household in China, said Wong.

AB InBevs approach to television advertising, how-

ever, is not one-size ts all. We are very specic about

which channels in which regions we are advertising on,

said Wong. In some regions consumers watch more

CCTV and some watch more local TV. Viewership habits

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vary dramatical ly, so we have to pay attention to them and

tailor accordingly.

Pestridge o Nike said not to write o television as a

dying medium in China. There is a lot o commentary

about how it is diminishing, but it could play a very impor-

tant role, particularly in cities where there is not as much

access to Internet.

But the cost o broadcast, said Zhu o the Shangri-La

Group, is a one o the major obstacles to marketing in

China. Generally, the price o media is a challenge, but

television in particular, he said.

Whether or not TV will remain dominant is still to be

seen, but what is clear is that TV, while important, is not

the only medium brands are relying on.

Wong, or one, described AB InBevs marketing game

plan in China as 360 degrees, a ully integrated plan

encompassing television, mobile, billboards, sponsorship,

and online.

And some brands will use other, less traditional media

to get noticed. Starting in April, JOVI, the restaurant

chain, will be putting up thousands o vending machines

with JOVI products all over Beijing as a way to attract cus-

tomers to its restaurants.

are chinese comPanies marketing aggressively

enough?

Across the board, a majority o Chinese companies are us ing

marketing and PR eortsTV, online, print, sponsorship,

etc.but not as much as their multinational counterparts.

One explanation is that Chinese companies dont have to

try as hardthey have the home eld advantage. An

alternate narrative suggests that Chinese companies believemore in word o mouth. In act, or Chinese companies,

theres a huge jump in the importance o word o mouth

between now and three years rom now (33% vs. 50% in

three years). (Figs. 8 and 9)

Tian, o JOVI, is a big believer in word o mouth. In

act, he credits word o mouth or the overnight success o

JOVIthe restaurant chain, within six months o opening,

had been approached or a ranchising deal in Hong Kong.

Customers are our best advertising. They are inormed

and wil l just send a link to a r iend or relative, Tian said.

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Figure 8: Whh hals/plams wll y s as pa y makg

pgam cha g 2011?

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For both Chinese and non-Chinese companies, public rela-

tions ranks toward the bottom o their current marketing

communications mix. But three years rom now, something

changes or the multinationals: non-Chinese companies are

much more likely to say theyll use a PR rm (37% now vs.

64% three years rom now).

One interpretation here is that non-Chinese companies

see a PR campaign as something theyll implement once

theyve established a solid brand presence in the market.

According to the respondents at non-Chinese companies,

public relations, is not a way to gain a oothold in the mar-

ket; it is a way to consolidate market position once theyve

introduced themselves to the Chinese consumer.

But or the Chinese companies, the importance o

PR as a marketing strategy only jumps minimallyrom

38% saying it is important now to 45% saying it will be

important in three years, indicating that, perhaps, there

is something lost in translation about the value o PR in

China. For Tian o JOVI, hiring a public relations rm,

even with all the expansion o his brand, i s not on the hori-

zon. The immediate value proposition just isnt clear to

him. We are very closely connected to our customers and

preer to have no proxy between us, said Tian, whose only

investment in advertising so ar has been 5,000 yuan to put

up a coupon online.

online and mobile are the Future

Moving orward, digital and mobile marketing will be a

critical part o the mix or all brands in China, as market-

ers seek to integrate their message across both traditional

and digital platorms. China has more than 420 million

Internet users, according to the China Internet NetworkInormation Center, and its number o mobile subscribers

tops 850 million.

It is not surprising that 90% o survey respondents said

that online marketing is extremely or very important or

reaching the Chinese consumer. (Fig. 10) Still, it is crucial

to see how marketers are using this channel.

Leow, whose agency ocuses mostly on marketing to the

under-30 set in China, contends that digital is almost all

that matters among younger consumers. The Internet is

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For AB InBev, their online and digital marketi

strategy doesnt just involve slapping up some banner a

Rather, it is about inltrating social networks in creat

ways, like creating a virtual bar on the social netwo

Renren, where members can sell beers and compete agai

users. We then select the best bar with the most sa

and send them to the U.S., said Wong. I you look at

trends, people in China are spending more and more ti

online, so we are going to spending more resources on

Internet as a result.

Contests, AB InBev has ound, are also a great way

engage consumers online. AB InBev recently launch

a Karaoke contest as a way to promote their Budwei

brandparticipants made and then uploaded their ow

Karaoke videos to be voted on. At the end o the comp

tition, nalists were invited to go on national television

compete or rst place.

The developing mobile market also remains cr

ical. While marketers dont see it as quite as import

as online marketing today, it will be as vital a chan

within three years. (Fig. 11)

You dont have to look urther than a noodle shop in a

city in China, where scores o customers have phones l

out on the table in ront o them and check them comp

sively, to see that mobile is a heavyweight among marketi

vehicles to net consumers. While still less than one-hal

the population in China has access to the Internet, eve

one has a phone. And when it comes to reaching

emerging middle class and migrant workersthose w

travel rom the countryside to the big c itiesmobile is

way, but companies have to nd creative and cultural ly r

evant ways to execute these campaigns.AB InBev, while it runs its share o garden-variety t

message campaigns, has been making its mobile advertisi

more interactive, noted Wong. Consumers can use th

cell phones to scan bar codes to see i theyve won a priz

Perhaps there is one more implication to the grow

use o Internet and mobile technologies among Chin

consumerscreation o consistent tastes that transce

local and regional preerences. About 85% o survey respo

dents said they agreed that mobile and Internet marketi

would help homogenize Chinese consumer tastes. (Fig. 1

their primary consumption and sharing platorm or every-

thing they do, he said.But with millions o websites, blogs, and dozens o

social networks, what really stands out? Leow believes

Weibo, the micro blogging site similar to Twitter that

has 80 million users and is adding 10 million more users

a month, is a digital platorm that all brands and marketers

should have on their radar. Traditional blogging is kind o

dead, said Leow. When NeochaEDGE created a video or

Absolut Vodka, they promoted it through their channel on

Weibo. In two weeks, just by pushing the video through

their network, the video got 85,000 views.

Figure 10: Hw mpa s l makg ahg h chs

sm ay? Hw mpa wll b h yas m w?

exmly mpa Vy mpa

tdy

tree yer rm

43

61

46

34

Figure 11 Hw mpa s mbl makg ahg h chs

sm ay? Hw mpa wll b h yas m w?

exmly mpa Vy mpa

tdy

tree yer rm

29

42

44

47

1

Figure 12: Mbl a i makg wll hlp hmgz chs

sm ass


29 56 13


15/20


While there are tremendous growth opportunities or

brands in the Chinese consumer marketplace, marketers

also must deal with a number o barriers that could cause

them to stumble.

Survey respondents identied a handul o barriers that

they eel could keep their marketing programs rom suc-

ceeding. (Fig. 13)

lack oF reliable market research

The overwhelming consensus is that there is a dearth o

good market research on the Chinese consumer and mar-

ket. Among survey respondents, 37% said they may be

stymied by a lack o research on Chinese consumer demand

or their specic industry, while 32% said they elt there

was a lack o reliable market research on Chinese consum-

ers in general.

Given Chinas breadth, its unpredictability, and the

diversity o regional tastes, a lack o understanding o

consumer preerences could seriously stymie marketers.

Missteps can be costly, both in terms o the bottom line

and brand equity. Yet even large brands have made serious

mistakes by not getting the right consumer data. For exam-

ple, when it opened its Shanghai outlet, retailer Marks &

Spencer assumed sizing would be similar to its established

Hong Kong store. But it soon ound that smaller sizes were

selling out and larger sizes were sitting on the shelves. It

had ai led to oresee the regional dierence.

In addition, marketers do not appear overly satis-

ed with market research providers in China. More than

10% o respondents rated these companies as either ter-

rible or poor. (Fig. 14)

Clln f Mkt

0% 50% 100%

Figure 13: Wha y blv a h ky bas ha wll kp y m

alag y makg mmas vsm cha?

Lk rprey e cee mrkeg mmu dury

Lk relble mrke reer cee umer demd r ur

dury

Lk relble mrke reer cee umer geerl

ierl lk expere/ kll e r c

Regul c

Duly dg r reg rl le c

Exerl (uppler) lk experee/ kll e

Lk relble mer guge ur Roi

Regul rm ude c

ibly m brd ey

38

37

32

30

27

26

24

24

17

14


16/20


lack oF transParency

Overall, 38% o survey respondents said a lack o transpar-

ency in the Chinese marketing communications industry

has the potential to hold them back.

The issue o transparency is less about responsible busi-

ness practices (the vast majority o respondents elt that

marketing practices in China could generally be considered

responsiblesee sidebar below) than it is about consistent

standards among agencies. In particular, this transpar-

ency needs to relate to some o the less obvious acets o

agency operations, such as media research, media planning,

and media buying. While Western agencies typically have

created processes to make these areas less opaque, Chinese

agencies oten are not yet at that level.

0% 50% 100%

Figure 14: Wha a y gal pps h pma h

mak sah pvs cha?

Exelle

Gd

neurl

Pr

terrble

D k

20

38

30

10

1

2

survey repde l ere ked bu ey el mr-

keg veed by e cee mrke. ieregly, ere

lle dpry beee exeuve rm cee d -

cee mpe. M el cee umer d e

cee gverme d mly pve ude rd

mrkeg. (Fg. 15)Regzg e mpre preg e repu-

mrkeg ver e lger erm, mre 90%

repde el mpr r e mrkeg dury

ebl el drd r mrkeg mmu.

a e dury gr c, uld led greer el-

regul, prulrly re reled ru d redbly.

ChiNese aTTiTudes Towards MarKeTiNg

1

1

1

29

28

41

20

60

56

53

67

9

16

5

12

2

Figure 15: As was makg cha

Mrkeg pre c uld geerlly be dered berepble

cee umer pereve mrkeg vrble/pve lg

i mpr r mrkeer c d er repreeve berkg el drd r mrkeg mmu

te cee gverme pereve mrkeg vrble/pve lg



17/20


3%

2%

process. The consumer opportunit y in China may be g re

but it is vital to remember that China is still a developi

market, without a long history o management training.

not a matter o nding a person to take a key role, but n

ing the right person.

Among survey respondents, 30% said a lack o Chin

ocused expertise and skill-sets within their compan

Finding the right skills

Talent is an important issue or both Chinese and non-Chi-

nese marketers, particularly as they begin ramping up their

Chinese operations. But with this growth, companies are

rightly concerned that they may not be able to take advan-

tage o the business opportunity in China because o a

shortage o qualied executives and managers to drive the

Figure 16: Wh a y ly g bl y makg

lashp cha?

non-chinese comPanies

n-chs m wh h mpay chs aals m wh h mpay n-chs m s h mpay chs m s h mpay

n-chs m wh h mpay chs aals m wh h mpay n-chs m s h mpay chs m s h mpay

chinese comPanies

chinese comPanies

13%16%

4%

67%

55%

32%

11%

Wh wll y b g las h yas m w?



chinese comPanies

chinese comPanies

32%

37%

10%

27% 44%

31% 12%

7%

Wh wll y b g sa h yas m w?Figure 17: Wh pmaly y bl y makg

sa cha?


66% 67%

15%

5%

9%20% 16%

51%

10%

10%

29%

13%

22%

36%

29%


18/20


At NeochaEDGE in Shanghai, Leow said all o his st

are Chinese, but speak English, which is a non-negotia

skill or anyone he hires. A lot o the decision makers

still Western, so its important to be able to have a sta t

can interace with them, he said.

The consensus is that any brand hoping to make r

in China has to have a sta on the ground going o

to events, concerts, and bars and young enough to

digital natives, or at least understand social networki

sites such as QQ Renren, YuKu Weibo, Kai ser Kuo, a

Xiaonei.com.

The conventional wisdom in China is that there i

new generation born every three years. So how do bran

stay on top o those trends? Pestridge o Nike conten

the most important thing is Hire an amazing group

local sta, who speak English, and who can keep you v

inormed, he said. Interestingly, 95% o Nikes corpor

sta in China is local and 80% o Pestridges direct repo

are local.

Still, as the data show, at least or now, there will co

tinue to be a bit o a hybrid in stafng. Youll need

bring in expatriates where you want some unctio

expertise, but then youll want someone local to ocus

digital, because Im not sure what someone rom the ou

side can teach the Chinese about digital, said Pestridge

holds them back. Moreover, 26% said they could be

aected by difculty in nding and retaining critical tal-

ent in China.

When it comes to talent, both Chinese and non-Chi-

nese companies are looking to create the right balance o

East and West. For their marketing leadership, compa-

nies appear more concerned that the executive come rom

within the company than that the executive is rom China

or not. (Fig. 16) Among non-Chinese companies, 32% are

currently recruiting non-Chinese rom within the com-

pany, and 55% are recruiting Chinese nationals rom

within the company. Just 13% are currently recruiting

leadership rom outside the company. Chinese companies,

as might be expected, are most likely to recruit Chinese

nationals rom within the company as their marketing

leaders, but still, a signicant 13% are recruiting non-

Chinese leaders rom within their ranks.

In three years, interesting ly, the situation ips. Chinese

companies are more likely to recruit non-Chinese rom

outside their company as their marketing leaders, while

non-Chinese companies are more likely to be looking at

Chinese rom outside their company.

For marketing sta, both Chinese and non-Chi-

nese companies are looking to recruit Chinese nationals.

(Fig. 17) Today, they are looking primarily within the

company, and in three years they expect mostly to be

recruiting rom elsewhere.


19/20


authentic and nd ways to be locally and culturally re

vant; hire a young, energetic local sta who can help y

navigate the ast-changing digital landscape in China; a

keep your eye sharply ocused on the rising cluster o citi

just to name a ew.

Though much remains to be learned about the Chin

consumer, one thing is clear: companies will need sav

advertising and marketing more than ever to decipher m

ket dynamics in the years to come.

christiaan rizy

DiREctoR

stuart Feil

EDitoRiaL DiREctoR

brenna sniderman

REsEaRch DiREctoR

hannah seligson

REPoRt aUthoR

methodology

te rm repr bed e reul urvey d e--e erve dued by Frbe ig Jury d Februry 2011.

Frbe ig, e wrld Feder adverer, urveyed 310 exeuve repble r reg, mgg, r exeug er m-

pe mrkeg rege c. all repde ere perlly led c; 57% rked r mpe re edqurered c, d 43%

rked r mpe re edqurered e U.s., Eurpe, r a/P (ude c). t rd e mpe (67%) d ul reveue $1

bll r greer, d e remg 33% d reveue le $250 mll.

nerly rd repde (64%) eld c-level r er er exeuve le, ludg cEo/prede/mgg drer, cMo/ed mrkeg, d

coo. te remg 36% d le ludg er ve prede, ve prede, drer mrkeg, d mrkeg mger.

Despite meteoric economic growth, China has remained

a riddle to some companies. Global powerhouses such as

Home Depot, eBay, and Best Buy have ound it a chal-

lenge to translate their international successes into

Chinese gold. It has become increasingly apparent that a

one-size-ts-all marketing strategy oten does not guar-

antee success in China. Additionally, dierences persist in

the approaches, strengths, and weaknesses o oreign and

domestic companies.

However, some trends or success shine through

consumers want to know what your brand stands or; be

CoNCLusioN


20/20

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Marketing to the Chinese Consumer[1]

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