Chinese consumers have become one of the most sought-after prizes of marketers. While many of the world’s consumers flounder under the weight of the GFC, China’s middle class just keep spending more. But such a prize has brought many courters, making China one of the most competitive markets in the world, and a market where the rules are constantly changing. Below are 8 key facts that anyone selling, or hoping to sell to Chinese consumers needs to know:
1. Chinese consumers are less loyal to brands
Chinese shoppers are new to purchasing many products and don’t share the same ingrained history for brands that western consumers do. On top of that, store shelves are crowded with a huge range of brands, with constant additions of new and flashy products and promotions, tempting many consumers to stray from what they purchased before. Chinese consumers aren’t promiscuous across all categories though, they’re less likely to take risks on products involved in prior scandals and those related to their precious only child.
2. Chinese consumers are becoming increasingly adventurous
After decades of conforming, Chinese consumers are starting to express their individuality with the purchases and hobbies. At the high end, once-ubiquitous flashy handbags are now considered too common and flashy by many wealthy Chinese. The explosion of boutiques in cities such as Shanghai and Beijing are supported by a young and cashed-rich population wanting to stand out from the 1.3 billion. Traveling is another area, where the rate of growth of independent travelers is growing much faster than the rate of package tours. While individualism is something of a niche at this stage, like many niches in China, it is huge.
3. Chinese consumers love websites
It’s essential you have a great website. A mid-2012 survey of by Ipsos China revealed 37.6% of Chinese consumers regularly increase their awareness of brands through websites; more than any other channel. In addition, websites increased purchase intent for 47.5% of consumers, over 50% more than any other channel including newspaper ads, TV commercials, magazines, radio and LEDs. And they’re buying while they’re there, with 36% of Chinese Internet users shopping online.
4. Chinese consumers love viewing websites on their mobile
While having a great website is important, it’s also crucial that your website is optimized for mobile phones. Of China’s 538 million consumers online, 388 million access the Internet from a cell phone, more than the 380 million using a PC.
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5. Social Media is an essential channel for any marketing strategy in China
Chinese consumers have taken to social media like pandas to bamboo. With an inherent lack of trust of Government-controlled media such as TV, newspapers and radio, Chinese are much more inclined to believe information they read on social media. Sina Weibo, the Twitter-Facebook hybrid, now has more than 325 million users, mostly the sought after middle class urbanites who buy foreign products. At the very least, businesses should monitor Weibo to understand what Chinese consumers think about their brand, industry or competitors – 55% of Chinese netizens claim to have started or contributed to conversations about foreign brands on Weibo.
6. Chinese consumers love foreign brands
Whether its cars, sportswear, cosmetics or food, Chinese customers prefer foreign brands to their own. Food scandals and poor quality control mean Chinese are less trusting of local brands and they don’t consider them as cool or stylish. As they become wealthier, Chinese consumers are increasingly prepared to pay a premium for foreign goods, but also expect quality with that additional expense. Even brands such as McDonalds are considered healthier than Chinese food in the eyes of many Chinese consumers as they follow American safety standards.
7. Products need to be tailored to local tastes
Although Chinese consumers love foreign brands, the KFC-McDonalds case study is often cited as an example of how Chinese tastes are often notably different to elsewhere. KFC, who localized their menus in China, has been much more successful than McDonalds who tried to retain a global menu. Just walking down the street of a large Chinese city, fashions that locals consider cool are quite different to their western counterparts. Many multinationals now invest heavily into R&D to create products that will appeal to the unique Chinese tastes, while leveraging the international brand. While many smaller businesses may not have the same resources, it is worth testing the market before jumping in with products that have worked elsewhere.
8. Chinese consumers are the most dynamic on the planet
Noting the points above, it’s important to remember that what’s relevant today, may not apply in a few years. Through urbanization, modernization and internationalization, China is changing on a scale never been seen before, and with these changes, Chinese consumers are evolving at an equally rapid pace. Make sure you keep up.