Reaching China’s Consumers
China today becomes a territory where most foreign marketers hunting for opportunities. They cannot find other places that are more appealing than China market with the advantages of this market—largest population in the world—and the rapidly increasing consumer spending.
However, It is a special economic operating system, with different customs and unique consumer behavior that put obstacles to this market. It is quite crucial to understanding the specificity of the consumers in this market, which helps to overcome nagging uncertainties about the country’s stability.
Different Way of Consumption
For the Chinese, consumption is a novel pleasure, having had very few choices for four decades, Chinese consumers are eager to see what’s in the stores. They are indeed, curious about the foreign goods and are interested in seeking and selecting new and modern goods. Consumer’s limited experience with modern marketing leads them to depend on reputable brands. In a wide range of goods surveyed, brands accounted for one-third to one-half of all consumer expressions of intent to purchase. Fancy displays and prime shelf space don’t impress Chinese consumers; they have time to browse and will look for a product if they’ve heard of it. Marketers need to build great fame for their brands to appeal the Chinese consumers. Any distributions like official media-television, website, newspaper or some delicate outlets located in the downtown of big cities like Beijing, Shanghai and Guangzhou can imperceptibly influence the targeted customers.
Chinese consumers are different from the western who may regard consumption as a matter of routine, sometimes even a chore. For the Chinese, however, consumption is a novel, pleasurable, and important part of the day. And in pursuing this pleasure, they do not hesitate to spend the bulk of their newfound “wealth”.
Face consumption in China
In China, many people are willing to spend one-month salary to buy something, not for practical value, not for taste, not for quality but only for one thing: The face consumption. Face consumption is very popular in liquor and tobacco in China. In the conference of People’s Congress in Shanghai, a new topic about prohibiting “Maotai” from government expense was put forward. Mao-tai is the symbol of luxury liquor in China. A bottle of ordinary Mao-tai costs over 2,000 Yuan while the cost is only 40 Yuan.
Packaging in China
Moreover, it is also believed that packages of the goods in China have a subtle relationship with Faces of the consumers. Chinese consumers, tired of the low quality of their own goods, have a right regard for Western imports. Many Chinese brands that once carried premium prices is fast losing market share to locally made foreign brands. Even so, surveys show that consumers may end up rejecting a Western product that is made in China if its packaging does not look the same, or at least closely resemble it, the packaging used in international markets. Chinese consumers, tired of the low quality of their own goods, have a right regard for Western imports. Locally brewed Carlsberg beer and imported Carlsberg are sold side by side, but the import commands a 20% to 50% premium. Moreover, many Chinese brands that once carried premium prices is fast losing market share to locally made foreign brands.
Culture of Consumption
Another aspect of Chinese culture that influences buyers’ behavior is the reluctance to pioneer. Typical Chinese consumers do not want to be among the first to try a new product, but the discomfort of being left behind may make them think that if the neighbors have tried it, they had better follow it soon. Trials by early buyers thus soften the perceived risk for followers, who are then inclined to pile on in their haste to buy. Referral is the most powerful way of expanding trials to the first wave of consumers.
Last but not least, an old Chinese proverb says: Never make a purchase until you have compared three shops, a statement that is still working today.
See also our latest post about Chinese Consumers on Facebook:
Meet the #Chinese consumer: a must-watch video to know more about #China.
Posted by Daxue Consulting China on Thursday, October 29, 2015