Should you Market in China?

By Jessica Egyhazi

Have you ever been curious about traveling, marketing, or operating overseas? If so, the January 26 event, Marketing in China – Trends to Adapt and Succeed in Today’s China hosted by Asia Business Consulting was for you! Dr. Lydia Price, Associate Dean at Shanghai’s Chinese European International Business School, enlightened attendees on the real China; a place where you have to wrap your mind around the enormity of “1 Billion” to succeed. One billion consumers. One billion opportunities for growth. And 0ne billion potential roadblocks for expanding US businesses. If you missed this event, or want to delve back into the topics covered, let me fill you in on some of the highlights.

To succeed in China, you need to do three things:
1) See Through Local Eyes.
Companies need to get a grasp on local markets and consumer behavior. Chinese consumers have yet to become brand loyal. While this is an exciting opportunity for companies hoping to capture some of the 11 trillion dollars of Chinese consumer spend (per Euromonitor, 2008), this also means that consumers are still surveying all of their purchasing options; Chinese consumers may buy a Porsche one year and a BMW the next. I discovered that Chinese consumer behavior does not function in the same was as in the US and that research – and trial and error – is needed to build brand loyalty from scratch.

2) Be Realistic.
Identify actual market opportunity. Markets might be much smaller (or larger) than you think. The life stage segments that marketers target in the US do not correspond to those of Chinese consumers. While I expected some differences between the life stages of US and Chinese consumers, I was amazed to see just how much our experience varied. A great suggestion for anyone looking to market in China is to not target products to specific age groups. If you do, your efforts will be obsolete in less than 10 years. Take a look at why this is the case:
Age ------------in US----------------in China
Age 64+ -- Retired -- Experienced Japanese Invasion/ China Civil War
Age 54-63 --Empty Nest --------- China Cultural Revolution
Age 42-53 --Kids in University -----Recovery, Mao to Deng
Age 30-41 --New Families ------ Open Door, SEZ, RuralReform
Age 18-29 --University, New Job ----One Child, Market Economy
Age 0-17 --Youth -------Internet, Consumer Society

3) Be Pragmatic.
The best way to succeed is to form a partnership with China to help them solve problems like rapid urbanization and an aging population. With increased urbanization comes abundant opportunity, but also great problems with infrastructure, resources, and overpopulation. As in the US, an aging population means that those entering the workforce cannot generate the income needed to support those retiring from the workforce. A great piece of advice is to set up your business practices to help the government achieve their goals and they will help you achieve yours.

Dr. Price’s presentation drove home the challenges and opportunities facing US businesses interested in China. More than I could’ve learned from a case study or a 2-week vacation. If you work at a growing company or simply enjoy gaining world perspectives, you would definitely benefit from similar events from the MN AMA or Asia Business Consulting in the future. I’ll be there and I hope to run into you!

Do you have experience with China or thoughts on this topic? Add your opinions and comments to this post now.

Jessica Egyhazi is a marketing and communications consultant and an associate principal with Misaki Marketing Communications.