MARKET OVERVIEW

Featuring the world’s largest auto market, the most avid luxury products buyers, a rapidly growing middle-class and upper-class, China is indeed one of the rare markets offering tremendous growing potential and opportunities. However, it could be fatal for North American businesses to think that Chinese simply follow the footsteps of Westerns. A more culturally-savvy approach should be adopted to analyze these consumers deeply influenced by the continuous pull of their cultural and historical discourse.

WHO IS MODERN CHINESE: A DEFINITION OF A SPECIFIC MARKET SEGMENT

Higher education, increasing disposable income as well as fast-growing online communities are all factors which have helped nurture a large pool of sophisticated Chinese buyers. These customers are mostly young professionals, entrepreneurs or the offspring of wealthy families. When compared to their peers in mature markets, these urbanites are relatively younger, a direct consequence of China’s tremendous growth since the economic reforms of the early 1980s, and they are much less financially conservative than their parents. However, their spending behavior has been greatly influenced by their own micro experiences vis-à-vis their country’s global development, a fact that renders these customers and their spending patterns inherently different from their North American counterparts.

EXPANDING SMARTLY: ON THE CAPITAL IMPORTANCE OF PLANNING AHEAD

Exporting to China without careful planning could be compared to walking in the dark. Before your expansion to China, it is important to “light a torch” by gaining customer-oriented insights, a capital step which could help an enterprise to more smartly package its brand and its ultimate appeal for the Middle Kingdom’s customers.

Insights And Understanding Your Target Market

Understanding a target market involves a lot of factors, from customer preferences to buying behavior.

Bear in mind that a product which is well received in North America doesn’t necessarily mean guaranteed success in China. When you say: “We have the best product”, do you instead mean: “We are recognized in North America so we can be also recognized in China”? Right, you have worked hard to improve product and build your brand over the years and it works HERE. Think about the million-dollar lesson that Home Depot finally learnt: The American way did not work out. Chinese customers prefer the “Hire-someone-to-do-it-for-me” rather than “Do-it-yourself”; this stands as a bitter example reflecting the consequences of ignoring the subtleties of a different market and its own habits. And it ultimately leads to an ignorant approach not recognizing the importance of culturally adapting an offering to its local reality and needs.

Also, it would be a faux pas to consider China as a homogenous market. Just like Europe, the Middle Kingdom features many sub-markets, separated within clear boundaries of habits. The question then becomes: is your product or service targeting buyers in first-tier, affluent cities, lower-tier cities or online consumers? A well-defined target market saves you time and money, whilst helping you focus on constantly improving product and service to respond to your real buyers’ needs.

The Know-Your-Client rule always holds true, and this is especially relevant for a country as complex as China. Conducting salient, culturally sensitive research won’t necessarily cost you much time or money, but it will help you to grasp the target market’s needs, preferences, and behavior so that you can adjust and adapt your successfully branded product package here, and make it equally prosperous in China!

Branding, cornerstone of your marketing planning

After adapting your offering according to the specific character of a target market, it’s now time to think about how to package your brand.

Contrary to the traditional misconception, Chinese consumers are highly brand conscious. Imbibed by Confucianism for more than 2500 years, Chinese people have a conflicting desire for fitting in and standing out. Combined with today’s safety issues in many consumer products, they also thrive for quality and security. What can satisfy these needs? Formulate a unique brand experience that directly speaks to them. Local brands can hardly seduce nowadays’ sophisticated consumers, which they perceive as lacking in both quality and social aspiration. Accordingly, they then turn to foreign brands, from which they can enjoy the associated quality, safety, service and social status that come with the expertise these brands have developed in their local markets. The key to success here lies in cleverly finding a way to appeal to Chinese consumers’ heart and their longing for quality and social recognition, to convey a consistent brand message, and to create a unique experience in every point of contact.

It’s important to adapt your brand name. Neglecting to adapt it or simply translating it could prove to be one of the biggest mistakes you could make in your China strategy. For example, Best Buy is suffering with its Chinese name “百思买” (A name that roughly translates to “think hundred times before you buy”). Walmart, in spite of being the world leader in retail, was not able to compete with its French counterpart, Carrefour, who understood the discursive power of a branding upon its landing in China, and knew that attaching much importance to cultural adaptation and interpretation of its brand was crucial to its global strategy in the Middle Kingdom. Carrefour now enjoys a great success of its branding strategy specifically developed for China: « 家乐福 » (Family with happiness).

A good brand name stands as the cornerstone of your business; indeed, it should be its heart and soul. This powerful vehicle you drive can carry your brand from market entry to subsequent daily business activities. Creating an impactful image with a pertinent Chinese brand name can have major repercussions for your product offerings, and can serve as a potent inspiration for customers who will be impressed by your cultural sensibility to their reality and aspirations as consumers. Intelligent thinking and long-term hard work will pay off with the recognition.

CONCLUSION

Despite the depth and width of the Chinese markets, it certainly is still accessible for Canadian SME with limited capital and manpower, on the condition that entrepreneurs take both strategic and psychological approaches to expand their brand, products and services on a step-by-step, gradual basis. I propose 3 key steps that can help you cross the Great Wall and stand out from your global competition:

1. Understand the culture of your target market(s) to unlock misconceptions or mysteries that one might have not even noticed;
2. Formulate your product offering and brand strategy for China, to bring out your unique selling point and to touch your potential Chinese consumers. Make sure that you can control brand consistency through every point of contact and that your distributors are constantly updated on the same page.
3. Keep listening and building relationship with your customers, and adapt continuously with a global vision and a local strategy adapted to both patterns of behavior and cultural relevance.

The French journal Les Affaires from Quebec has conducted a special report on globalization, in which the journalist Claudine Hébert talks about the importance of collaboration with intercultural specialists like Orchimedia in order to garantee the success of Quebec exporters in Asia.

For more information, please visit:

The visit was a successful one with deeper trade ties by signing various significant trade and investment agreements. Chia-Yi also pointed out the opportunities and challenges that Canada is facing in the era where China is becoming more and more influential in the world.

For more information, please visit the webpage of HKCBA.

China, as the turntable of the new millennium economy, offers unequalled opportunities to Quebec entrepreneurs. Whether its raw materials, expertise in aeronautics, ICT, environment, construction and energy or for food products or luxury products, the Chinese are consuming more and are looking for imported products of a higher quality.

You know how to think in the long term and want to increase the visibility of your business, so it is time to reflect on whether your offer is relevant in the current Chinese context:

• 1.3 billion Chinese people;
• 800 million cell phones;
• 500 million Internet users;
• 1.2 million millionaires;
• 20% annual growth in the luxury market.

In order to conquer China, here are some “assignments” that you must do to make your exportation profitable:

1. Stop thinking of China as an emerging market while multinationals consider it to be the priority market. In 2010, purchases made in China were valued at 1,395 billion dollars compared to 1,935 billion for the United States. This second global economic power has immense needs to satisfy in order to support its growth.
2. Conduct your strategy in China with a coherent approach. Exportation to China requires large and long-term investment, thus start with a market study, analyse your competitors, set your objectives and adapt your marketing methods accordingly.
3. Identify where to sell in China knowing that this vast country is composed of several non-homogenous markets. Sell in large cities where the international competition is fierce or in medium-sized towns? There is a large difference in terms of purchasing behaviour and methods of distribution. Or sell on the internet? As the Chinese are buying in massive quantities online and as a third of the country’s mail is devoted to purchases made on TaoBao.
4. “When in Rome do as the Romans do”. Despite Mandarin Chinese being a difficult language to master, it is possible to study the cultural differences that we have with Chinese people, to understand their values and to RESPECT them. Throw away your prejudices, adapt and do not be imposing in terms of how you do business.
5. Brand matters! Opt for a strong brand and strategic position and communicate your added value. The confidence line that you build with your clients propels your brand and the multiplying effect of word-of-mouth in a country where guanxi (networking and connections) is so important.
6. Make yourself known using Baidu. In a new market, people do not have the same references as your existing clients. So how do they create a benchmark from which to measure the credibility of your offer? From the information they find on the net. For your SEO to succeed in China, it is better to identify the key words linked to your China strategy than to translate your existing website.

In brief, your winning recipe here may not necessarily be the most successful in China. It is up to you to adapt your ingredients to cook a creative and unforgettable dish!

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