By Gordon Chu | Tuesday, August 25, 2009
In the past decade China has been the buzz of companies and brands from all four corners of the world. Everyone dotes on China as the anchor in global expansion from McDonalds to Intel – there really isn’t an industry that hasn’t recognized the sheer potential of China’s economic standings. Today, it’s almost difficult to not read in every advertising news article the mention of opportunity or this “emerging middle class” in the China market. Especially in dire economic times on the domestic front, many companies find reprise by merely looking east towards the new land of global consumerism. But, underneath the superficial layer of understanding the “what” or opportunity to be had, we are still trying new ways to figure the “how” part of the equation and capitalize on this wave of Chinese consumers.
Needless to say, there is no magic answer to the “how” but understanding the overwhelming complexity of the Chinese consumer is a great first step at paving your own way.
Part of that complication roots from hypocrisy of cultural, geographic, and economic influences that really have surfaced recently with the boom of China’s economy. Not only do we (as brand advertisers and content providers) need to contest with a culturally isolated country that has only begun to open its doors to global persuasion, but we have to deal with an unprecedented and ever-changing /growing consumer group at unprecedented speeds. In other words, making sense is the first step to understanding.
Frugal / Lavish Shopper
With years of endured struggle of poor economic times and 1.3 billion people to contend with, the idea of social Darwinism is a natural part of growth in China’s modern history. Consumers were poor and luxury items weren’t even a thought when your main concern revolved around putting food on the table on a daily basis. Thus, the advent of the frugal shopper where saving is a matter of survival. Although the mindset of saving may be foreign to the rest of the world, it has been engrained and passed down from generations to generations and is a big factor in buying behavior.
On one hand, there is the inclination to be frugal with spending and saving as noted above. On the other, we have a booming “emerging middle class” with access to significant purchasing power that is paving the way with consumer and retail spending.