China is hot right now. With Europe and North America languishing under the ongoing pressures of the Global Financial Crisis, and Japan in similarly dire straights, China remains the only major economy with significant medium-term growth prospects. With a middle class now larger than the United States’ population, all with disposable income, China is a desirable market to peddle your wares.
Unfortunately, it’s no secret that the China market holds significant opportunities. China’s potential has attracted countless businesses from every corner of the world. All the big western brands are there, with seemingly endless resources and best practices from abroad. Many businesses from neighbouring Asian countries are making inroads, often with advantages of proximity, a better understanding of Chinese culture and a large ethnic Chinese population. And in China, many locally grown businesses have a good share of the market, sometimes with Government-imposed advantages and a relatively solid understanding of China. And they’re all fighting for a piece of the pie. The average Shanghai consumer is now exposed to three times more advertising than their British equivalent. In short, China is now one of the most, if not the most, competitive market in the world.
It’s not just the competition that makes the Chinese-market incredibly difficult, but also the consumers themselves. The rules are constantly being reinvented. Nowhere, in the history of the world, has experienced changes of the speed and scale that China is currently experiencing. Take the urbanisation rate, doubling in the past 20 years to more than 50%. And with that urbanization, in one generation China has seen mass modernization, internationalization, consumerization, Internetization (I’m not sure if those -izations are actually words, but you get the point) and a generation of only-children. All these structural changes are redefining the consumer market at a similar pace. Brand loyalty rules that apply in other markets, definitely do not apply in China, with consumers being much more promiscuous than in other countries. With all the competition, demographic and lifestyle changes, trends and rules of thumb that applied five years often don’t apply today.
So how do businesses keep up? It isn’t easy, but your best bet is to invest a little time into following relevant topics on social media in China. Social media is a buzz word in almost every market, but nowhere is it more prevalent than in China. Because television and newspapers are controlled by the Government, Chinese consumers trust traditional media less for information than social media.
Social networks such as Facebook and Twitter are blocked in China, but a number of home grown networks have filled the gap and are very successful. Sina Weibo (a Twitter-Facebook hybrid) is China’s most popular microblog. It launched in August 2009 and now has more than 350 million users, almost all who are the higher income, middle class, urban dwellers who are fuelling China’s consumer spending. Sina Weibo’s influence in China is astounding, shaping public opinion and even causing The Government to change policies. It’s also relevant for foreign businesses selling to consumers, with 55% on netizens claiming to have contributed to conversations about foreign brands on Weibo.
Weibo provides an incredibly insightful way to monitor what Chinese consumers think about brands, products and industries so businesses can better understand what appeals to them, and what doesn’t. It also helps gauge how attitudes are changing. If red flags appear, they’re most likely to show up first on Weibo.
Entering a market as complex and competitive as China is unlikely to be an overnight success. It requires an investment in both time and money, so the more insights you have into the market, from a source such as Sina Weibo, the more effective you can be with that investment.
Make the right decisions and avoid the wrong ones. Good luck!
Sina Weibo
#Keeping #Chinese #Consumers
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