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Everything You Always Wanted To Know About The China Consumer

Posted in China Business

Just read China Smack’s interview of Tom Doctoroff  and, as is the case whenever I read Doctoroff, I leave impressed. I am always recommending Doctoroff’s book, Billions: Selling to the New Chinese Consumer, and his Huffington Post writings to my consumer goods clients. Though there are definitely those whom I respect who disagree with Doctoroff’s thinking, I chalk that up to advertising being as much art as science.

The highlight to me from the interview is where Doctoroff describes the Chinese consumer as being driven by “self-protection” and “status projection”:

Of course, one size doesn’t fit all. But there are “unifying themes” and “variations” on these themes. It’s like a Bach Fugue; there is a primary melody with interpretations of that to address target consumer and geographic considerations. Some roll their eyes when I harp on about a Chinese “worldview” that is fundamentally different from Westerners’ basic motivations. But smirks be damned. In order to touch hearts, brands need to be brought into alignment with this worldview. After 13 years here, I am fundamentally convinced that there is a unifying “Confucian” conflict — between self-protection and status projection — that brands have a fundamental role in resolving. Unlike practically any other country (Korea and Vietnam come closest), China is both boldly ambitious (ladders are meant to be climbed and meritocracy is a cherished value) and regimented, with hierarchical and procedural booby traps for anyone who hasn’t mastered the “system.” This tension between upward mobility and fear-based conformism shows up everywhere, in every business meetings, in every struggle with a mother-in-law, in every new generation release on the internet. Brands that help consumers simultaneously stand out and fit in have the greatest appeal. Diamonds, for example, are popular because their sparkle is conspicuous but, at the same time, elegant and understated. The same goes for Mont Blanc’s six-point logo. Rejoice shampoo’s proposition fuses confidence and softness.

Sounds good to me, but what do you think?

  • DaMn

    The article is worth a read.
    Doctoroff says “After 13 years here, I am fundamentally convinced that there is a unifying “Confucian” conflict — between self-protection and status projection — that brands have a fundamental role in resolving.”
    “Beloved brands are, to state the obvious, emotional propositions, ones that fuse functional and emotional appeal.”
    So what is the “emotion” or “emotional” boundaries of those strata between self-protection and status projection? Also, do these play to the vast middle class? I would argue diamonds may fit the bill because they are sparkly as well as understated yet that does not fit the emotional gap for the true middle class.
    In the article Doctoroff says “Once you realize that individuals earning 20,000 RMB per month in both Shanghai and Wuhan have more in common with each other than do denizens of specific cities in at different socio-economic strata, things become simpler.”
    Sure, experience with monetary expenditures is its own identifier yet people making 20,000rmb are not, not, middle class. The middle class is much lower.
    Right now the people making 20,000rmb are the next tier down for the advertising agencies who have already picked the low hanging fruit of the rich.
    They have some distance to go before they figure out how to brand to the true middle class. It’s like the P90X. They make $400B a year selling to people who would exercise whether they found a new tool they liked or not. Its reaching those that need a tool in order to engage that’s tricky.
    When you make 20k a month in China you are spending money whether an ad catches your eye or not. Right now advertising is just about making people comfortable with purchases they already want to make rather than giving people a reason to open their wallet and give up their savings. Weigh the cost (emotion of loss) and drive them to engage, not just compare the emotions of post purchase.
    High end luxury good do not usually carry this type of driver…
    ““Emotional release” is a critical driver — there are already 150 million micro-bloggers! — and this urge is fueled by on-line anonymity. For Facebook to succeed in China, it would have to scrap its “real name” policy. Despite the explosion of life style alternatives and individualism as an aspiration, the Chinese are constricted when it comes to self-expression.”"

  • outcast

    The “confucian conflict” is a perfect showcase as to why confucianusm doesn’t belong in this century. It creates systems that are too rigid to adjust quickly to changing situations and are prone to abuse and corruption by elites.

  • http://Www.styleintel.com Bruce

    This article on how to sell to the Chinese consumer is interesting: http://blogs.forbes.com/bluecarreon/2011/05/31/how-to-sell-luxury-to-the-chinese-2/

  • EyeInBeijing

    I agree that there is little difference between eating dogs or pigs or other animals (pigs are smarter).
    For the record, Hitler was almost definitely NOT a vegetarian (although that’s neither here nor there).
    http://www.slate.com/id/2096259/

  • Contato

    Good link. I like Doctoroff. He does use some strange language sometimes, but he is one of the few people out there willing to give information beyond the “China is many markets” crap most people are dishing out.

  • Ollumi

    I don’t think this is so much the China Consumer being described rather than one particular category of goods to the China Consumer. This also ties in to how little he describes the nitty-gritty of the trench wars FMCG giants P&G and Unilever, big clients of his, have to fight here. I personally abhor the attempts to package every good into that one particular category he describes with such lurid enthusiasm because one, it’s distasteful, and two, it WILL backfire(and on a scale beyond business dealings), sooner or later, though obviously the bounty of the sooner is overpowering the specter of later right now.
    Quite possibly it’s just not as sexy to describe why price is the driving factor for a dominating portion of the local market, or simply not politically wise to venture into describing why.
    In any case, I find his book, like that other book with billion in its title(one billion customers, I think), not very relevant to small or medium sized businesses trying to carve something out here, as according to his absolutely correct analysis of Chinese willingness to veer toward “big brands”, they’d get beat up by big brother and big sister OEM’s who might not be as good at what they do but are “bigger” easily going for those kind of strategies, perhaps small manufacturers of luxury goods will beg to differ.

  • http://www.sinotools.com rolla

    Very useful and Interesting. Thanks.