The growing wealth of the Chinese middle class has made China into a tempting destination for rapidly expanding international firms. Chinese tourists make up one third of all luxury sales in Paris, spending more on certain brands than others. How can global brands adapt their brand for the new Chinese consumer with high spending power?
Understanding Customer behavior is only the tip of the iceberg; far under the sea are deep-seated cultural norms and habits. Although China has evolved rapidly in terms of economics, the culture has remained constant over thousands of years and shapes the decision-making process of Chinese consumers.
To fully understand the buying behavior of Chinese consumers, let’s take this topic back to something simple:
China is a collectivist society.
Photo by: Tim Hipps
That’s something many people have heard of but not many understand.
Collectivism implies that individuals have no identity without recognition from others. That’s why Chinese culture emphasizes the need for self-expression and success. In addition, people generally avoid being too different from others in order to be accepted by the larger community.
In order to adapt your brand to Chinese culture and succeed in China, below are seven things you should think carefully about.
1) Identify the center of influence
Chinese consumers have the habit of collecting information from multiple sources and comparing their options thoroughly before they make purchase decisions. A customer’s inner social circle is their center of influence. Since Chinese consumers avoid being too different from others in the community, they are more likely to listen to the suggestions of their family and friends.
2) Take care of the public display
Face (or 面子 “mian-zi”) is what Chinese people use to express their own sense of dignity or prestige in social contexts. To look at it from another angle, it is the desire to be recognized by the collective, and to “save face” is to preserve your recognition by the community.
As a result of the above, products that are consumed in public enjoy better perceived value in relation to products used at home or in private.
3) Packaging matters
Your network and relationships (or 关系 “guan-xi”) is the key to success in China. Chinese consumers show a higher level of involvement when they are purchasing goods for the purpose of preserving their social status and network. Thus, good packaging would serve the to improve a Chinese consumer’s face (“mian-zi”) and network (“guan-xi”).
4) Invest in your brand’s image
Quality matters, but your brand image matters more. Chinese consumers look for acknowledgement from peers and if your brand is able to provide that for them, then it has a high perceived value. This value is the key differentiator between your brand and your competitors. If your customers do not receive the expected recognition from others after buying your brand, they may try alternatives next time.
5) Always make your brand value clear
Generally, Chinese consumers haven’t established emotional ties with brands yet. To gain a competitive edge, brands should pay attention to the quality and also the additional value of the product. For example, children’s products are better when they provide educational value on top of their basic functions.
6) Satisfy the need for security
Change has always historically led to chaos in China; thus, Chinese culture is generally conservative and people prefer to avoid uncertainty. The need for financial security and safety nets for many aspects of life is high so it’s important to keep this sentiment in mind when crafting your Chinese market messaging.
7) Be sensitive to the subtleties of the Chinese language
Brand messaging is the link between the brand and its potential customers. Crafting messaging that will resonate with your target audience requires excellent understanding of both Chinese and Western culture.
China is going global, but that isn’t the same as Westernizing. Taking time to thoroughly understand customer behavior is the first step towards winning market share in China, and even a small market share in a large country like China could means millions and millions of new customers.
Photo by: Cliffano Subagio
Written by: Xunshu Li
Edited by: Kristie Wong