In China, last week’s insights can lose their currency in the blink of an eye. The market continues to evolve at an incredible pace as consumers constantly seek the thrall of the new. At Cannes International Festival of Creativity, four China marketing experts joined our own Rachel Catanach, president, Greater China, to debunk some commonly held but misguided perceptions about Chinese consumers in the Connecting Culturally in China session.
Myth 1: Chinese consumers like big Western brands
China marketing expert and author, Ashley Dudarenok, emphasized that the perceived wisdom among many in the West is that Chinese consumers are either cheap and favour Western brands or they are super-rich and just want to buy it all.
But, as she pointed out, in China, no one size fits all. “Chinese consumers are among the world’s most sophisticated and spoiled for choice. They are very digitally savvy and have high expectations of brands and products. They care about quality and often less about price. They are also very different from city to city and region to region. Consumers in Tier 1 and 2 cities such as Beijing, Shanghai and Shenzhen have considerably more buying power. That’s why it’s important not to treat China as one homogenous market. You wouldn’t sell to Germans in the same way you would sell to Spanish, so why would you do this in China?”
Myth 2: Everything is digital
While it is true digital payment systems dominate and little cash is used by China’s netizens today, younger consumers are also interested in the offline experience, said Terence Chu, CEO and Founder of APAX Group.
“The younger generation is more willing to accept new things. Younger consumers will research goods online but are also attracted to memorable retail experiences that offer them exclusivity and something special. Offline retail experiences, events and activities help to build brand affinity, particularly in the luxury sector, where the current trend is for younger consumers to buy entry-level lux goods.”
Myth 3: Chinese consumers like to travel in groups
Marriott International’s (client) Chief Sales and Marketing Officer for APAC, Peggy Fang Roe, discussed that while tour groups still comprise around 50% of Chinese travel, self-guided travel is becoming more popular, particularly among China’s 1st and 2nd tier cities.
“Chinese travelers are especially interested in being the first to discover new places and to be the first to introduce new destinations, restaurants and experiences to their friends and family. Travel to Antarctica has been rising and more recently, Game of Thrones generated a significant wave of travel to Croatia.”
Myth 4: Celebrity KOLs work best
One of the most surprising trends this year has been the demand for down-to-earth KOLs. While celebrity KOLs can drive online sales, many consumers are preferring authentic endorsement from people like them.
Rachel Catanach said the shift to authenticity is “an opportunity for brands to build longer-term relationships with KOLs that can inspire greater consumer loyalty. But choosing authentic KOLs is an art and a science. It takes longer and is sometimes more complex. This requires commitment from brands who often need to see results now, now, now.”
The last word from Peggy Fang Roe: “Behavior shifts can happen overnight. Relying on long research projects or last year’s data can easily take you in the wrong direction. Marketers must be living and breathing in the online communities every day to be effective.”