China has become one of the most competitive consumer markets in the world. You don't need to look far to see signs of it. In Chinese cities you're bombarded with advertising—glowing screens on sidewalks, in taxis, waiting for the lift, in the lift, even projected onto the cavernous walls in subways. Billboards, magazines, newspapers, television... advertising is omnipresent.

Consumers in Shanghai are subjected to three times more advertising than their British counterparts. And advertising in China is still growing: 14.5% more was spent on advertising last year, growing at almost double the rate of China's economy, at a time when consumer spending is dropping as a percentage of GDP.

In such a competitive and dynamic market such as China, building a strong brand is imperative if you are to be picked out from the clutter of products.

Brand is important in China

Consumerism is relatively new to China, and many brands haven't established the same deep-rooted relationship with customers as they have in the West. An often-cited fact about Chinese consumers is that they're less brand-loyal than consumers in Western countries. McKinsey research has discovered that just 46% of Chinese consumers are loyal to one brand, compared with 71% of American consumers.

But that doesn't mean you don't have to invest in building your brand in China.

Chinese consumers are promiscuous, yes, but brands are still very important to them. Brands are much more likely to be considered if they're in their sphere of awareness. So, although they may not be loyal to one brand, they are "loyal" to a group of brands.

Corruption and countless product scandals in China mean Chinese consumers question the creditability of many products and look to reputable brands for safety and quality. 2011 BCG research found 70% of Chinese consumers cited brand as a reason for trading up across a suite of categories surveyed, higher than any other major market in the world.

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ABOUT THE AUTHOR
image of Mark Tanner

Mark Tanner is the founder of China Skinny, a service helping Western businesses better understand Chinese consumers. He has been in marketing since 1998, in North America, Europe, Australasia and, most recently, China, with a short break in Africa paddling down the Nile.