Question

Topic: Career/Training

Understanding Chinese Markets - Key Elements Reqd.

Posted by Anonymous on 5/30/2006 at 10:54 AM ET 2000 Points
Dear Experts,
Its time for me to be on the other side of the table. :)
Need help regarding an initiaitive I have planned for myself. I would be visiting China next week to understand the markets and learn about key areas of marketing in the area.

I intend to specialize in the Indo-China region subsequently, and so want to first understand the market before stepping in it after a year. I strongly believe that China is one of the most dynamic countries in the region, and holds the potential of becoming the Market Leader in certain key sectors. Over the past one year, I have made a serious attempt to understand the
Chinese markets through various readings, and have been following the developments therein. However, I have limited experience with the Chinese community and first-hand exposure to dynamics of the Chinese industry, which is what I intend to learn in my trip to China.

Certain key objectives include –
- Understanding of the Retail Environment
- Key aspects of Advertising to the heterogeneous markets
- Trade opportunities between India and China
- Consumer Behavior of Chinese consumers
- Purchase patterns
- Marketing in the B2B environment
- Marketing to the middle class
- Understanding of Rural Marketing initiatives

Having said that, my visit has certain constraints, namely -
(a) Limited time period - I only have 30 days available with me
(b) Cost constraint - It is a self-funded initiative, so need to control the costs
(c) Resources - Have limited network to begin with, so do not know many people in that region.

I was earlier trying to get assignments in the region, to get first hand on-the-job learning in the country (which could further translate into full-time opportunities as well if the company wanted). However, most of the companies have reservations in taking me, either due to the time constraint, or since I am not a local guy. Sitting in India, it is difficult for me to convince them of my capabilities as well. So, I have decided to form an itenerary on my own and move forward.

I need inputs from you in terms of how to structure my trip, so as to ensure maximum objectives being fulfilled, within the set timeline. As of now, I am looking at doing the following -
(a) Visiting tier-II cities to understand the Retail formats in that area (Wuhan, Chengdu and Chongqing)
(b) Meeting few experts I know and learning about the Marketing Functions in their industries
(c) Visit Shanghai, Guangzhou and Beijing to learn various aspects of Consumer Behavior in these areas (tier I cities)
(d) Touch upon B2B Marketing through a local contact in Guangzhou

Other objectives, however, havent been catered for, since dont have much inroads into the market. How can I work on the remaining elements, if at all? Do you suggest another approach to understand the country? I know I cannot cover everything in the 30 days, but what are the key areas I should be covering, in my capacity? Am I missing something critical? What are the things you would look at, while entering a country and identifying the business and market potential of that country?

Looking forward to some workable advice. Kindly keep the constraints in mind, and also the resources I possess. Though I would appreciate any inputs on the country, it would be more helpful for me if it is aligned to my goals that I mentioned above.
Please feel free to ask for any clarifications, if required.

Regards
Puru
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RESPONSES

  • Posted on 6/1/2006 at 7:43 AM Member
    Hi Puru

    In case you have missed it, check out the Special Issue of Outlook Business (June 5, 2006). The focus of this issue is on India & China. Has some interesting articles. It may be of some help to you.

    Regards

    Nahida Sunil
  • Posted by wnelson on 6/2/2006 at 11:51 AM Accepted
    Puru,

    I have had extensive experience doing B2B business in China. As Ron and Zahid said, and as you know, the relationship is pretty important. Even more so, within China, networking is a critical part of business because you need that so you can get materials in and out effectively. It’s all about who you know. A couple suggestions for you. First, in India, I’m sure there are a few Chinese nationals around doing business. And probably some within your business segment. Seek them out. Parley your relationships and your network to find them. Make a personal relationship. Show them your value and in particular, how willing you are to help them. Ask them about doing business in China and their recommendations for the kinds of people you need to be acquainted with to be effective. Then, let them know what you intend to do with respect to your trip, who you would like to meet, how you are willing to help the people you meet. They will provide introductions to friends and relatives in China. The Chinese culture is extremely entrepreneurial. However, the culture is also very mutually supportive. They want to win but they want everyone to win. By demonstrating a like attitude, you will become “one of them” and they will want to help you win. Show genuine interest in their culture and willingness to adapt. Insist on going to local Chinese restaurants to share meals with them – even when they try to take you to Indian restaurants. Study the language so you can at least great them. Learn a little about the written language to identify basics – man, woman (good for restroom visits!), numbers. These are areas that will help you more quickly develop rapport and then trust. Also, be extremely knowledgeable in your field – in a modest manner. Be willing to teach – with an emphasis on benefits.

    I hope this helps.

    Wayde
  • Posted by wnelson on 6/2/2006 at 1:11 PM Member
    Puru,
    Exploit your academic connections. The fellow student has family in China, right? And they are probably middle class - right? Ask if you can meet them and talk to them about their buying habits. Maybe go on a shopping trip. Shopping in China is a sport. Oh, and every Chinese I have ever met is more than happy to show me where to get the best buy on things - they love being shopping consultants!

    Wayde
  • Posted on 6/5/2006 at 9:48 PM Accepted
    People are, after all, still people. The Chinese marketplace is not so much different from any other large market; as you have already found out, there is a wide diversity within the larger market by region and dialect, as well as affluency.

    I recommend a slow, measured approach to their market, starting with a region which you can breach using someone who has in-rooms there...hopefully a local or at least who speaks and understands their dialect like a native. Then, branching out to nearby or associated regions. Remember that Chinese buyers are more loyal and more difficult to convince of new brands and/or features. Patience and courtesy will be rewarded greatly.

    Good Luck,
    Debi Brady
    Writing & Marketing Consultant
  • Posted on 6/6/2006 at 3:42 PM Accepted
    Hi Puru,

    A few more suggestions, based on your objectives, for your business trip to study and understand the Retail Environment of China, are listed below:

    1. Please review all articles about the success stories of Wu Mart; any retail store which has climbed to the top 10 up-and-coming International retail store list (IGD’S 2005 list) is obviously doing something right. A few links are provided for your convenience below:

    https://money.cnn.com/2006/05/30/news/companies/pluggedin_fortune/index.htm
    https://www.wumart.com/Eng/Index.asp
    https://www.wumart.com/Eng/NewShow.asp?NewsID=7410

    2. Insure you spend research time at the various Wu Marts and observe first hand what the customers find attractive about the store. I would also take the time to study the various merchandise categories and how much floor space, Wu Mart allocates to a category per store. The articles state, all Wu Marts are not the same--- so it would be interesting to compare each stores’ merchandising philosophy (based on floor allocation and pricing) per store location.

    3. Please read up on the report published recently for the Growth Enterprise Market - an alternative stock market operated by Hong Kong Exchange and Clearing Limited on how they approach growth opportunities in other markets. In summary, it states expansion opportunities could need a different business model than at home. All adventures will hold success stories, as well as lessons to learn. The challenge, of course, is learning the stories and than to apply the knowledge appropriately. The link to their study is below:
    https://www.hkgem.com/research/e_default.htm?ref=9%3A


    4. Please also research AS Watson (#1 on the list) and any other fast growing retail store or category in China. You can than start to chart similarities of successes with types of products, pricing, promotions, and/or location. Customers buy product from a store, and these choices will open our minds to the consumer behavior characteristics you desire to learn about. Here are some more links, of other fast growing retail situations in China:
    https://www.ccfa.org.cn/english/index.jsp
    https://www.ccfa.org.cn/english/news_show_2005.jsp?id=27614


    5. Last, compare the success of India’s Pantaloon stores to China’s retail success stories. Are there any similarities?

    Your trip will be very educational, and your findings will fascinate me, if you will be so kind to share. Have a safe and wonderful trip.
    Best, Sandy Riedel
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