Mark Tanner
Mark Tanner
22 October 2013 0 Comments

Mention Shanghai to a Beijinger, and there’s a good chance they’ll scoff. Talk about Beijing to Shanghainese, and there may also be some jeering.  Northern Chinese like noodles, southerners have a preference for rice.  Travelling between regions in China, differences are evident in people’s appearance, diet and aspects of their culture, as well as climate variations. Whilst most of us are aware of this, curiously a lot of our marketing efforts still treat China as one big homogenous land, or at best, separates sophisticated high tier city consumers from the smaller ones.

The Regional Differences video below, explains how we need to think about China in terms of a matrix, considering city-tier sophistication, alongside regional differences in culture, climate and diet.  There’s the often-cited example of skin care needs across China, with consumers in the humid south having different requirements than those in the dry north.  There are cities where smog-protection is most important for skin cream, and others where it is sun-protection.  

Localising your product or service’s features is just the beginning, the other elements of your marketing mix and customer experience should also take the regional differences into account.  It’s seldom practical to have a something unique for each of the hundreds of Chinese cities with millions of people, but there’s often room for improvement. Advertising in general, even at a superficial level will be more effective if it’s regionalised.  A backdrop of the Great Wall or the CCTV building and a pirate-sounding voiceover will be better received in the North, than say, The Pearl Tower.   With many of us increasingly using the web, social media and mobiles in our marketing, we can be quite specific in targeting different areas of China.  

Maturing Chinese consumers are becoming more confident, and as a consequence, are increasingly developing their own identity and unique parochial traits.  So it’s best to take that into account with your marketing.  Hopefully regionalisation, coupled with what you’ll read below, will all help with your China plans.  Enjoy!

Consumers, Chinese Consumers

Regional Differences: 17:52 video about not just grouping Chinese consumers by city tier, but working with a matrix that considers city-tier with region, to account for distinctive differences in culture, diet and weather. Regionalised examples include McDonalds, slower to localise its menu in China, but now with regional menus catering for noticeably different palates across China. Unlike those interviewed, China Skinny is a believer in regionalising advertising where appropriate, as Chinese can be very parochial. It doesn’t always have to be expensive.

American Execs Say China is Getting Expensive, and Profitable: 90% of American businesses surveyed now have profitable operations in China, but their optimism is tempered by soaring costs and finding the right talent.

Number of Chinese Billionaires Skyrockets: China ‘officially’ now has 6% of the world’s ultra rich (although the actual number is likely to be much higher) – those with a net worth of over $50 million – higher than every country except the USA. USA accounts for almost half of the total.

CCTV Interviewed Chinese on Streets: “What is Patriotism?”Although Chinese receive systematic patriotism education from day one, there are some interesting responses when they’re asked what patriotism is [not viewable inside the Great Firewall].

Haier, Sina Weibo, ZTE in New Foreign Tie-Ups: Three quite different tie-ups between Chinese and American organisations is likely to be an increasing trend which sees Chinese brands make more of a mark abroad.

Consumers, Internet, eCommerce, Mobile & Social Media

Mobile Use Differs Markedly Between Cities: 54% of 18 to 32 year olds in China’s Tier 1 & 2 cities use social media apps on their smartphones, versus 41% in Tier 3 & 4. In China’s big cities, consumption, sports, tourism and navigation apps are hugely popular, whereas entertainment is a focus in smaller cities.  It would be interesting to see how it differs regionally.

China’s Online Retail Turnover Rocketed 70% YOY To 880 Billion Yuan In 2013 H1: A cool 271 million Chinese shopped online in the first half of 2013, 29 million more than the six months before. That number doesn’t even count consumers who have someone else do the shopping for them.

Trending in China: Cross-border E-commerce: Still a minnow compared to the local sales, but cross-border online shopping from China is picked to grow from $35 million this year to $160 million by 2018. Chinese consumers are the most worried about product safety and authenticity when buying online.

Macy’s Shelves Internet Expansion Plans In China, But It Isn’t Worried About Slowing Chinese Economy: Macys is holding off on big China plans as it needs to learn more about Chinese shoppers.  It hopes to get some insights from it’s minority shareholding in local online retailer VIPStore.

Chinese Food and Beverage

China’s Coffee Industry is Brewing: Chinese consumers drink an average of four cups of coffee a year, with instant coffee accounting for 80% of that. Nevertheless, the number of cafes has doubled in the last 5 years with more than 30,000 in 2012. Coffee drinking is growing 10-15% a year.

Trends and Developments in the Confectionery Sector in China: Quality and taste have become the primary motivations for Chinese consumers buying chocolate. Dark chocolate’s low sugar and fat content and rich taste has helped drive chocolate sales in China. Women eat the most.

Sausage Ceasefire May Not End War Between China’s Noodle Kings: China’s $8.8 billion a year instant noodle industry has seen competition heat up so much, margins have taken a big hit. Firms have been giving away sausage, drinks, extra seasoning and gifts to get a larger share of the 44 billion packets of noodles consumed in China each year. Another reason to position yourself as a premium brand in China if you can.

Chinese Losing Taste for Fried Chicken: Once the darling of Western businesses in China, KFC sales in China have plunged 11% in the past three months, following a disastrous quarter before that. Chinese consumers are opting for cheaper, healthier and more Chinese. Curiously, there’s nothing in the article about the string of scandals and negative press from Government media that hit KFC around poor products and the birdflu outbreak, something KFC has never been able to claw back from. Apple, Fonterra, Nike and Japanese car brands will be watching with interest.

Tourism and Travel

China Gambles on Theme Park, Whale Sharks to Lure Punters from Macau Casinos: Construction of a $5 billion resort and theme park development is well underway, 10 minutes drive from Macau, said to be China’s answer to Orlando.  The park hosts a mega rollercoaster and whale shark tank, hoping to capitalise on the 30 million tourists who went to Macau last year.

The Online Travel Industry in China is Booming, as China’s Largest US IPO in 2 Years Shows: 20% of Ctrip’s hotel bookings and 15% of flights were booked through its mobile app in Q2 2013.

Air China’s Expired Food Causes Dozens Vomit, DiarrheaChina’s only national flag carrier, Air China, served up expired food causing at least 30 passengers to get really crook.

Learning and Education

In China, Parents Bribe to get Students into Top Schools, Despite Campaign Against Corruption: Want to get your precious only child into a good Chinese school? Maybe gifting the school an elevator or telescope would help. Almost everything, from admission to grades to teacher recommendations, is negotiable if you have the right contacts and the cash, parents and teachers say.

Recreation and Sport

In China, Golf Has a New Hazard: Killer Smog: Players’ health has been sacrificed for the financial benefits of establishing golf tournaments in China’s lucrative market [not viewable inside the Great Firewall] .

Fine Art

Chinese Buying Frenzy Helps Sotheby’s to $540 Mln Record: More collectors from China and elsewhere in Asia helped Sotheby’s HK break records with US$540 million, including a $3 million Zeng Fanzhi painting, a $3.9 million bronze Buddha and a $2.4 million Chenghua-era “Palace” Bowl. China’s new wealthy “don’t just want to collect and enjoy, they want to be No. 1,” says HK-based dealer, William Chak.

Is Chinese Contemporary Ink Painting the Next Big Thing?: Traditional ink paintings are picked to be the next big thing in Chinese are as art dealers and auction houses look to expand and diversify the art market in the Mainland.

Auto and Cars

Chinese Auto Marketing Shifts from TVCs: More than 100 auto companies organised micro-movies in the last quarter of 2012, and had product placements in close to 500 micro-movies. 60% of Chinese surveyed believe it helps brand image, with 33% believing it made people more likely to purchase a car.

Premium and Luxury

Luxury Companies Are Making Budding Aficionados of Chinese Consumers: Including luxury experiences as part of the luxury goods offering ensures a much stronger proposition. Good examples are Johnny Walker “experiential brand centres” and Porsche multi-city road show, with support online activity.

That’s The Skinny for the week!  China Skinny would love to discuss how we could help with your marketing, online initiatives or research to take advantage of China’s opportunities.  Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weekly’s right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.