Anyone looking for a view into how Chinese consumers differ from those in the West, should pop down to one of Ikea’s 12 stores in China on an idle Saturday afternoon. Shoppers in China’s Ikea mega stores provide a glimpse into the modern Chinese consumer: the parade of smartphone-snapping window shoppers; the young, cashed-up couples meticulously studying product details; the masses sprawled over furniture, from lovers cuddling on a couch watching iPad movies, to grandparents, parents and child sipping from flasks of tea and eating pork buns around the dinner table, to those deep in the land of nod on a queen size bed, just there for the whole experience.
Ikea’s problem hasn’t been getting consumers through its doors – 15 million went through last year, it’s getting them to open their wallets rather than napping and socialising. Like most successful Western businesses in China, Ikea has worked hard to retain its Western-ness, while localising those aspects that just don’t cut it with Chinese consumers. Ikea has become a different place to what it was when it entered China 15-years ago. To compete with the imitators, Ikea has had to lower its prices. To appeal to a middle class who often don’t own cars and shy away from DIY, it offers a good delivery service and great installation packages. Products have been localised, from furniture to the dishes in the cafeteria. To woo shoppers away from the Internet and the array of other bright lights in China’s big cities, Ikea has had to provide a whole shopping experience, partially by accident, but it appears to be working. That localisation, coupled with the necessary patience, and an increasing trend of Chinese consumers spending more on products that improve their life experiences, rather than just their outward image in public, has seen sales revenue in China grow to around a billion dollars last year, on top of growth of Ikea’s property values.
Chinese consumer differences span far beyond those buying furniture in mega stores. Wine drinkers are more adventurous and eager to learn than in the USA. Restaurant dishes are shaped by Weibo and WeChat feedback. The rules around mobile usage, online shopping and social media are notably different from in the West and even Hong Kong. And in Mainland China, those rules can be quite dissimilar based on geography and demographics. Recognising and understanding those distinctions is one of the keys to succeeding here.
There’ll be no Weekly Skinny next week due to the national holiday, with the next issue in your box on October 9. Hopefully there’s enough news and views about China in this week’s Skinny to get you through until then. Go to Page 2 to see this week’s China news and highlights.