The China Perspective: Where does Acxicom’s major business scope lie in China?

Steven McCormack: We provide customer management solutions to help companies to be better prepared for their entrance into the China market with better market positioning. Customer information, as a matter of fact, is key resources for marketing and corporate operations. On one hand, as a data provider, we provide directory to help companies target their consumers. On the other hand, we enable additional information to be included in companies’ existing consumer profiles and demographics. In this way, an access to the targeted market and customer relationship management are activated with improved information quality and accuracy.

TCP: What are the different consumer patterns existed in various regions in China, namely the north, east, south and west?

SM: Varied levels of disposable income, affluence and savings contribute to different direct responses to marketing communications.

In the western region, particularly Wuhan and Chengdu, although people generally have a lower monthly income, there is a higher rate of spending. Since people are more interested in pursuing a certain lifestyle, they are more willing to purchase items that are comparatively unaffordable.

This comes into a contrast with economic hubs of Beijing and Shanghai where a higher saving rate is common. In the past ten years, while new and trendy consumer goods such as the fashion, auto and property sectors saw their first China launch in Shanghai, younger females are more of a domineering force in the marketplace. At present, Shanghai is still the destination most responsive to common marketing program.

Beijing has seen quite some transformation in its consumer patterns over the past ten years. Since there was not a sufficient supply of housing, until recently, autos, instead of property, was the first major purchase for most consumers in order to obtain a certain lifestyle. This is opposite in Shanghai, with consumers considering property as their first major purchase.

In the south of China, consumers are more pragmatic and difficult to be swayed by marketers. They are more conscious to prices and functionality. Climatic factors do not have much influence on consumer behavior.

In the Northeast, as a consequence of the region’s volatile environment and heavy industrial history, consumers tend to invest in products that can help them move forward, such as educational services particularly for children. Their behavior proves to be extremely seasonal. From skincare to home appliances, the product cycle lives on summer and winter rotation.

TCP: How do you see China as a luxury consumer market?

SM: China’s large population and rapid economic growth has created a substantial wealthy class which has gained wealth quickly and anxious to differentiate themselves from others. Travel and luxury goods are among the most recognizable items to achieve this purpose. Although Beijing and Shanghai remain the primary focus for luxury brands, consumers in more secondary locations are just as keen to purchase imported and luxury items. More transportable luxury goods can be found in remote areas such as Inner Mongolia and second-tier cities. What contributes to this phenomenon is that luxury brands stand out even more in these locations. However, since these luxury items are not available to consumers in more remote areas, they turn to distance marketing dialogues for purchases. Such sales channels actually receive a higher response rate from second-tier cities. Therefore, imported products should make themselves more available on a local level with more effective distribution.

TCP: What is the typical Chinese consumer’s attitude towards local and foreign brands?

SM: Chinese consumer has a rather contradictory psychological reaction in this regard. On one hand, they are concerned about quality standards of local brands, particularly more personalized products. ‘Made-in-China” equals low quality is still a fundamental perception. On the other hand, there is also a rising sense of patriotism towards Chinese brands.

TCP: Since China is a country where thousand of dialects can be found, would it make a difference if marketing campaign or liaison with local media is done in the specific local dialect?

SM: More localization can be spotted recently mostly on broadcasting advertising and copywriting on advertisement. An efficient use of the local dialect with local words can indeed energize marketing campaigns. This is in particular applicable to the use of rhyming approach since catch phrases only work in local dialect. Increased localization is a product of considerable local differences that exist across China, increased competition and more sophisticated marketers. Currently, marketers also focus on sub segments with above-the-average campaign with local touch more appealing to a specific regional audience.

TCP: Where are Chinese consumers tastes headed?

SM: In the past, the market put more focus on individual buyers. One of the emerging trends is more emphasis is placed on attracting household buyers and extended families as both generations of Chinese households would earn above-average incomes. Marketers will also target the one-child generation, which is attracted to a more modern lifestyle with higher degree of independence. Generally speaking, Chinese consumers would look to modernization; even minority groups would select modernized lifestyle. Other developed Asian economies, such as Singapore, Japan, South Korea and Hong Kong would be more of an indicator of where China is heading to because they share similarities in cultures and levels of populated density in urban centers.