Thread: Inside the Mind of Chinese Consumers

Inside the Mind of Chinese Consumers

May 31, 2012
by Matthew E. May

As China races toward becoming the world’s largest economy, it represents an enormous commercial opportunity most business and brand owners do not fully understand.

In his new book, What Chinese Want: Culture, Communism and China's Modern Consumer, Tom Doctoroff explains why China continues to resist Western ideals even as it modernizes, and sets the record straight about its culture and worldview.

Unraveling Myths

Doctoroff, a China-based advertising executive at J. Walter Thompson, shatters nearly a dozen western misconceptions about China. Contrary to popular American belief, the Communist party is not about to be toppled by a popular uprising; the Chinese are not morphing into U.S.-style individualists; the Chinese do not care only about money.

Doctoroff shows, for example, how the penetration of diamond engagement rings has risen to 80 percent ever since DeBeers entered the market and repositioned their "Diamonds are Forever" slogan to mean reliable commitment instead of romantic love. He reveals how they resist spending a premium on appliances, bed linens and other items seen only in the home. He explores why the surging middle class still prefer BMWs to Porsches, cash dealings to electronic transfers, and strong top-down management to creative collaboration.

In our interview with Doctoroff, he speaks more in depth about the mind of the Chinese consumer.

OF: Why should every Western individual and business owner understand the Chinese worldview?

TD: The rise of the East, and China in particular, heralds a multicultural global society that will affect many things, from how business deals are signed and which product categories boom, to how macro-economic policies are coordinated. Westerners, and Americans in particular, are raised with an unshakeable belief in the moral truth of a value system that encompasses representative democracy and universal human rights. That blinds us to the uncomfortable fact that the Chinese do not necessarily share these views. To establish effective partnerships, we need to convey sensitivity to motivations that are profoundly different from our own.

OF: What are the biggest misconceptions Westerners have about the Chinese?

TD: Most of us believe that as China becomes modern and global, they also become like us. Superficially, they do. Shanghai’s nightlife thumps to the beat of hip-hop. And American television shows are all the rage. But the relationship between individuals and society, rooted in twin pillars of obligation to family and the nation, remain unaffected. In China, the basic productive unit of society remains the clan, not the individual. Western individualism is an increasingly alluring idea, like Eve’s apple. It’s succulent and juicy, but if you bite into it, you get banished to the Land of Outcasts. The red line of overt rebellion must never be crossed.

OF: As China modernizes, won't it become more Western?

TD: The relationship between individual and society is profoundly different in China versus the West. In China, the individual has never existed independent of his obligations and responsibilities to others. External endorsement has always been the fundamental motivation of behavior. In modern China, egos are huge, but individual identities—who I am, what I really want—are weak. The individual is not the basic productive unit of society. This is the basic difference between China and the West: We are encouraged to “know ourselves,” the Chinese are not. Psychologists are taboo.

OF: In what ways does the Chinese worldview influence consumer choices?

TD: In China, there is a golden rule of marketing: In order to charge a price premium, public consumption must be dramatized. That’s why certain categories—for example, cars and luxury goods—are growing so quickly, despite extremely high out-of-pocket costs. It also explains why certain companies have succeeded by changing their business models to conform to this rule before starting up in China. Starbucks are not oases of urban retreat; they are gathering sites for a new generation of professionals. Haagen-Dazs wins with fancy ice cream parlors, not in-home consumption. No one pays $5 to enjoy a half pint of ice cream while watching illegal DVDs in the living room.

OF: What should Westerners do differently when we engage with China as citizens, businesspeople or marketers?

TD: In a dangerous world, trust must be earned. Westerners generally assume things are “safe.” In China, we have to bend over backwards to define win-win objectives. Fortunately, the Chinese are also pragmatic. Once trust is established, barriers fall and both sides can get down to business.

What does the rise of the Chinese economy mean for your business?

I'm currently working hard on business development in China...have made two Shanghai trips this year.

Here's an interesting article:
China's Next Export: Venture Capital - Businessweek

Originally Posted by Chaseme

Inside the Mind of Chinese Consumers

Originally Posted by JimF355

Here's an interesting article: China's Next Export: Venture Capital - Businessweek

Good reading, thanks Chaseme/JimF355