China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them by Michael Zakkour and Savio Chan – an excerpt

An excerpt from China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them by Michael Zakkour and Savio Chan, published September 30, 2014 by Wiley

Michael A. Zakkour is a leading authority on Chinese consumption, consumers, branding, retail, and e-commerce as well as operations and supply chains in China. He is a principal at the global business consulting firm Tompkins International where he heads the “China/Asia Pacific Practice.  He is also a contributing writer at FORBES, CNBC and Entrepreneur magazine.

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Contact Michael on twitter: @michaelzakkour

 

Orientation

 A nation’s culture resides in the hearts and in the soul of its people.

—Gandhi

 When we advise companies on entering, growing, or changing course in China, we always start with a deep background on culture and history.

“Why?” some of our clients ask. “We didn’t come to you for a historylesson or a course in Chinese sociology and ethnology. We came to you for strategy to operate and sell in China” or “I can take language lessonson Rosetta Stone; I don’t think any of this language or history stuff is relevant.”

It is. Knowing their history and culture is a prerequisite for understanding and succeeding with Chinese consumers.

You don’t personally have to master the Chinese language, culture, history, and mind-set to be successful in China. But you have to listen to the people who have done so. Otherwise, one can too easily see the suits and the coffee, the wine, and the BMWs, and conclude that Chinais a westernized society. It’s too simplistic to conclude that appealing to Chinese consumers should be no different from than appealing to consumers in a western culture, say, Brazil—or an Asian market that also developed since the 1970s, say Korea or Japan, and it is also too simplistic to assume they don’t respond to many of the things we do, rather you want to find that right mix between change everything and change nothing for China.

Chinese culture, commercial infrastructures, and society have a deeply established logic all their own, built over long periods of time.  Creating trust, fostering peer recommendations, and building personal relationships with Chinese customers is a must—and they all depend on your understanding of the culture…When a Canadian company does business in England, an American company markets in France, or a Brazilian company in Spain, there is shared sense of history, culture, language, and attitudes about life’s meaning. Yes, there are some major and many minor differences between the cultures and tastes of consumers, but they all operate from a fairly consistent cultural blueprint.

Consider that western nations share some major cultural and historical factors:

  • A knowledge of and values based in Judeo-Christian religion, philosophy and guiding principles
  • A Newtonian understanding of science
  • Founding principles of modern society in the Enlightenment
  • A Smithian understanding of free markets
  • A long history of democracy, free markets, and consumerism
  • A linear understanding of time and history
  • Business conducted in a transactional manner
  • A European foundation of society and culture that was spread to North and South America, Oceania, and other regions
  • A common alphabet
  • Similar foods and drink, and a culture that celebrates with alcohol
  • A philosophical orientation towards individual freedom and identity

China on the other hand has:

  • A Confucian/Buddhist/Taoist religio-philosophical tradition, and a government that openly declares itself atheist
  • A circular and cyclical understanding and sense of time, history, and relationships
  • An almost purely Chinese foundation of societal and cultural norms, so powerful that they have shaped the societies and norms of Japan, the Koreas, and Southeast Asia over the course of 3,000 years. There was an abundance of culture exported out of China, but very little culture imported in.
  • The written language uses 30,000 characters—not letters—providing for much more nuance than western languages and alphabets
  • Colors and number have an outsize significance in China that is almost nonexistent in the West
  • A long history of commerce, driven by government and conducted by clans
  • An intense and passionate food culture (while Chinese people drinkalcohol, the culture is far more centered on food than drinking)
  • Status, identity, and sense of security are grounded in the group

China’s Super Consumers

It is important to learn what shapes Chinese society, culture, and thinking before you can sell a product or service to its consumers. Those hoping to connect with China’s super consumers must absorb and internalize the fact that success or failure will largely hinge on anunderstanding of the Chinese nation’s self-image, its diverse regions, and its individuals. China’s deep roots in history, language, philosophy, and culture trump the convergence theory, which states that once people achieve a certain threshold of disposable income, they will spend in similar patterns to people at similar disposable income levels in other cultures.

The mindset of the Chinese businessperson and consumer creates the consumer’s self-image; his idea of his place in society and the universe; and his ambitions, needs, desires, likes and dislikes. The mindset translates to purchase motivators. Purchase motivators will and must determine your product design, shape, size, color, price, selling channel, branding, marketing, and benefits.

Often when a company or product fails in China, it is because these cultural building blocks—history language, philosophy, and culture—were not a central focus from day one.

 

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