China = 1.3 billion people.
That’s an equation that intoxicates marketers and drives businesses to invest serious cash in capturing the Chinese consumer.
But experts in brand marketing in China warn businesses not to get dazzled by the numbers. China's consumer market is large, but it is also complex, fragmented and fiercely competitive. If you want a piece of the action, you better do your homework and be prepared to stay for the long term.
Here are a few tips from our experts.
Target your customers
Only 33.5% of retail sales now come from China's top 24 cities, according to a study from Ogilvy & Mather Group China. China's smaller cities and towns are a growing market for foreign brands.
However, consumers in these areas have considerably different shopping habits than those in big cities. They are less hurried, spend more time in public spaces and have limited access to the Internet. Differences like these can be crucial for market strategy.
Regional, cultural and ethnic differences have to be considered as well. Chris Reitermann, President of Ogilvy Shanghai, says focusing on a smaller market segment can pay off more than a broad, unrefined strategy.
Have a local partner
There are a lot of benefits to choosing the right Chinese partner and building a strong relationship with them. GM, a long-term success story in the Chinese market, has made out of its joint ventures with Shanghai Automotive Industry Corp. "They know the market," says GM marketer Joseph Liu. "They help us on the distribution side. They bring the government relationship which is extremely important in China."
Take your time
Both our experts advise that building a brand in China is an energy and time-consuming business. Liu recommends putting someone in China full time to build relationships. Reitermann says studying the Chinese way of life can help you build a marketing campaign that is sensitive to local culture and appeals to local tastes.
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