Sunday, January 08, 2012

Chinese consumers are buying status - Paul French

Paul French
For many the purchasing habits of Chinese consumers are hard to gauge. Retail expert Paul French tells in The Telegraph why Chinese buy what and were. "Chinese consumers are still buying status." But what gives status, might vary from other consumers.

The Telegraph:
“For Chinese consumers, Confucian group-think is important and at the moment they are still buying status to show that they have achieved things,” says Paul French, founder of the market research company Access Asia. “So people don’t worry that they have had to spend the past six months eating nothing but pot noodles in order to afford the newest Louis Vuitton handbag.” A designer bag retails for between £800 and £3,000 in Britain but can be around 30 per cent more in mainland China because of high import tariffs. 
The lure of luxury brands is so strong that even provincial cities like Shijiazhuang, the unglamorous capital of Hebei province, in eastern China, boasts a swanky Gucci store. But, actually, it’s the appearance of mid-market brands such as Zara and H&M in second-tier cities such as Dalian, Nanjing and Chengdu that’s the surest sign of the growth of China’s middle class. 
H&M, which now has 77 stores nationwide, and Zara, which has 250, do a roaring trade in the sort of safe basics, like black suits and white tops, young Chinese women love to wear. Unlike their nouveau riche counterparts in Russia, the Chinese don’t go in for zany individualism. “Not all brands are equal,” says French. “The Chinese don’t go for Versace. They don’t want the lemon shirt and the orange pants. No one wants to look like Elton John.” 
Wanting to play it safe and also to make purchases which show clearly where you stand in China’s social hierarchy has its roots in the Chinese concept of “face”. This idea loosely correlates to how your appearance and conduct lead others to assess your status in society. So, coming to the office looking like Lady Gaga, when everyone else is dressed in black and white, would result in an enormous loss of face, with heavy social consequences. 
“With your purchases you want to tell people that you’ve urbanised, [that] you have a flat, a car, a husband or wife. And you can’t afford to blow [this image] by wearing the wrong tie. It’s not like you’d get a bit of gentle ribbing from your colleagues. It’s social suicide,” says French.  
But how do Western brands become products that give Chinese consumers the “face” they aspire to? It’s not as simple as sticking on a hefty price tag. Though this sometimes works. The American beer Pabst Blue Ribbon, which has a distinctly blue collar reputation at home, was successfully launched in China as a luxury product, costing 20 times the US price. 
Generally, though, the Chinese have deep-rooted cultural likes and dislikes. Companies have to adapt to local tastes and some have been defter and more nimble than others. High-end lingerie labels, for example, such as La Perla and Agent Provocateur, have failed to crack China. “Chinese women,” French explains, “don’t want to spend a fortune on something that only a man they’ve already snared is going to see.” With 124 men to every 100 women, women don’t feel they have to put on a vamp act to find a partner.
More in The Telegraph.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  
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