Thursday, April 03, 2008

Watch the young consumers - Shaun Rein


The Chinese urbanites under 32 are the consumers to watch, says our speaker Shaun Rein in Business Week. Lazy branding techniques of the past whre companies successful products from elsewhere in the world dumped on the Chinese market do not work anymore, pointing at Wal-Mart as a larger company who got it wrong in China.
As selling to Chinese consumers becomes more important to multinationals' bottom lines, the key to winning in China is to understand the needs and motivations of Chinese youth. Many multinationals find their core target market in China is much younger than in other countries. Companies, therefore, need to rethink the products they introduce to China, the sales channels they use, and the marketing-communication strategies they employ. It is no longer acceptable to take what worked elsewhere and transfer it here. China is too important a market for such lazy localization.
The online market in China is much more important than in the US, Rein says, while Chinese youngster hardly watch TV, a trend we have signaled more often here.

For companies to be successful targeting young Chinese, they should focus marketing efforts where their consumers are. Males often play online games from Netease (NTES) or Shanda (SNDA), and buy DVDs and electronics on Alibaba's consumer-to-consumer site Taobao. Females navigate to blogs on Sina (SINA) or Tencent's portal QQ to track their favorite celebrities.

Digital marketing plays a critical role in China and most companies should allocate more than the 5% to 10% they do in the U.S. Right now, most foreign companies' efforts have focused on Internet advertising. In the near future, mobile-phone advertising will become critical as the number of mobile-phone users in China grows to 600 million by the end of 2008, well over 50% of the world total.

More at Business Week.


No comments: