The different consumer demographics - Shaun Rein

Shaun Rein

Consumer demographics, and especially the position of the middle class, boils out in China very different, cause problems for brands focusing on that middle class, tells business analyst Shaun Rein in OpenMarkts, in an interview ticking off different parts of his book "The End of Cheap China."

OpenMarkets:

You explain in your book how the rise of cheap China is creating an optimistic consumer class. Yet China still appears a minefield for foreign brands. Some are huge success stories, while others flounder. 

To be successful you have to adapt your brand and product for Chinese tastes. Brands like Gap have not really done very well. One reason for this is the middle class does not really exist [as a consumer demographic] in China.  A brand has to be either really cheap or one with high status. Pricing and advertising has to connect with the Chinese standpoint. 

Foreign food brands have done particularly well in China, where an important selling point is being trusted. Our research found food and product safety are by far Chinese consumers’ biggest concerns.  The huge success of Kentucky Fried Chicken in China is because it has the right product and brand, and is also very trusted.  However, this has also meant recent troubles that KFC has had with suspect chicken supplies have been very serious. People had such high trust in Yums (KFC’s owner) it had much further to fall, such was the level of outrage.   Still, if a brand gets it right, China will likely become their largest market.

More in OpenMarkets. Shaun Rein 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.

 On Thursday 24 January the China Weekly Hangout will focus on how the pollution affects the lives of people in China. Do you want to participate of follow the event? Do sign up at our event page or check in for the details.

Earlier in 2012 Shaun Rein's colleague Ben Cavender gave an overview of mistakes foreign companies made in localizing for the China market. Including Gap, IKEA, B&Q and Dunkin Donuts.

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