First annual report of Roland Berger Chinese consumer market survey
With the world economy in a deep crisis and consumer confidence low everywhere, hopes rest on domestic consumption in China. Annual growth in GDP is currently forecast at about 7.6%, from a total of USD 3.35 trillion in 2009 to USD 5.28 trillion in 2015. Used to seeing the Chinese as producers rather than consumers, the West still has a relatively limited knowledge about the Chinese consumer profile. To fill this gap, Roland Berger has launched an ongoing survey and released its first annual report on the Chinese consumer.
"Everybody is watching to see how China's domestic consumption trends unfold in 2009 as exports are hit by the world economic crisis," says Charles-Edouard Bouée, Roland Berger’s Regional Coordinator Asia and President Greater China. The authors can draw on Roland Berger's over twenty-five years of experience in the country, with more than 200 assignments each year, during which over 80,000 interviews were conducted. They present their findings at a time when the development of the Chinese consumer market is of critical concern to companies all over the world.
Ignatius Tong, Partner and Vice President Greater China and an expert for Consumer Goods and Retail, points out that knowing the customer base is vital for any business striving to penetrate or survive on the Chinese market: "More than ever, fast moving consumer goods must be tailored to specific consumer needs. This requires a more insightful understanding of consumers, one that goes beyond mere demographics."
To complement its existing expertise, Roland Berger commissioned a survey of over 12,000 adult Chinese between the ages of 17 and 64 from cities of all sizes. Using Roland Berger's unique RB Profiler, a tool for strategic brand management, the team analyzed the data gathered and identified eight consumer archetypes for China: the traditionalist, the modern performer, the minimalist, the hedonist, the conformist, the progressive maximalist, the traditional maximalist and the self-centered type. These can be used to match any product with consumer preferences.
Six recommendations
Six points to be kept in mind by all companies active in China were distilled from the survey's findings:
• Don’t disregard the smaller cities
• Concentrate on under-40s
• Strengthen your brand
• Beware of the pitfalls of Chinese sales channels
• Go green
• Improve your product definition
Weak brands and unexpected results
John Shen, Partner in the Automotive Competence Center, points out how critical brand management has become: "Brand loyalty can only be nurtured and enhanced through the consistent delivery of brand values at every customer touch point. Brand strategy and brand management should be at the top of the agenda for every CEO."
The report reveals some unexpected results: People in tier-3 cities are less cost-sensitive than those in megacities. Between 85% and 88% of all respondents claimed they wouldn't buy products from a company they knew was harming the environment. Well over 60% of respondents thought they had a good knowledge of fashion. For grocery shopping, the size of city is a more critical indicator than size of income, while interest in Western products is high all over.
Survey enhanced by top-level interviews and fresh perspectives
Charles-Edouard Bouée says he was particularly pleased to get insight from two key CEOs of Western corporations. The report includes interviews with Paolo Gasparini, CEO of L'Oreal China, and Günter Butschek, President and CEO of Beijing Benz Daimler-Chrysler (BBDC). Both companies have been operating successfully in China for many years.
The report also contains a chapter by CIC, the leading Internet Word of Mouth (IWOM) research and consulting firm in China. CIC uses IWOM mining and analysis techniques to identify Chinese consumer attitudes and behavior. For the Roland Berger survey, CIC focuses on attitudes toward the different car brands available in China.
"Everybody is watching to see how China's domestic consumption trends unfold in 2009 as exports are hit by the world economic crisis," says Charles-Edouard Bouée, Roland Berger’s Regional Coordinator Asia and President Greater China. The authors can draw on Roland Berger's over twenty-five years of experience in the country, with more than 200 assignments each year, during which over 80,000 interviews were conducted. They present their findings at a time when the development of the Chinese consumer market is of critical concern to companies all over the world.
Ignatius Tong, Partner and Vice President Greater China and an expert for Consumer Goods and Retail, points out that knowing the customer base is vital for any business striving to penetrate or survive on the Chinese market: "More than ever, fast moving consumer goods must be tailored to specific consumer needs. This requires a more insightful understanding of consumers, one that goes beyond mere demographics."
To complement its existing expertise, Roland Berger commissioned a survey of over 12,000 adult Chinese between the ages of 17 and 64 from cities of all sizes. Using Roland Berger's unique RB Profiler, a tool for strategic brand management, the team analyzed the data gathered and identified eight consumer archetypes for China: the traditionalist, the modern performer, the minimalist, the hedonist, the conformist, the progressive maximalist, the traditional maximalist and the self-centered type. These can be used to match any product with consumer preferences.
Six recommendations
Six points to be kept in mind by all companies active in China were distilled from the survey's findings:
• Don’t disregard the smaller cities
• Concentrate on under-40s
• Strengthen your brand
• Beware of the pitfalls of Chinese sales channels
• Go green
• Improve your product definition
Weak brands and unexpected results
John Shen, Partner in the Automotive Competence Center, points out how critical brand management has become: "Brand loyalty can only be nurtured and enhanced through the consistent delivery of brand values at every customer touch point. Brand strategy and brand management should be at the top of the agenda for every CEO."
The report reveals some unexpected results: People in tier-3 cities are less cost-sensitive than those in megacities. Between 85% and 88% of all respondents claimed they wouldn't buy products from a company they knew was harming the environment. Well over 60% of respondents thought they had a good knowledge of fashion. For grocery shopping, the size of city is a more critical indicator than size of income, while interest in Western products is high all over.
Survey enhanced by top-level interviews and fresh perspectives
Charles-Edouard Bouée says he was particularly pleased to get insight from two key CEOs of Western corporations. The report includes interviews with Paolo Gasparini, CEO of L'Oreal China, and Günter Butschek, President and CEO of Beijing Benz Daimler-Chrysler (BBDC). Both companies have been operating successfully in China for many years.
The report also contains a chapter by CIC, the leading Internet Word of Mouth (IWOM) research and consulting firm in China. CIC uses IWOM mining and analysis techniques to identify Chinese consumer attitudes and behavior. For the Roland Berger survey, CIC focuses on attitudes toward the different car brands available in China.
