How to Win Over the Chinese Consumer

So deeply rooted, says Tom Doctoroff, is the Western belief in individual freedom, that it is nearly impossible for us to accept the fact that in Chinese culture, the individual does not exist outside of her network of familial and communal obligations.
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TRANSCRIPT

Tom Doctoroff:  Westerners have a hard time understanding that the basic structure of Chinese society is fundamentally different from the West.  And by that I mean individuals do not exist in China outside of their obligations and responsibilities to other people, so individualism in a Western sense.  And by that I mean society encouraging in you to define yourself independent of society doesn’t exist.  On the other hand, China is a Confucian society so it’s also very ambitious so egos are huge.  So on the surface, Chinese want to be—Western individualism is very aspirational but it’s ultimately forbidden fruit.  I always call it Eve’s Apple.  

So as China becomes modern, the way they express their place in society seems Western, but in actuality it’s conforming to Chinese imperatives of generating acknowledgment for your contribution to society. Most Westerners who have any idea at all of Confucian society - they tend to think of it as very hierarchical, regimented, rule-bound, restrictive.  That’s true to a certain extent.  But Confucian society was also the world’s first socially mobile society by mastering the system, by being able to navigate the rules and become a connoisseur of the rules, you could climb yourself up a socially-mandated hierarchy of success.  So there’s a tension in Confucian society that’s really quite dramatic and that’s between on one hand regimentation, but on the other hand ambition.

This tension between regimentation and ambition leads to what I would consider the golden rule of marketing and brand consumption in China, which is that people want to stand out by fitting in.  And that means that people want to project their status but at the same time do so in a way that protects themselves from any aberrant moves or any overt rebellion.  So Chinese people are willing to spend a lot of money on goods that can be seen by the public, whether it be a mobile phone or a car or even shiny hair.  But when it comes to anything that is privately consumed it’s going to be very price-sensitive.  

So this public consumption imperative leads to a lot of different business models.  I mean you take a look at the way Starbucks has succeeded in China with over 1500 stores.  That’s because they have reconfigured those sites to be public destination sites where bands of new generation professionals go in there together to proclaim their affiliation with a new generation elite.  So this projection of status drives a lot of multi-national brands business strategy.  On the other hand, however, when you project status you can’t do it so obviously, so Chinese are looking to project their status in an understated way.  That’s why Chinese women, for example, love diamonds, because they sparkle, they don’t glare, so the sparkle captures attention but it does so with a whisper.  

Or the Mont Blanc pen for the man.  Why do people like the Mont Blanc pen?  They like it because of that six-pointed star that’s very obviously but still somehow discreetly placed at the top of the cap.  So the simple act of putting a pen in your pocket says something about the man, that he’s in charge and he’s a master of something.  And this projection of status but in an understated way, this public consumption over private consumption as it relates to price premiums and what people are willing to pay for them as an investment in their status, drives a lot of the consumption habits that you see in China. 

Directed / Produced by

Elizabeth Rodd and Jonathan Fowler


 


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