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SCMP Reporter

CHINESE consumers are extremely conservative, prefer home-brand products, and are bewildered by and suspicious of foreign product launches.

This is a conclusion drawn from a consumer market survey completed by a consortium of research consultancies in the region.

Getting a handle on China's consumer market in retail business circles is akin to searching for El Dorado, or that bucket of gold supposedly at rainbow's end.

The amount of hyperbole on the subject is inversely proportionate to the quantity of reliable data available about it.

As part of the consortium, Asia Studies managing director Clint Laurent is attempting to shed light on consumer habits and preferences in China through a survey. Asia Studies is linked to Lewis Harris Affiliates.

Under the banner China Scan, AMR:Quantum Harris of Australia, Harris Research in Hong Kong and Infoplan in Japan got together to undertake consumer research in Beijing, Tianjin, Shanghai, Guangzhou and Chengdu.

More than 2,500 interviews were completed late last year covering social values, media usage, products and services used or needed, and demographics, including disposable incomes.

Methodology used for data analysis was social values measurement as pioneered by Florence Skelly and Daniel Yankelovich.

Mr Laurent said the method had been adapted for China and a full look at the report would cost a potential client US$25,000.

The main conclusions of the study explode a number of myths about the China consumer market, and offer dire warnings to foreign investors about to launch products into the melting pot, with a list of dos and don'ts.

'Contrary to common belief, money is actually not the sole criteria of success in China,' said Mr Laurent.

Of much greater importance was the social status of the individual, and knowing about the goodness of a person involved, Mr Laurent said.

Included in the criteria was education and the person's track record in attaining their status.

In terms of disposable income, the survey concludes the average household in the urban areas covered by the survey earns HK$6,000 a year.

The level of disposable income available may just be enough to support a moderate smoking addiction.

'The foreign company looking to foist an expensive product aimed at the mass market will need to think again,' said Mr Laurent.

The Chinese consumer is conservative and will not use foreign-brand products if there is a local alternative.

He said the consumer in China was bewildered by the level of choice now opening up to him or her.

'They have been so used to very little choice, that faced with a choice they are a bit stumped,' said Mr Laurent.

There also are tremendous geographic differences in consumer habits.

In cosmetics, Guangzhou beats Shanghai on levels of consumer sophistication and the willingness to try a foreign import; Beijing consumers appear to be the biggest ice-cream eaters; Shanghainese are the biggest savoury salted biscuit eaters.

Beijing and Tianjin are the most conservative in success-rating criteria, and are most likely to de-emphasise money.

'So the foreign product launch that uses the young yuppie, draped in gold with a mobile phone in his hand, might not be the right image,' said Mr Laurent.



Survey explodes China myths