I love being wrong, but that doesn’t refrain me from saying some things I think. In September and October I’ve been to a few places in China, including Hong Kong, Beijing and Shanghai. Probably every single country in the world knows them as cheap manufacturers. You give a name, they can produce it, and they can produce it much cheaper than the cheapest available. Many foreign companies are based in China trying to guarantee their interests towards western markets looking for cost optimization and how to distribute products to their original and native markets. However, have you ever thought how it would be to be a marketer in China to Chinese customers?
Forget about Hong Kong and Shanghai for a second. It’s different there. Think of a more China-style place like Guangzhou and Beijing. My impression was that there’s only one winner tactic for making people buy things: sell it almost for free. Many times a day the media reports massive demonstrations of lust in China, like millionaires buying super expensive real estate, people going to mega concerts from international moguls like the Rolling Stones and Christina Aguilera or even images of beautiful and hi-tech skyscrapers being inaugurated almost on a daily basis. You know what? This is a legend. Though China is becoming increasingly wealthier, their population is predominantly poor. Sometimes they have shortages of food and a large portion of the population still is deprived from basic services like sewage. Also include there the official censorship. Many times I tried to access Wikipedia, but it simply didn’t work. Coincidence? Think again.
China also has its elite. It’s just a simple math equation. If in the US 1% of the elite represent 3 million people, in China the same proportion will give you almost 15 million really rich people. Just don’t forget the income distribution in China is definitely uneven, much more uneven than in the US. The wealth demonstration of Chinese individuals that we see in the media is represented by the 15 million. The total population has already surpassed the 1.4 billion mark.
The Chinese market is still very green in marketing terms. They will pay what they can pay, it’s not a matter of options. Credit cards are just badly accepted there. Cash is still the strongest paying alternative. After literally going to China, my perception changed radically. A foreigner in China has a cost of living usually much lower than in his own country. I’ve heard of people there who didn’t want to come back home because they lived like kings in China. The Chinese population is quite different though, even in major cities like Beijing and Shanghai.
Shanghai is really an Orient Pearl, I’d love to live there one day as a marketer. But if there’s something I’d never think of is to be a marketer to Chinese customers. The challenge is enormous and that’s good. However, I can still see a lot of attractions on being a marketer for and in developed countries. One of them is the complexity of the market and the amount of variations one can actually deal with when thinking of how to sell a product to someone. The other is the amazing purchase power of a relatively great percentage of the population. That means a single customer can buy more, but at the same time he will concentrate a larger power of decision making it more difficult for a marketer to sell to him. I don’t see that happening in China. The ingenuity of the market only allows customers, the frequent ones, not the elite, to buy what they need. Needless to say it’s not what they want all the time. With more power comes more responsibility. Churchill was right.
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