Marketing Week 2009
Issue No. 48 - August/September 2009
On the ground in China
Viveca Chan, founder of Hong Kong-based WE Marketing Group - WE stands for west-east - has been watching business development drama unfold in China as western companies come to grips with realities on the ground in a vastly different culture. Viveca discusses how Western methods work in this context.
“Western-style marketing works in China when companies have scale, or when they are targeting more advanced cities like Shanghai and Beijing,” she says.
“What western style marketing brings is discipline and structure often lacking in Chinese companies.”
She highlights Procter & Gamble; the US giant entered China early, brought in marketing discipline and became the leader in haircare.
“The problem with Western-style marketers is they tend to be risk-averse and dependent on research rather than gut feel,” she notes.
“This may not work in new markets and companies can be too slow to respond. Philips has made wrong predicitons about the DVD markets in the past with their market research.
“Western style marketing may not work for small companies trying to enter a fragmented market and in tertiary or rural markets. Where there are no rules or clear regulations. Here, marketing tactics and the ability to understand local market conditions and taking risks may be more important.
“The best marketing opportunities lie with the products and services targeted at the upper middle class. It is estimated the upper middle class will grow to account for 56% of the population by 2015. 16 million people were classified as “rich” in 2008 (over Rmb 250,000pa). This accounts for only 1% of population. However, half of these were not rich five years ago. By 2015, it is estimated the rich will number 44 million.
“Opportunities also lie in secondary and teritiary cities where there is rapid growth of income and spending power in the next 10 years. In terms of business sectors, the service industy, education and green s...
