In my work helping companies leverage trends and consumer insights, I have focused on telling stories, making connections, and setting my eyes toward the future. Working with a team of researchers primarily from mainland China, I have been privileged to see inside the most exciting and historic consumer miracle of our time. More broadly, I have had a rare vantage point from which to observe the beginnings of a new global hierarchy of influence. As Chinese have jumped from a follower position to become consumer leaders, they have dramatically changed the game. Their concepts and values are influencing how business is done in China now and will impact future consumer and brand experiences outside the country’s borders.
To be honest, I wrote this book because there was a need. Even for those whose job it is to understand consumer changes in China, it is hard to keep track of the big picture. It is easy to be overwhelmed. China’s size and pace are unparalleled; it will boast a population of almost 500 million people under age 30 by 2015, it claims about 46 cities with more than two million inhabitants, and Internet users went from 33.7 million to 513 million in a decade (the end of 2001 to the beginning of 2012). Numbers like these make jaws drop, eyes glaze over, and cause marketers to salivate in anticipation. “If we could only get 1%...” they plot.
But the math is deceiving. A combination of increasingly sophisticated consumers and intensifying competition (both domestic and foreign) requires a serious, targeted approach. To have a chance at connecting, companies must understand who their consumers are, what is important to them, and how their brands can help audiences achieve both tangible – and intangible –goals.
Figure 1: Chinese luxury brand Shang Xia is pushing to compete with European luxury icons
LOST (AND FOUND) IN TRANSLATION
I have often heard executives jump to the conclusion that young people in China look (and therefore must act) like cousins or nephews abroad. This is a neat way to categorize similarities and erase differences, making way to rationalize a copy and paste approach to youth.
In reality, this is just a superficial observation that there is a trans-border vocabulary of cool. Trend-conscious youth in every corner of the world, including China, recognize and buy into international symbols. But few brands enjoy the universally understood status of Apple or Nike. Different cultures have their own unique attitudes and behaviors that influence how youth understand and use brands to their benefit. For brands to truly connect, they have to understand and adapt to cultural contexts.
Failing to acknowledge culture gaps partly explains why some brand messages are not easily translated and integrated in China. The gap is obvious when, for example, you see salespeople not conforming to the company’s globally prescribed look of the season. Further evidence can be seen when older consumers abscond with brands meant for trendsetting youth or when adults embrace brands and characters originally intended for primary school kids.
These are all less than subtle cues to take a step back and re-evaluate. If a brand wants to differentiate (which it absolutely must), it may need to recalibrate. To stand for something specific, brands may need to reconstruct their stories and take a hard look at their true meaning and value to consumers.
ACCESS AND EXPECTATION
To find a translation of their value that resonates with young Chinese, companies need to recognize what makes this audience special. Youth in China are unique in their unprecedented opportunity and expectation. Born into an open economy under the one child policy, young Chinese have been swaddled with more income and access than peers both vertically and horizontally, in China and abroad. They are positioned at a historic crux, tasked with reporting new experiences back to their communities and helping to pioneer definitions of modern Chineseness.
This responsibility has often been a double-edged sword. The price for getting to the top in a highly competitive, consumption-focused environment inevitably forces many to the bottom. Young Chinese suffer more from the pangs of competition than even their closest Asian peers and a failure to meet family expectations can be devastating. Without siblings to share the responsibility, young Chinese are tightly directed even once they reach adulthood, heavy handedly guided on what schools, careers, and mates are right for them.
Figure 2: Cloistered youth seek instances of camaraderie and connection
In China, consumerism is not the dirty word it is in the West; it is a powerful symbol of modernity. As such, the one area where youth are encouraged to flex their personality and analytical skills is in their role as consumers. Supported by six family members and their own incomes, young people have been allocated the necessary funding to pioneer consumption. Scouting out new brands and passing on reviews, youth gain capital for their expertise and contribution to an important expedition. Unlike in politics, at school or at home, youth’s opinions as consumers hold weight; their experiences are crucial to redraw the consumption map.
Chinese understand brands as a standard part of building a reputation. In this equation, a well-known premium mark signals keeping up, not being left behind. To gain status, a young person must become a field reporter and curator, retrieving and making sense of lesser-known brands (relative to their own groups) to add to the chart.
Figure 3: Youth are consumer pioneers, mapping and spreading brand knowledge
In the last few years, companies have recognized and projected forward evolving consumer complexities in their marketing. Enormous shifts in how youth see themselves, their relationships, and their place in the world have forced brands to get specific in how they relate to their audience. As companies recognize and even contribute to the conversation, opportunities for mutual benefit emerge. How can marketing help the first generation of single men – and women – ease the burden of aspiring to an unconventional ideal? How can a company help a young person feel their power to positively affect social change? And how can a brand encourage and even embody the spirit of entrepreneurship and flexibility required to succeed in an ever-changing China?
Successfully marketing to youth requires a brand to know who it is, understand its consumers and clearly emphasize why it matters to them. Uncovering common ties with target audiences enables a brand to build a story based on shared passion points. To create a relationship that resonates, the key is to add real value to consumers' current lives and the lives they hope to lead in the future. From this angle, channels (in stores and across media) are not the end goal, they are opportunities to prove value and own the brand’s story. The challenge is universally applicable but in China, the map must be strong enough to make an impression but also be drawn in pencil. Consumers, competitors, and relationships are a work in progress. A brand has to be confident in how it thinks of itself and its audience while at the same time being nimble enough to keep pace in a changing landscape.
Figure 4: Chinese are pushing consumption faster than brands
These opportunities for reflection and re-evaluation are not limited to the borders of mainland China; companies around the globe are embarking on a similar journey of disruption and change. The smart ones are relaxing their grip on how they see themselves and the world to make way for a new chapter. Lessons of flexibility, translation, and empathy earned on the front lines of China’s dynamic youth market thus have potentially much broader application outside the here and now.
As the world continues to pull closer together, old ideas about right and wrong ways to do things are challenged. This is scary because it means uncertainty; it calls into question the usefulness of terms like “developed world” and “reverse innovation.” But ultimately, the challenge offers a deep reward. By examining hierarchies and assumed protocols, we are forced to allow a more flexible way of thinking about people, culture, and brands. In this next phase, localization will evolve from buzzword to simply meaning knowing your audience and telling your story in a way that matters to their world. In this new era, a product is more of a visual badge marking the success of a relationship exchange than an end goal of a one-way transaction. By leading with passion points common to target consumers, brands will reinforce their own values and prove their worth. This is a long-term shift in vision. To win, consumers, partners, and employees will need to speak for the same goal, even if they do so in different languages. Thinking about the world and our place in it as an ongoing and flexible exchange of value is something that will make us all better marketers, consumers, and even people.
Mary Bergstrom, Shanghai, 2012
All Rights Reserved