After attending a recent Greater China Conference it is apparent that now is the right time to take advantage of the opportunities China can bring to us and we to it. There are 1.338 BILLION people in China and approximately 15 Chinese consumer brands already appear in the WPP top 100 brand charts.
‘Everyone’ in the tier 1 cities in China wants to buy international brands. The biggest growth areas, indicated by increasing website visits, are health, fitness, beauty, education, cars (the average age of a Lamborghini owner in Shanghai is an astonishing 24) and car clubs.
At the same time China isn’t without its challenges. As the country moves through the Kuznets curve new challenges are presenting themselves in no uncertain terms. The government is attempting to drive growth down from 10% to 7%. The environmental challenges the country is facing are massive, the labour market is getting tighter and skills shortages are already apparent.
The current boom has been achieved through rapid urbanisation which has delivered huge growth but at a rate that cannot continue. In fact, according to Jonathan Watts author of `When a Billion Chinese Jump` and the Guardian’s Asia correspondent, the biggest fear is China running out of water.
Speakers at the conference, including Watts, Stefan Rust, Exicon, Richard Tsang, SPRG, Nicola Menelssohn, IPA (recently returned from a trade delegation visit to China) shared more of the above and more of the below but in particular some sage advice if you are thinking of doing business in China (some of which might sound familiar to us Europeans)
China is not one market
Developing ’guanxi’ (relationships) with government officials or influential individuals is key to success
Understand the importance of ’face’
Speed – fast response times are expected
Scale – individual Provinces can have between 50-100 million people
Many Chinese companies insist on playing by their own rules
And as I open Jonathan Watts’ book the opening paragraph tells us what is waiting. ‘As a child I used to pray for China………….And please make the world peaceful. Please help the poor and hungry people, and please make sure in everyone in China doesn’t jump at the same time (which would shake the earth off its axis with disasterous results for us all).’
Scary, but China is the home of scary numbers. Here are a few mind boggling China facts:
Population – 1.338 billion
GDP- $6.3 trillion
In 3 years China added more internet users than exist in the USA
PC penetration 16 per cent % in 2007 will be 25 per cent by 2013
IT spend 2011 – $80.2bn
You can’t show a Chinese policeman in an ad in China (it’s ok if he/she is US/British, though)
Key language is Putonghua plus its 1000 dialects
Shanghaiese is a different language to Putonghua
Five Provinces have 49.9% of all mobile users
The Nokia OVI store owns 65% of app store visits in China
Decline in web useage -3%
Increase in mobile web usage +28%
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China – 1.338 billion Reasons to Pay Attention
Posted by Helen Holland January 4 2012 01:56pm