Reaching the Consumer in China
- Growing Sectors
- Consumer goods ((modern conveniences, decoration, automobile, tourism), construction products and services (restoration, construction, etc), high tech products and appropriate energies.
- Consumer Behavior
- China is a `collectivist' society, group prevailing over the individual. As a result, Chinese consumers largely 'adhere' to the standards and rules of the group to which it belongs. Enormous passion for golf in China (1 million golfers) during the last few years, testifies to this need to belong to a group (the affluent) and the consequent conformity of attitudes of individuals to the group expectations.
Also, advertizing promotions in China frequently directs groups rather than individuals. Today, the single child generation wants to live a very good life and thus spend (education, luxury items, consumption goods), especially in large cities. Theconsumption is often ostentatious as witnessed by the explosion in the number of luxury cars in the Peoples' Republic of China, as the Chinese nesocial recognition and thus membership of a group. Mainly due to the need for conformity with the reference group, there are hardly any individuals ready to run the social risk of being "different" as compared to their reference group. Contrarily, once a product is adopted by the reference group, the passion is extremely rapid and to a wider extent.
- Consumer Profile and Purchasing Power
It is not a single China, but many Chinas. The middle-class represents approximately 240,000,000 people, according to the Academy of Social Sciences of China, i.e. 19% of the total population. According to the more realistic estimate of the American firm Mc Kinsey (which tackles the `middle-class' issue from the incomes angle and not under the assets angle of the academy of social sciences); 105 million urban Chinese households, primarily on the coastal strip, should have more than 25,000 RMB per annum in 2009. According to the Mc Kinsey firm, the low middle-class should represent 290 million people in 2011, and would reach 520 million people in 2025. Today, 120 million Chinese still live with less than 1 USD/day.
The Chinese consumer is very brand sensitive. Chinese consumers feel that price is an indicator of the quality of a product. Price and sale service are the most important selection criteria. On the other hand, aspects such as guarantee, possibility of product refunds are less important. Generally, the Chinese attach great importance to information research on a product, before purchasing it. The independent information source is the word of mouth. Chinese consumers are eager to find out what is available, particularly as regards foreign products. They are very curious about foreign products but still prefer domestic products.
- Consumer Recourse to Credit
- Historically, China is a country with a very significant savings rate, one of the most important of the world. Consumer credit is developing but is limited.
- Consumers Associations
CCA , The Chinese consumer association
Media in Which to Advertise
- 95% of the Chinese population watch television. Advertising in television is thus a means of reaching a maximum number of users.
Anhui TV (AHTV)
Central Television of China (CCTV)
Beijing TV (BTV)
Tom Group Limited
Shanghai Media Group (SMG)
Hubei TV (HBTV)
- Newspapers and magazines are also a major advertising medium.
China Daily Group
Liberty Times Group
People Daily Group
- Advertising by mail enables reaching a targeted consumer. For the moment, this advertising medium is in a development stage.
- In Transportation Venues
- Varies according to the city. There are very few national companies. JC Decaux is beginning to be well represented in China.
- It is one of the least expensive advertising mediums which can reach users of different types.
China Radio International (CRI)
China National Radio (CNR)
Broadcasting Corporation of China
Beijing Broadcasting Network
Lanzhou Radio Group
Shanghai Media Group
Tianjin People's Broadcasting Station (TPBS)
- New Technologies (E-Marketing, SMS, etc.)
- Advertising by mobile phone and online advertising are increasing rapidly.
China Online Advertising
List of agencies using advertising media
- Main Advertising Agencies
Main Principles of Advertising Regulations
- Advertising content for alcoholic drinks must specify health licenses and cannot use medical jargons or words which can be mixed with pharmaceutical products.
- Advertisements for tobacco are prohibited on radio, cinema, television and in the press.
Advertisements for tobacco must indicate "smoking is injurious for your health."
- Advertisements for pharmaceutical products, medical devices or instruments cannot contain non scientific information, statements or promises on the effectiveness, a cure note or a rate of effectiveness, comparaison with other medicines or medical devises, use the name or the image of a medical research unit, university organisation, medical unit or doctor. A "purchase and use under doctor's prescription" note must be shown when necessary. Special pharmaceutical products such as anaesthesia, narcotics, psychotropic, toxic and radioactive drugs cannot appear in the advertisements.
- Other Rules
- Advertisements should "be good for the mental and physical health of the people" as well as "conform to the professional code of ethics and safeguard of the dignity and interests of the State." Specific regulations include prohibition of the use of national symbols and governmental images and prohibit publicities which are obscene, superstitious, discriminatory and/or dangerous for social stability.
For more information, consult the advertising law of 1995 (in English).
- Use of Foreign Languages in Advertisement
- Majority of the advertisements are in Mandarin.
- Organizations Regulating Advertising
Trade and Industry State Administration (SAIC)
State Administration of Radio, Films and Television (SARFT)
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