Ben Cavender CMR 3
Ben Cavender

Business in China is going through a paradigm change as the traditional price competition is giving way to quality, tells business analyst Ben Cavender in CKGSB Knowledge. Chinese companies need to get away from the price-based competition that they used to gain market share.

CKGSB Knowledge:

[Ben] Cavender [Associate Principal of the China Market Research Group] says that making the shift from competing over price to competing over quality is not easy.

“I think the first step for brands is really emphasizing design. Start to invest in R&D, hire good designers, come out with very attractive signature products,” Cavender says.

Companies also need to focus on their service and their outlets. “It’s not just the ad copy,” Cavender says. In retail, for instance, Chinese companies tend not to have good training programs in place for store staff or good standardized plans for developing stores.  Location-picking is not yet a science either.

Nor is the need for quality limited to the look of the shop. Overall efficiency is important. Having a good inventory system in place, for instance, helps creates the kind of trust customers need to feel the brand is reliable, according to Cavender.

Training programs to standardize service are crucial as well, but not easy in a market where many workers change jobs frequently. “It’s a struggle because it’s expensive to do that. There’s a lot of turnover in the retail space,” he says.

More in CKGSB Knowledge.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

This summer Ben Cavender gave an overview of efforts by foreign companies in localization on the China market. Including examples from IKEA, Gap, B&Q and Dunkin Donuts.

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