Many business people have become anxious about the China market. No reason, argues business analyst Shaun Rein in the Australian Financial Review. Income is still going up, but you need a strong stomach to crack the China market.
Australian Financial Review:
The enormous opportunities for Australian food companies in China were laid out in compelling presentation by Shaun Rein, managing director of China Market Research Group.
Rein meticulously dissected the major drivers of consumer demand in China ranging from the impact of pollution on shopping habits to the shift in luxury purchasing habits from Louis Vuitton bags to international travel.
He provided several embarrassing examples of international firms that had attempted to crack the Chinese market with ill-thought through advertising campaigns that showed a total misunderstanding for local consumer culture.
Rein says CMR research showed that Polo Ralph Lauren totally missed the mark with its ads featuring blonde American models. These turned off Chinese buyers who thought the clothes would not fit.
GAP made the same mistake by using a male model with tattoos, which are normally associated with Triad gangsters.
He says one high-profile global manufacturer of fast moving consumer goods had made a grievous error by lowering its production standards in its Chinese factories with the inclusion of carcinogens banned in the United States…
Shaun Rein, founder and managing director of the China Market Research Group, said Australian firms needed to overcome their “fear” about on-the-ground investment in China.
“They need to understand, that especially on the consumer side, this is a real economy,” he said. “Wages are still going up … there is still a lot of consumer optimism.”
Mr Rein, who has been living in China for 20 years and set up his market research firm in 2005, said Australia was better positioned than any other country except for New Zealand to benefit from consumers’ rising demand for clean, green products. “People trust you,” he said, adding that pollution problems across China were changing the way consumers spend, with a premium on overseas travel, healthy food and supplements.
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