Most executives of multinational corporations [MNCs] are generally aware that developing business in China poses very real and unique challenges that should be incorporated into initial investment and overall business objectives. However, eager to take advantage of China's so-called never-ending growth and scale, companies can develop strategic, often operational, error calculations that may affect their ability to achieve their goals.
Here are some of the most common misconceptions about China:
1. from
China is like the United States in the 1950s [or Japan in the 1980s, or Mexico in the 1990s, etc.].
This seems to be a good historical analogy; however, China is too big, too complicated, and very harmonious with the rest of the world. In addition, China's consumer culture has soared on its own and on a very unique path.
2. from
China's public/government data is often unreliable from
.
The availability and quality of public data has recently made tremendous progress, especially for urban demographics. Close attention should be paid to the development plans of the central and municipal governments. Their plans are largely clear and ambitious. It is highly recommended that you visit your local mayor for the city targeted by the main business plan. These local government officials are often very willing to assist with new business development and provide a variety of important data/facts [ie population density, retail clusters, transportation infrastructure, etc.] to help stimulate growth within the community.
3. from
China's Internet is like the rest of the world.
Due to the recent highlights of Google's drama in China, their internet is very unique and it is worth taking the time to investigate. In fact, many large US websites such as eBay, Amazon, Facebook, and Twitter are mostly insignificant and almost non-existent. China has its own Internet pulse, which is quite different from the Western world.
4. from
Chinese consumers are divided into urban and rural areas.
This part is correct; however, most global brands actually spend time and effort in some limited areas of China, usually in 6-8 major cities. Most of China's consumer markets are concentrated in cities with an amazing population. More importantly, however, the cultural centers of Beijing, Shanghai and Hong Kong are rich and varied.
5. from
There is a huge generation gap between every decade.
Generation gaps are actually huge, and they appear more frequently than every decade. This is a direct result of rapid economic growth. Technological and cultural changes have led to a very different environment. Today's young adults in China are listening to various Asian boy bands and teenagers while watching the Chinese version of the reality show. Do they embrace different perspectives, which in turn will confuse their elders?
6. from
China is rapidly westernizing from
.
There is no doubt that China is modernizing and is increasingly influenced by Western culture. Just look at KFC and McDonald's across the country. But if these American restaurants offer porridge as part of the breakfast menu, can we really call it Westernization? Although Western brands and lifestyle choices have increased significantly, they have matched the increased interest in Chinese history and culture. In fact, there is a strong argument that China is becoming more Chinese. In addition, there is another often overlooked influence, which is located in North Asia. Japan, the world's second-largest economy, has set off China's rise and its cultural influence is at least as important as the Western world. South Korea also has a strong influence on young people in China.
7. from
Chinese youth are divided into tribes.
There is some truth to this. Young people now divide them at an earlier age; however, these tribes look different from their Western counterparts. In the West, we can use magazines, music and brand relationships to best describe a group or tribe. These are not commonly used in China because the print media is relatively small and the music scene is very out of touch due to piracy. In larger cities, brand preferences can be easily described, but in other parts of the country, brand differentiation is more ambiguous. Therefore, in these cases, children tend to prefer celebrity preferences, hobbies, and membership in multiple online clubs to differentiate themselves. In China, this can be said to be a lot of people; however, there are also huge liquidity and changes in this particular demographic.
As we have witnessed in the past 10-15 years, China's market dynamics are rapidly changing due to high growth and the influx of foreign and local private companies. Therefore, market research data must be regularly updated and reviewed to keep it up to date. In addition, due consideration must be given to the company's governance model, which combines its Chinese operations with a global perspective while retaining the autonomy of domestic business units.
Orignal From: Foreigners' mistakes about China
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