kedd, 14.06.11

China is complex

It's all too easy to think of China as a single market. No one would treat the EU with its 800m people as a single market, and we think it's helpful to think of China, while a country in itself, as containing a similar great degree of variation - differences that are often significant enough to require different strategies.

by Alex Tan, Managing Partner, MediaCom China

China blog

Actually it's a kaleidoscope of different markets. China's 1.4bn people live in 31 provinces ranging from the sub-tropical south to the decidedly wintery northern plains. Although most Chinese have a common historical ethnicity - it's not an immigrant "melting pot" market like the US - there is staggering variation in growth rate, in lifestyle, in affluence and expectation as you travel across the country. We've drawn what we think is a useful parallel in our forum presentation to Europe as a region.

No one would treat the EU with its 800m people as a single market, and we think it's helpful to think of China, while a country in itself,  as containing a similar great degree of variation - differences that are often significant enough to require different strategies.

If you break down China into its six key regions then Northern China -including the capital Beijing - has the same GDP as the Netherlands. Eastern China - which includes Shanghai - has the same GDP as Italy and Southern China - including Guangzhou - has the same economic clout as Spain. And while we characterise China as a growth market, that growth hasn't been the same across the country. The North-West provinces account for just 5% of GDP and 7% of the population, while the South-West provides 15% of the people but just 8% of the GDP. By contrast East China accounts for 29% of the population and 38% of the GDP. Traditionally, the south and the area closest to Hong Kong has been seen as the most developed part of the country but in the last five years Shanghai has caught up.

Growth in China starts in the Tier 1 cities of Beijing, Shanghai and Guangzhou, spreads out to the Tier 2 conurbations such as Chengdu, Hangzhou and Tianjin and only then does it reach out to the Tier 3 cities such as Jiangmen, Xiangfan and Yibing. The rural areas have been the last to see improvements in living standards, but they are improving exponentially. Lifestyles and media habits also therefore vary greatly by location. We recently completed the largest-ever Chinese market analysis of the behaviour of recent and potential car buyers for our client VW, with a bespoke insight tool called RealWorld Drivers.

We found that lives in Tier 1 cities were significantly busier, working hours were longer, traffic jams were worse and digital media usage was both more widespread and complex. By contrast, in Tier 2 cities, we found some consumers had time to pop home for lunch, they had more hobbies and interests outside work and their media usage was still based around the traditional players such as CCTV and the major online portals.

 

Read more here.

 

 

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