What’s going on with China’s economy, and what should New Zealanders know? In this series, the Asia Media Centre speaks to experts about aspects of China’s diverse economy, from consumers to financial systems to investment.
Henry Chung is an Associate Professor in Marketing at Massey University. He shares his insights on cracking the Greater China market and tapping into a wealth of local knowledge on our doorstep.
What’s the key thing international companies should know about doing business with China?
When foreign companies enter China, one of the major barriers are the cultural differences, and the differences in consumer behaviour. It’s quite important for them to understand the differences, and all strategies they need to address those differences. For example, there are some Australasian companies that design products for house-warming parties — they design a pure white product, which is very popular in Australia and New Zealand. So they think they are going to be very popular in China, but they forget that for Chinese, house-warmings are happy functions, so they would like to have something associated with red and bright. White is a symbol of death.
That’s the reason why we always stress the "homework", or international market research, is so important when you enter a market which is culturally and consumer-wise so different from your home country. There are so many companies that we speak to, and they say that in New Zealand we have so many untapped resources. Those are immigrants, from their country of origin but now they live in Australia and New Zealand. Those people still keep in touch with their country of origin very closely. For example, nowadays we understand that the situation in Hong Kong is uncertain. The majority of people I know from China, Hong Kong, and Taiwan, they all keep their 24 lines available to get their information about what’s happening in Hong Kong. What’s happening there will have a huge impact on the greater China market.
So immigrants can really help companies market effectively?
Yes, for example, livestreamers. Very popular livestreamers are so good at selling products. They’ve become celebrities. They have hundreds of millions of followers on the online shopping channel. We really need to catch up in the modern technology and how it can assist Australian and New Zealand companies doing business in China. One of the biggest ways is to use livestreamers, and immigrants can help do that.
I think we can apply the livestreamer approach in social media, at least to start with. We don’t know the market that well, we don’t know the country that well. To have those people to provide them with valuable information or support some of the activities conducted by the livestreamers, by celebrities, by endorsers. Then you start to have some recognition of the New Zealand brand. In a way, it’s piggybacking off the success of the existing celebrity already known to the WeChat users.
Don’t forget we also have some companies in Auckland, Wellington or Christchurch that help New Zealand companies penetrate the Chinese market using social media. We can approach some local companies established by new immigrants with frequent contacts who know their country of origin market and New Zealand products well. It’s sort of an intermediary between Chinese and New Zealand companies.
What other tools can marketers use to reach consumers?
Social media, for example WeChat, is so powerful now. There are hundreds of millions using WeChat every single day. We can, from an Australian and New Zealand perspective, use WeChat to send our message and tell them the benefit and innovation of the new product. Nowadays social media plays such a key role in acquiring information, particularly information about overseas products and overseas brands. Social media should play a much more important role than the traditional promotion media, such as television, radio and magazines. Nowadays I’ve never met anyone who doesn’t have a WeChat account.
China's a huge market. Is there such a thing as a typical Chinese consumer?
The city of Shenzhen has probably 20 million people. The province where Shenzhen City is located, Guangdong, has 100 million. So that just tells you the scope all over China. If we want to target every single person, it would be difficult and not very effective. One of the best ways is to divide the market into smaller segments and find a similarity. A typical example is baby formula. Generally speaking they don’t trust the locally-made brands, so that’s why so many young Chinese mothers go to Hong Kong to buy foreign-made brands.
Some also buy infant formula through online shopping. You might go to the supermarket and think, why are these people buying so much infant formula in one go? Those are typical examples of online operators. They buy the products on behalf of the young mothers in China. That is another business opportunity.
What other major consumer trends should we be aware of ?
A major trend has been new electronic payment methods using social media. When you go to China nowadays, you don’t need to bring your wallet. You simply bring your phone. They are already on 5G. In New Zealand we’ve yet to get to that level.
What if you can’t afford a phone?
No one can not afford a phone nowadays. Everyone has a phone, and everyone has a WeChat account. We are talking about a tiny population that doesn’t have a phone. If you don’t have one, you’re probably accompanied by somebody else already, for example a grandson or daughter-in-law with a 70-year-old at the supermarket. A phone is second next to your life, nowadays.
Interview by Rebecca Townsend.
- Asia Media Centre