Understanding Chinese Culture

Blog Post

Chinese New Year

Lunar Chinese New Year is an important traditional holiday celebrated by Chinese people all around world on the first day of every Lunar calendar year.

Traditions concerning the celebration of the Lunar Chinese New Year vary widely. Often, the evening before the actual day is an occasion for Chinese families to gather for the annual reunion dinner. It is also traditional for every family to thoroughly cleanse the house in order to ‘sweep away’ any remaining ill-fortune and make way for incoming good luck and decorate their windows and doors with auspicious red paper cut outs.


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Looking at China

China has the highest population in the world , predominantly made up of the Chinese ethnicity. It has become the beckoning land of opportunities as its economy mature. It is no longer just a place known for cheap labour but also for its growing consumer market. The importance of the Chinese market will only keep on increasing due to its rapidly expanding middle class sector. It is forecasted that China will triple their spending over the coming years, reaching $6 trillion by 2020.

For many international companies trying to get a break in the Chinese market, it has been either a hit or a miss. Marketing strategies applied to the Chinese markets are often the deciding factor behind their varied level of successes.

The key lies in understanding the market, which is very much influenced by their cultures.


Common Mistakes

  • Many companies believe that the same marketing campaigns that have been used elsewhere will also translate to the Chinese market, but this is often not the case. The Chinese preferences, tastes, and interpretations are different from those of other cultures, as such, it is important to create a variation that suits the market.
  • As much as localization would be the best bet to gain foothold in China, foreign companies must also take note of the possible negativity that comes from over-localizing. Companies might lose their unique “foreign” appeal, which differentiates them and their products from those of  Chinese companies.
  • Marketing mistakes in China come from various elements of the campaign, not only product but also promotion, price, and placement.


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Chinese Consumers Are Price Sensitive, but Brand Conscious

Although this seems to be a puzzling mix, the price-sensitive but brand-conscious Chinese consumer reflects an important duality. The key to understanding this puzzle is to appreciate the Chinese culture, where social status is crucial.

If a brand can represent a higher social and/or economic status, Chinese consumers would be happy to pay a premium.  If it doesn’t, they become very price sensitive. However for brands that does not have a social-status-recognition function and are used in private, it is important to introduce competitively priced items for the Chinese market.

Lack of trust

There is a lack of trust in China right now. Asking buyers to pay first without seeing the product is a hard sell. That’s why eBay failed in China.  Taobao, on the other hand, came up with a different model. It introduced a third-party payment system called AliPay. Buyers will pay the money to this third-party account owned by Alibaba (Taobao’s holding company), and only after they have confirmed receiving the products, Alipay will transfer the money to the seller. This model was very well received as it effectively solved the trust issue.

Three cents worth from the Author

It is vital to understand the psychological behavioural traits of targeted consumers and market for better brand connection. Failure to consider local conditions will result in ineffective brand marketing.

For instance, consider an average American advertisement where a family of four is shown to enjoy their vacation on the Californian beach. The same advertisement would not work in China for a number of reasons. A typical Chinese family has only one kid due to the country’s one-child policy, California beach is not anywhere in near vicinity and Chinese women generally avoid getting tans and thus would not be spending much time on the beach.

Inability to relate to the marketing messages could result in target audiences not understanding the brand. Or worse, misunderstanding the brand.

The focus and mentality of each individual varies according to their social classes to geographical location, beliefs to dialects. As such, brands looking to venture into the Chinese market must understand that “He that would perfect his work must first sharpen his tools”- A saying by Confucius aptly sums it all up. To fully understand the market as a whole one must first have the patience to learn and prepare before attempting to dive into it.