Market Information

MODERN women display a higher appetite for luxury goods and property and expect to make their investments work harder compared with middle-class women, a survey has found.

Modern women in China - estimated at 17.4 million last year and likely to swell to 31.5 million in 2016 - are urban-based and aged 30 to 44. They have graduated from college and are professionally employed, according to the survey.

HSBC and MasterCard Worldwide conducted 1,736 interviews from February to May in Shanghai, Beijing and Guangzhou to identify the middle-class lifestyle and symbols of wealth and aspirations.

Fudan University was commissioned to devise questions and conduct the survey in the three cities.

Modern women display the strongest appetite for luxury goods with 85 percent having bought such items, followed by the middle class at 76 percent.

By Zhang Fengming 2007-12-8  Modern women’s insatiable appetite for sheer luxury

Chinese Domestic enterprises were urged yesterday to focus on using new business models to sharpen their competitive edge, as more foreign companies entered the domestic market.

“More and more transnational companies have entered the domestic market with competitive business models, posing a strong business threat to their domestic counterparts,” Liang said.

Via: People’s Daily online:  Try your hand at new business models, firms told

Photo by Joe: SOHO Beijing 2007. “Show your mercy to the green lawn”

A great sticky message is one that people can understand when they hear it, that they remember later on, and that changes something about the way they think or act.

Malcolm Gladwell’s The Tipping Point: How Little Things Can Make a Big Difference explains that successful messages have a Stickiness Factor: Stickiness means that a message makes an impact – it’s memorable.

“There is a simple way to package information that, under the right circumstances, can make it irresistible/sticky and compels a person into action. All you have to do is find it.”

Companies will often spend months coming up with business plans and product ideas for China but then spend only a few hours thinking about how to convey that message to their Chinese customers often translating it directly from English to Chinese. Great ideas need great messages. It’s worth spending time making sure that your message is going to be meaningful and memorable in the Chinese context.

When we undertook the market entry campaign for Canterbury of New Zealand we needed to create messages that would open doors and make companies sit up and listen. We wanted to present Canterbury’s company information in a way that would be irresistible to potential partners in China. Here’s a sample of some of the messages we used when introducing Canterbury to potential partners (translated from Chinese).

“Canterbury is the world’s original rugby brand, for this reason they have forever earned a place in history.”

“Canterbury’s products are the culmination of over 100 years of pride and tradition.”

“Canterbury is sold in many of the world’s leading retailers including Harrods and Saks Fifth Avenue.”

The elements in these messages that stuck in the Chinese mind were the references to Canterbury’s heritage and their international credentials “Ming Pai”. Ming Pai and heritage are two of the most important qualities Chinese businesses look for in foreign brands. We crafted stories and messages to reinforce these elements, giving just enough information to wet taste buds and leaving people wanting to know more.

Being able to create a meaningful message in China requires an understanding of the culture, language and a perception of how messages are understood and remembered by Chinese people.

The Stickiness Factor test

• Is your message going to be memorable?
• Does it make sense in the Chinese context?
• Is it practical – how does the message fit?
• Is the message unique?
• Is the message packaged to make the desired impact?

Unicon work with companies to create meaningful messages in the Chinese context and we’re bloody good at it too! (kiwi context).

www.unicon.co.nz

Property development near Olympic Village - Beijing, 2007 by Joe

FOREIGN developers and corporations will start to pay a land-use tax starting from next year in Shanghai, according to a notice issued by the city government yesterday. The land-use tax will range between 1.50 yuan to 30 yuan (US$4.06) per square meter, per year depending on the size and location of the property, the notice said. Foreign companies are exempted from the tax before the notice takes effect but they still need to pay certain fees for land use. Domestic companies have been paying the tax since 1988. Individuals are exempt from the tax on their residences. The new policy means that developers have to pay tax for the land approved by authorities for construction of property projects. The move is widely expected to add costs to developers which are hoarding land in order to fetch higher selling prices in the future. “The tax won’t affect the city’s housing prices since it has been imposed for many years,” said Xue Jianxiong, head of research at Shanghai Youwin Real Estate Information Service Co Ltd. “Foreign firms mainly use office buildings, which account for less than one percent of the city’s land,” Xue said. The notice ruled that land inside the Inner Ring Road will be levied 12 yuan to 30 yuan per square meter and land between the Inner Ring Road and Outer Ring Road will be levied six yuan to 20 yuan per square meter. China has imposed a variety of taxes on developers, such as a land value-added tax and land-transfer fees. The country will also levy a property tax in 10 regions on a trial basis next year, including Beijing, Shenzhen and Liaoning. Analysts said that the property tax can reduce the number of idle properties, boost supply and slash housing prices. Last month’s average housing price in the mainland’s 70 major cities jumped 9.5 percent on a yearly basis, compared with September’s 8.9-percent growth rate.

via Shanghai Daily: Business by Winny Wang on 11/29/07 Foreign firms to pay land-use tax next year

As part of their overall entry strategy, Unicon Group have launched the Canterbury of New Zealand Chinese information website.

www.canterburychina.com

A NEW Zealand kiwifruit marketing company took a Jiangsu Province fruit trading company to court, accusing it of trademark infringement and demanding 300,000 yuan (US$39,474) compensation. Shanghai No. 1 Intermediate People’s Court heard the case yesterday but didn’t give a verdict. New Zealand Zespri Group Limited, the world’s biggest kiwifruit marketing company, sells kiwifruit in about 70 countries and regions. It entered the mainland market in 1998 and registered its trademark as Zespri with a logo showing sunbeams. But company officials found a similar trademark and logo on kiwifruit sold by Xishu Fruit Trading Company in the local market earlier this year. They reported the case to Shanghai Administration of Industry and Commerce, as Xishu’s fruit bore the trademark Znishio and a similar sunbeam logo. The watchdog seized about 100 boxes of the fruit and the labels. However, Zespri told the court that Xishu continued selling the fruit with the similar trademark, which also appeared on its Website. During the hearing, Xishu argued the two words were obviously different. The sunbeam, it said, was a common way of representing the fruit.

Source. Shanghai Daily: NZ fruit company sues Jiangsu trader

“The challenge of learning to speak Chinese fluently, the complexities of the Chinese way of doing business, and a strong sense of national pride mean that a foreigner will only extremely rarely be accepted by Chinese interlocutors on equal terms. The solution is to find a reliable Chinese ally to work with you. An effective Chinese colleague will often be able to analyse body language at meetings, work out who in the other negotiating team holds real power - not always the boss - and help smooth out any inadvertent wrinkles. Conversely, the presence of a Westerner should be exploited to the full. Chinese interlocutors will often see a visit by a foreigner as an indication of sincerity and commitment by the Western company. Perversely, they often do not accord mainland Chinese or Hong Kong representatives the same status as a foreigner. The ideal sales team, therefore, is often a Chinese to take care of the working level contacts, and a foreigner to do honour to the higher echelons” (British embassy, 2006).

Taken from:   Golden hints for doing business in China

Unicon can be an in-market ally for New Zealand companies in China. We give our clients  both kiwi and Chinese in-market representation. 

FOREIGN food companies are making a beeline to China hoping to tap the huge potential in the imported food industry as they cash in on people’s rising disposable income and easing of import tariffs. A record 800 companies from 35 countries and regions yesterday promoted their food specialities and beverages at FHC China 2007 in Shanghai for the first time. One of the largest international food, wine and hospitality equipment and supply exhibitions, it opened yesterday and will end tomorrow at Shanghai New International Expo Center in Pudong New Area. A wide variety of imported products will be displayed, from fresh and preserved foods, beverages, wine and spirits, bakery ingredients to confectionery, suggesting foreign companies are really eager to tap the emerging market. Seven Austrian companies are showcasing food specialities like Julius Meinl Coffee, Darbo jams and Pfaffl wines at their pavilions. “China’s entry to the World Trade Organization has lowered tariffs and brought economic liberalization that yielded gains for US food exports,” said Wayne Batwin, an official from the Agricultural Trade Office at the US Consulate Shanghai. “Continued economic growth boosted the demand for high-quality foods and improvements in retail, distribution and transport system also increased competitiveness of imported food and beverages in the local market,” Batwin added. Metro Cash & Carry China is one foreign food and beverage wholesaler which is benefiting from Chinese people’s interest in imported food. Revenue of imported food now makes up 10 percent of Metro China’s total food sales and the retailer has set up an imported food area in all its 34 stores nationwide to meet consumers’ demand, Philippe Bacac, general manager of Metro Cash & Carry China East China Business unit, said. Besides wine, snack foods such as ice creams and frozen foods are also becoming popular. “The competition in the snack foods sector is quite demanding amid people’s growing disposable income and willingness to try new things,” said Zhong Wei, marketing manager of Gourmedis (China) Shanghai Office. He also added that sales were also boosted as consumers trusted imported food meets international safety standard. Gourmedis, which added Alberto Pizza, Cellini Coffee and Maina cakes into its existing 1,000 items under 15 brands this year, is expected to double its turnover next year, Zhong said.

via Shanghai Daily: Business by Jin Jing on 11/15/07 Foreign food firms keen to bite into huge market

Here is a useful article from the guys at Idealog with information about brand protection in China

Idealog

Marketing should be seen as all the functions needed to move goods from the producers to consumers to satisfy consumers’ wants and needs” (Kenneth D. Weiss). Therefore marketing is part of everything you do as a company, from communications (including emails) to your products to your advertising and promotions.  

All marketing approaches should generally aim to:

1. Provide satisfaction and value to existing customers
2. Provide the promise of value to potential customers  

For companies entering China you are promising future value to potential customers, you are marketing perception not products.  You are marketing an image of your company and what you can offer. 

What this means is, be careful to generate an image that goes well towards people accepting your company as the one with whom they want to do business.  

Here are our four tips for companies entering the market in China

• Make sure you have a strong well thought out value proposition - think about exactly what you we offering.
• Ask clients what you can do to help them achieve success. Find out exactly what they are looking for. 
• Have the best marketing collateral you can afford. First impression count. 
• Return phone calls and respond to emails within 24 hours.
• Build relationships. Make sure you meet all your customers face to face and build interpersonal relationship with the decision makers

In every aspect of your business you are directly or indirectly delivering your companies message. The image you create and the perception that people have of your company will ultimately determine your success or failure.