Summary of the Article, “chinese Consumers: Doing It Their Way”

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personal-computer business IBM. Lenovo was the first Chinese brand to do a global product launch in China, using a single tagline, unified advertising content and Ashton Kutcher, a Hollywood star, as spokesman based on a population that has more in common across boarders than within.

In reference to a growing population, a newly formed middle-class with very demanding customers and a growing number of wealthy citizens foreign marketers could think it is very easy to satisfy and penetrate the Chinese market. The fact that the Chinese hold foreign brands in high esteem and try to avoid local brands, especially in sectors where the local brands are not trusted, such as powdered baby milk for example, also made it easy for Western brands to enter the market. But times change and local brands are starting to gain power in sectors like toothpaste.

Despite of the change on the Chinese market, also the customers leading thought changed. The population is growing more discerning, resulting in the loss of willingness to pay the overpriced goods of foreign brands. This leads to a big competition on the market. Local rivals increasingly dodge multinationals like P&G, Pepsi, General Mills and so on. There are two or three times as many brands on the market as found anywhere else in the world, so competition is atrocious and the wild social-media of China is a challenge for every company. Furthermore Chinese customers are said to be very fickle and hard to pin down to a strong brand loyalty, which is underlined by a recent study, made by Bain. They found that the top five brands in ten categories lost between 30-60% of their customers between 2011 and 2012.

Even the first-mover advantage seems to be valueless, because those brands are now called old-fashioned or stodgy by a new generation, which is seeking different, subtler luxuries.

So as a matter of fact, multinational companies nowadays have to work much harder not only to satisfy the world’s most demanding market, but also to get along with increasingly strong local competitors and a quickly changing market.

To summarize it can be said that the Chinese market is leading the world’s market into it’s future. With the biggest consumption and production power China is influencing the whole development of the world’s market growth. Therefore the markets will start to look more Chinese, i.e. not only the request for luxury will increase, but also the online behavior will change.

Companies who are able to compete and successfully position themselves in the tough Chinese market are not only winning today, but also preparing themselves for the future.

In my opinion the text of The Economist on one hand forgets to mention an important point. China has more than five times the population then the United States of America. Therefore it is no wonder that there are more Apple Shops in cities like Shanghai, with a population of 24 million people, compared to San Francisco with about 7 million people. Also not really mentioned is that in China it’s not so common to spend more money than a person has for it’s personal interest. Chinese population tries to avoid debts as hard as possible because in their culture they are seen as failure.

On the other hand it’s now understandable why so much brands push into the e-commerce sector and try to set up customized websites to give their customers a new shopping experience. The Western marketers should use the demanding Chinese population more to create new trends and techniques that are very likely to be successful in the western world.

All in all the article gave a very good insight in the changing environment between Western and Chinese brands and why Chinese consumers have such an influence on today’s market all over the world.