Business Intelligence on Retailing, Franchising, and Consumerism in China

Chinese Consumer Segments Open To Buying Foreign Brands

Companies seeking to capture the attention of the increasingly brand-savvy Chinese consumer need to tailor their marketing strategies in response to the preferences and attitudes of three distinct customer segments in China that are most open to buying foreign brands, according to a global study released by Accenture.

The study, based on an online survey of more than 1,000 consumers in urban and suburban areas in China, identified six distinct customer segments in China, including three that have a stronger preference for foreign brands and the brand characteristics they value most.

According to the findings, the consumer segment most likely to purchase foreign brands is the "Young Royals," which consists of young college-educated adults, mostly women, who are more affluent, free-spending and keenly interested in foreign brands. This segment was twice as likely as any other segment to buy newly introduced brands and the most likely to say they want to be the first to test new brands.

Two other segments likely to purchase foreign brands are: the "Aspirationals" — young male and female consumers who, like the "Young Royals," are highly brand-conscious and aspire to have the "latest and greatest," but whose low income makes them unable to buy what they want; and the "Established Money" segment – higher-income men and women who, like the "Young Royals," want the latest in technology and high-end, exclusive products. However, those in the "Established Money" segment value brands that are well recognized in the market.

The study also identified two consumer segments in China that are predisposed toward the purchase of domestic brands: "Patriots," defined as overwhelmingly male consumers with average incomes who buy Chinese brands out of a sense of loyalty to their country; and "Value Buyers," heads of households who favor practicality over flash and value over exclusivity. The sixth consumer segment, "Brand Apathetics," tended to be rural or suburban students with little or no income who exhibited little discernable interest in brands.

"During the past decade, the Chinese marketplace has emerged as an important, but challenging business target in today’s global economy, with consumers whose buyer values and purchasing habits have evolved dramatically," said Woody Driggs, managing director of Accenture’s Customer Relationship Management practice. "Many foreign companies have tried, but few have succeeded at selling into this diverse, complex and often confusing mega market, making it imperative for marketers of foreign brands to have their fingers on the pulse of changing consumer patterns."

The study also found that Chinese consumers were not as influenced by traditional marketing channels, such as direct mail and print ads, as consumers elsewhere in the world. Instead, they relied on recommendations from the people they know, product reviews, endorsements and digital media, including online advertising, multimedia kiosks and digital signage.

1 Comment on "Chinese Consumer Segments Open To Buying Foreign Brands"

  1. Ted Sturdivant | December 15, 2007 at 3:40 am |

    Excellant and informative article.
    Thank You

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