Comments on: Inside the Mind of the Chinese Consumer http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/ The MBA Graduate Program at Cal Poly Fri, 18 May 2012 15:09:37 +0000 http://wordpress.org/?v=2.6.3 By: Simeon Trieu http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-4057 Simeon Trieu Sun, 02 Mar 2008 05:22:06 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-4057 A lot has been said about the trade deficit in China. There is not enough spending going on. Maybe it's because they have nothing to spend? Much of the wealth is imbalanced. But, like <a href="http://calpolymbatrip.com/2008/china/moving-up-in-mumbai/" rel="nofollow">India, China is developing a middle class.</a> What does a middle class with money to spend do? Spend it! See a recent article from the Economist on <a href="http://www.economist.com/finance/displaystory.cfm?story_id=10688833" rel="nofollow">consumer spending in China.</a> A quote from the article reads: "import growth surged from 18% to 26% on the back of strong industrial and consumer demand. In other words, Chinese imports are now growing faster than exports." China is becoming a nation of spenders as well as suppliers. A lot has been said about the trade deficit in China. There is not enough spending going on. Maybe it’s because they have nothing to spend? Much of the wealth is imbalanced. But, like India, China is developing a middle class. What does a middle class with money to spend do? Spend it! See a recent article from the Economist on consumer spending in China. A quote from the article reads: “import growth surged from 18% to 26% on the back of strong industrial and consumer demand. In other words, Chinese imports are now growing faster than exports.” China is becoming a nation of spenders as well as suppliers.

]]> By: Chris Carr http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-1601 Chris Carr Tue, 06 Mar 2007 17:01:24 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-1601 CS Zeng, Thanks for checking in. Good insights. Thanks for sharing. CS Zeng,

Thanks for checking in. Good insights. Thanks for sharing.

]]> By: CS Zeng http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-1600 CS Zeng Tue, 06 Mar 2007 16:36:33 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-1600 The priority for many Chinese people is really to establish themselves by having a house and a job with a decent income. Not really much different from everybody else. However, we have ti understand that China has been economically poor for much of the 20th Century. Whilst the Western economies had developed economies during the last Century and with it the governments to manage the social needs. China was still struggling with wars and famine. People just were not able to afford a decent meal for their families, never mind a car or anything else. However, as more people go out into the cities to find work, more people have access to the kind of things we in the West take for granted. At least see and desire, if not able to buy. China missed out on the post-war booms the West and Japan had. South Korea was late, but is catching up. China as an economy still has a lot of catching up to do. To have a house or apartment is good, to have car on top of that is even better. The car is a status symbol in the minds of Chinese people. But their road networks are not able to cope with so many cars. Maglev express trains are great, but for everybody else, transport is hell. A recession might shake things up, but for the current generation of young people who have not experienced much hardship, it will be tough. The priority for many Chinese people is really to establish themselves by having a house and a job with a decent income. Not really much different from everybody else. However, we have ti understand that China has been economically poor for much of the 20th Century. Whilst the Western economies had developed economies during the last Century and with it the governments to manage the social needs. China was still struggling with wars and famine. People just were not able to afford a decent meal for their families, never mind a car or anything else. However, as more people go out into the cities to find work, more people have access to the kind of things we in the West take for granted. At least see and desire, if not able to buy. China missed out on the post-war booms the West and Japan had. South Korea was late, but is catching up. China as an economy still has a lot of catching up to do. To have a house or apartment is good, to have car on top of that is even better. The car is a status symbol in the minds of Chinese people. But their road networks are not able to cope with so many cars. Maglev express trains are great, but for everybody else, transport is hell. A recession might shake things up, but for the current generation of young people who have not experienced much hardship, it will be tough.

]]> By: Dan Beaton http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-160 Dan Beaton Wed, 12 Apr 2006 03:07:57 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-160 I found the Chinese work ethic Gallup reports far from what I perceived. I never thought “the primary aim of Chinese workers is to work hard and get rich.” Yet, since the People’s Republic of China is a communist state I always believed the Chinese worker found their work gratifying because it contributed to bettering the state. I believed misconception 2: “Chinese workers are highly dedicated.” With the rapidly growing output from Chinese factories I am dumbfounded that Gallup’s data shows 68% of Chinese workers don’t approach their jobs with passion and are essentially sleepwalking through their days. I thought employee dedication and enthusiasm was positively correlated to company success. Because of this lack of engagement Chinese workers experience, I do not believe China will be able to sustain the growth they are experiencing now. According to Gallup, many Chinese workers feel their company fails to give them opportunities to learn and develop. This limits their potential to assembly line factory work. Their creativity is restricted to day dreaming while on the job. Creativity on the job allows for new breakthroughs that advance companies tremendously. Consider Google engineers who all have “20 percent time” in which they’re free to pursue projects they’re passionate about. This free time generated fascinating technology like Google Earth and work in progress Google Mars. Creativity is an untapped resource in the Chinese economy. I believe the profits generated by low cost production, mainly due to cheap labor, will eventually hit a ceiling for China and the tremendous growth the country is experiencing will come to a halt. I found the Chinese work ethic Gallup reports far from what I perceived. I never thought “the primary aim of Chinese workers is to work hard and get rich.” Yet, since the People’s Republic of China is a communist state I always believed the Chinese worker found their work gratifying because it contributed to bettering the state. I believed misconception 2: “Chinese workers are highly dedicated.” With the rapidly growing output from Chinese factories I am dumbfounded that Gallup’s data shows 68% of Chinese workers don’t approach their jobs with passion and are essentially sleepwalking through their days. I thought employee dedication and enthusiasm was positively correlated to company success. Because of this lack of engagement Chinese workers experience, I do not believe China will be able to sustain the growth they are experiencing now. According to Gallup, many Chinese workers feel their company fails to give them opportunities to learn and develop. This limits their potential to assembly line factory work. Their creativity is restricted to day dreaming while on the job. Creativity on the job allows for new breakthroughs that advance companies tremendously. Consider Google engineers who all have “20 percent time” in which they’re free to pursue projects they’re passionate about. This free time generated fascinating technology like Google Earth and work in progress Google Mars. Creativity is an untapped resource in the Chinese economy. I believe the profits generated by low cost production, mainly due to cheap labor, will eventually hit a ceiling for China and the tremendous growth the country is experiencing will come to a halt.

]]> By: Brian Korfhage http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-135 Brian Korfhage Mon, 03 Apr 2006 03:27:17 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-135 First of all, I'd love to see the idea of "a billion customers" put to rest. While the disposable income of the Chinese consumer continues to rise, the number of people with disposable income is nowhere near the billion mark corporate America would love to believe it is. Although, convincing investors and the like increases the acceptability of high entrance costs into China. Anyway….I digress. This article was definitely informative and did a nice job of shaking the stereotypes many westerners have of the Chinese consumer/worker. It seems as though the rise of income is leading to more individualized people who are looking for entertainment uses with their hard earned dollars. Wait, individualization? Could this lead to free thought? Of course, which makes me wonder how far the Chinese government is willing to go with the capitalism experiment. As long as the people remained compliant and China's power and earning potential continues to rise, one would have to think that they will be tolerant of individual freedoms. But it seems, at some point, something's got to give, you're either capitalist or communist, the two ideas are related at a certain point, but it seems as though China, like many communist countries before it, are trying to skip some fundamental steps. To date, it's been the most successful integration of the two socio-political ideologies to date. It will be interesting to see how much individualism the government will allow, especially as foreign investment continues to poor in and the coiffeurs fill. First of all, I’d love to see the idea of “a billion customers” put to rest. While the disposable income of the Chinese consumer continues to rise, the number of people with disposable income is nowhere near the billion mark corporate America would love to believe it is. Although, convincing investors and the like increases the acceptability of high entrance costs into China. Anyway….I digress.

This article was definitely informative and did a nice job of shaking the stereotypes many westerners have of the Chinese consumer/worker. It seems as though the rise of income is leading to more individualized people who are looking for entertainment uses with their hard earned dollars. Wait, individualization? Could this lead to free thought? Of course, which makes me wonder how far the Chinese government is willing to go with the capitalism experiment. As long as the people remained compliant and China’s power and earning potential continues to rise, one would have to think that they will be tolerant of individual freedoms. But it seems, at some point, something’s got to give, you’re either capitalist or communist, the two ideas are related at a certain point, but it seems as though China, like many communist countries before it, are trying to skip some fundamental steps. To date, it’s been the most successful integration of the two socio-political ideologies to date. It will be interesting to see how much individualism the government will allow, especially as foreign investment continues to poor in and the coiffeurs fill.

]]> By: Gary Lam http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-134 Gary Lam Mon, 03 Apr 2006 01:42:18 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-134 Perhaps the buying trends of the Chinese, particularly luxury and entertainment goods, are because of what related to something Wain Beard said. He said that the Chinese youth would change their cell phones every 6 months, to make sure they have the latest model. He also mentioned that Chinese homes are modest, because outsiders do not see them. From reading One Billion Customers, and personal experience, perhaps the reason why Chinese consumers gravitate toward luxury goods and entertainment is because those are goods and services can be seen by other Chinese. It is an indication of wealth, and tied to wealth are the “traditional” ideals and stereotypes such as level of education and financial success. Perhaps the buying trends of the Chinese, particularly luxury and entertainment goods, are because of what related to something Wain Beard said. He said that the Chinese youth would change their cell phones every 6 months, to make sure they have the latest model. He also mentioned that Chinese homes are modest, because outsiders do not see them. From reading One Billion Customers, and personal experience, perhaps the reason why Chinese consumers gravitate toward luxury goods and entertainment is because those are goods and services can be seen by other Chinese. It is an indication of wealth, and tied to wealth are the “traditional” ideals and stereotypes such as level of education and financial success.

]]> By: Emile Davis http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-132 Emile Davis Sun, 02 Apr 2006 22:14:49 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-132 It is interesting that the Chinese workforce isn’t as dedicated as we thought. As the article states, this may put the quality and integrity of Chinese products in jeopardy. Wow. Cars cost 2-3 times many people’s salaries and about 10% of the highest income bracket own a car. If you call the average income in the US $50,000 (VERY high estimate), then 10% of the wealthiest people in the US would be driving around in high-end BMW 7 series, 500 series benz, turbo Porsches, and a few Ferraris and Lamborghinis. I’m just trying to get a picture of the survey. I think we see more than this percentage in the US. Upon first reading the statistic in the article, I thought to myself “in such an economy, why would some of the Chinese spend SO much money on a car?” The answer is because we do the same in America. The article makes a good point with the DaimlerChrysler. A small percent of a very large number is still a large number. Another take home message that I took away is that we have so much in this country. As students, we are most likely not at the top income levels, yet most of us probably have a computer, digital camera, TV, cell phone, car. This is something that really jumped out at me while reading the article. It is interesting that the Chinese workforce isn’t as dedicated as we thought. As the article states, this may put the quality and integrity of Chinese products in jeopardy.

Wow. Cars cost 2-3 times many people’s salaries and about 10% of the highest income bracket own a car. If you call the average income in the US $50,000 (VERY high estimate), then 10% of the wealthiest people in the US would be driving around in high-end BMW 7 series, 500 series benz, turbo Porsches, and a few Ferraris and Lamborghinis. I’m just trying to get a picture of the survey. I think we see more than this percentage in the US. Upon first reading the statistic in the article, I thought to myself “in such an economy, why would some of the Chinese spend SO much money on a car?” The answer is because we do the same in America.

The article makes a good point with the DaimlerChrysler. A small percent of a very large number is still a large number.

Another take home message that I took away is that we have so much in this country. As students, we are most likely not at the top income levels, yet most of us probably have a computer, digital camera, TV, cell phone, car. This is something that really jumped out at me while reading the article.

]]> By: Drew Lassen http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-117 Drew Lassen Wed, 29 Mar 2006 04:59:13 +0000 http://calpolymbatrip.com/2006/china/inside-the-mind-of-the-chinese-consumer/#comment-117 This article mentioned that Chinese consumers are becoming more focused on self-satisfaction, an idea that goes against many of our stereotypes. In the past, we have suspected the Chinese of being purely dedicated to the advancement of their establishments/ society, but this research clearly shows that they are far more individualistic than that. This result has implications for marketers in particular, who must decipher 1.3 billion new individual wants and needs. Additionally, these wants and needs are apparently completely different than those of Americans. One would expect that in a country where only about 12% of the households make over $3800, the hottest selling items would be basic appliances and other necessities... not so. Chinese consuers are choosing to spend more of their money on luxury/ entertainment goods. This progression of consumer behavior says something about the kind of lifestyle that the Chinese consumer wants to lead, and it looks a lot like ours. Just as an increasing number of Americans are choosing to spend more on lifestyle goods and save less, so are the Chinese. We aren't that different after all. This article mentioned that Chinese consumers are becoming more focused on self-satisfaction, an idea that goes against many of our stereotypes. In the past, we have suspected the Chinese of being purely dedicated to the advancement of their establishments/ society, but this research clearly shows that they are far more individualistic than that. This result has implications for marketers in particular, who must decipher 1.3 billion new individual wants and needs. Additionally, these wants and needs are apparently completely different than those of Americans. One would expect that in a country where only about 12% of the households make over $3800, the hottest selling items would be basic appliances and other necessities… not so. Chinese consuers are choosing to spend more of their money on luxury/ entertainment goods.

This progression of consumer behavior says something about the kind of lifestyle that the Chinese consumer wants to lead, and it looks a lot like ours. Just as an increasing number of Americans are choosing to spend more on lifestyle goods and save less, so are the Chinese.

We aren’t that different after all.

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