Lamborghini vs Water: Understanding Chinese Consumers in a Nutshell

Everyone wants a piece of the world's largest consumer market; so what do Chinese consumers want?

I recently came across a story about a wealth Chinese woman who was on her way to purchase a car, a Lamborghini actually. She stopped to buy a bottle of water, the street vendor wanted 3RMB ($0.46 CAD). She argued with the vendor that the market price for bottle of water was 1RMB and she was not going to pay this outrageous price. They finally settled on 2RMB.

You might think, well, that is just silly. A woman who can afford to buy an ultra luxury Italian vehicle couldn't spare that an extra RMB for a bottle of water. The truth is the Chinese will not hesitate spending big dollars on items that will make "face" look good or can outwardly reflect one's status. Recognizable international brands such Louis Vitton, Nike and etc are what the Chinese lusts after. However, they are very practical when it comes to products that reflect low "face" value such as water. They are very educated on the value on these products and will not pay a penny over the market value.

Chinese consumers maybe very sophisticated about tangible products like cars, clothing, shoes and etc. However, their understanding towards service is still in its infancy. One of my professors during my studies was an executive for Disney. He talked about one of the issues with Disney Hong Kong was it was very difficult (nearly impossible) to train employees to provide North American equivalent standard of services. The Chinese' understanding of good service is currently one dimensional: getting the job done and do it fast while an average North American may value multiple aspects and often, small or finer details of a good service.. Having lunch with a friend from China, he complained about the slow bank service in Canada: "I just wanted to open an account. I was in the bank for 1 hour listening to the teller explaining in every detail of my new account. In China, it would take 5 minutes."

In order to market to the Chinese, you better understand how the Chinese behave. A lot of research should be done before entering the market or else it come can be a very costly mistake.