Thursday, March 20, 2008

The Eclectic Chinese

A holiday to sweep the tombs

Chinese traditionally bury the dead. However, after the enlightened communists took reign of the country, they very rationally declared that the priority for the land is for the living and not the dead. Chinese were told to cremate the dead, burials were banned as was the erection of tombs. Given this, it seemed surprising when earlier this month, the Chinese government declared Tomb-sweeping day to be a new holiday in China. Along with the Tomb-sweeping day, holidays were also declared for two other traditional festivals of Dragon Boat festival and Mid-Autumn festival. Are the Chinese re-discovering their traditions? After years of efforts to obliterate the traditional shackles, is the Chinese government now encouraging the people to celebrate their traditions? What makes it even more surprising is the fact that these holidays will replace the three day holiday observed for the May Day celebration – an occasion of symbolic importance to socialism, whose ideals the Chinese government still claims to espouse.

The three day May Day holiday was, in fact, used to be extended into a “golden week” by adding the intervening days to the weekend (the additional holidays compensated for by working on the preceding or following weekend). Before this declaration, China observed three “golden weeks” in a year – three week long holidays for the Chinese New Year, the National Day in October and the May Day celebration. This has been the policy since 1999, when the Chinese government decided that the citizens must get an opportunity to spend their new wealth and in the process further boost the economy. Now China retains two of these golden weeks, but has substituted the third with three one-day holidays for traditional festivals.

Rediscovering the traditions

The Chinese government, as one would expect, is governed more by practical logic than tradition or sentiment. The real reason for this change perhaps lies in the fact that the three golden weeks had started to create a mayhem by the en masse movement of millions of Chinese . The populace takes the opportunity to get out of their homes, visit their families or go for vacations. This causes an immense strain on transportation (most painfully witnessed during the Chinese new year, when thousands were stranded because of snow cased disruption) and other services, and people started complaining about the exorbitant prices, traffic snarls and poor service during these weeks. Additionally, for a country so dependent on foreign trade, it is perplexing as well as vexing for its international trade partners when they see the frenetic trade coming to an abrupt halt as often as three times a year.

However, apart from the rational, there are also emotional factors guiding the change. The Chinese, with their new found wealth and prosperity, now have a reason for celebration and pride. Embracing the old traditions, and practising the associated rituals with openness and confidence is a part of that resurgence of national pride. Chinese today not only want acknowledgment for their economic success, but they also wish to be applauded for their history and traditions. Chinese have set up Confucius Institutes in 50 countries, sent their terracotta warriors for display in the British Museum - all in an attempt to demonstrate that not only is this a country of extraordinary manufacturing prowess and technology, but also has a cultural richness which deserves noticing and appreciation.

Embracing the West

Not only does China seem to be rediscovering its own traditions, it seems to be embracing the ones from the West with equal gusto and enthusiasm. Christmas celebrations begin early and cut-out figures of Santa Claus started appearing in shop windows of departmental stores from the middle of November. The silver bells, figures of reindeers, elves and snowmen jostle each other in almost a chaotic, almost desperate representation of the Christmas spirit. In a rousing finale, large pictorial displays of Christmas scenes appear in office buildings and a Christmas tree with twinkling lights, encircled with gold paper covered pots of poinsettia embellish the entrance of every office or hotel.

For a country of atheists, this celebration of a Christian festival with such enthusiasm is perhaps baffling. However, Christmas in China is not about religion, but a modern paean to consumption and fun. Masses of people throng the streets, visit bars and haunt the stores for discounted products. Chinese celebration of Christmas, is a typical example of how China embraces the West to its own advantage and adapts it to selectively pick its best from their own point of view. So no Christmas cake or plum pudding – we prefer our dumplings (according to a TNS survey, Chinese consider no food in the world to be anywhere near their own) and no midnight mass – religion has no part to play here. But shopping, gifting, drinking and merry making is embraced with zest and passion.

The marketing challenge of understanding the Chinese consumer

Neither burdened with strong traditions and rituals, nor under the blind sway of the West, Chinese are behaving in an eclectic way in deciding what to embrace and what to discard. Their decisions are based on practical logic, commerce and now also a sense of national pride. For marketers it is essential to understand how the Chinese weigh several, often contradictory, arguments and pulls to make the decision. This is as true for which festivals to celebrate as it is for which products and brands to adopt. Only keeping a hand permanently on the Chinese consumers’ complex pulse can guide the marketers in the right direction.

Wednesday, March 19, 2008

The China Opportunity

The Unknown India

What do the Chinese think about India? Well, they don’t. 398 urban Chinese were asked to associate 24 attributes with 14 nations, including the US, Japan, Korea and India. 58% of the people associated no attribute whatsoever with India. By no stretch of imagination is India a salient nation in the mind of today’s Chinese. Among the younger generation, at best, it brings up image of excellence in software. Some envy the facility of Indians with the English language and wonder whether English is the mother tongue of many Indians. The older generation, particularly the taxi drivers, spontaneously start humming “awala hoon” on the discovery that their fare hails form India, bringing memories of a time when Raj Kapoor’s Awara was perhaps one of the five films that the Chinese government allowed its citizens to watch in a year.
A missed opportunity
The obscure status of India in the Chinese minds is a missed opportunity for India. There is much that India could achieve by raising their profile among the contemporary Chinese, as they gaze at the external world with awe and bewilderment and whose view of the world is yet to fully crystallize. It is the appropriate time to invest in creating a clear image and a distinctive identity for India, and by doing so, benefit from the momentum of the fastest growing economy in the world. While there are many areas of opportunity, the following do stare prominently as the ones that India is particularly well suited to exploit.
34.5 million Chinese visited a place outside China in 2006 – not even a small fraction of these visited India. To the Chinese today, the most attractive tourist destinations are the European countries such as France, Italy and the UK as also Australia.
How can India start to attract the Chinese tourists? There is a seed of a perception which could be exploited - according to a survey of Chinese attitudes towards different countries, while as a country with rich culture and traditions, the Chinese are proud of their own place – India and UK are at the second place. This perception of culture and tradition could be built upon to attract the Chinese tourists. While the Chinese material needs are being satisfied, little sustenance is available for their spiritual needs. Yoga is already a bond (albeit still a weak one today) which attracts the Chinese to India, as thousands of Chinese have taken to yoga it all its forms and exotic variants. These elements of Indian tradition and culture could be effectively marketed to attract a fair share of the Chinese tourists.
In the field of computer hardware and software, US is the clear leader in the Chinese minds – but India is rated next – though a distant next. However, a foundation already exists for India to exploit this image with a mild recognition that the Chinese give to Indian software expertise. Perhaps this is one area that the Indian software companies are already acknowledging and have taken steps to exploit. Infosys, TCS and Satyam have set up development centres in China and are gearing up to carve a share in the huge domestic Chinese software market. Chinese service industry is still in a primitive state in China and to grow and enhance its quality, software is perhaps one of the more important tools that it needs. Indian companies are in a good position to carve out a niche for themselves in this market – provided they build further on the existing image, make their presence felt in China and invest in learning about the needs of the Chinese industry.
Managerial expertise
While the economic growth of China is clearly because of policies of the Chinese government, the Indian acceleration is perhaps in spite of the Indian government. The Indian growth is clearly attributable to the private sector and their ability to efficiently exploit both the domestic opportunities and the export potential of Indian services. On the other hand, the big corporations of China are still largely state owned behemoths. The growth in the size and profitability of Chinese companies and the huge Chinese banks, is not because of their skills and innovation, but because of their monolithic position coupled with increasing money in the hands of the Chinese consumers. Few Chinese have heard of the Tata’s and their purchase of global companies and brands or the Ambani’s who seem to be expanding their skills to touch every area of Indian life. A knowledge in China of the proficiency of Indian private enterprise and the skills and expertise of the Indian manager, will create a huge opportunity for Indian talent and businesses.
Karishma (translated into Chinese as Qi Ji or miracle) has been on the air on several Chinese television channels. A few other Indian serials have also hit the Chinese television. The most popular Asian cultural imports in China are, however, Korean. Korean films, television drama and music are a rage in China (as they are in many other Asian countries). Korean films and drama, offer plots of family intrigue and romance, that are quintessentially Indian, indicative of the fact that Indian storylines and plots are likely to appeal to the Chinese audience. In fact Indian entertainment industry, given their experience and expertise could even develop special programmes for the Chinese audience. India is in a better position to do this than any other country - both in terms of the technical prowess and creativity, as well as their ability to understand what will move their Asian neighbours.
While India has always prided itself on its education institutions, the irony is that Indian students are coming to China for higher education in medicine and there is practically no reverse flow. Indian Institute of Science at Hyderabad gets more MBA applications from Asia than any other management school other than Harvard. Indian Institutes of Management and Indian Institutes of Technology are often rated as among the best in their class globally – a fact that India could gain tremendously by advertising to the Chinese. Chinese are travelling all over the world in quest of higher education, often enrolling themselves at poor quality institutions in obscure locations. While it is true that India is hardly able to meet the demand of its own citizens for high quality higher education, attracting international students is sorely required to raise the profile of Indian education. India needs to actively market its education institutions in China. While success may be limited in the short run, the long term potential is extremely attractive.
Need to create the Indian image and identity
Chinese do not have a high opinion of Indian products. For quality products they look up to Germany, the US and Scandinavian countries. When it comes to perfumes and luxury products, they think of France and for consumer electronics Japan and Korea dominate their thinking. However, India has a foundation of an opinion which could serve as a basis for creating a unique image and identity for India and what it can offer to China. India stands to gain immensely from embarking upon this effort – or in omitting to do so faces an enormous opportunity cost of further growth and international prominence.

Tuesday, March 11, 2008

A Porcine Issue

China Daily, the leading English language daily newspaper in China, reported some time ago that a hog weighing more than 1,040 kg was crowned the “king of pigs” in Ningxiang County, Hunan province over the weekend. To the best of my recollection, PG Wodehouse, while describing the adventures of the Empress of Blandings, never really mentioned her precise weight, but it would perhaps be a fair assumption that Lord Emsworth would have been proud of this achievement, if his own sow had reached such heights (or weights, to be more precise).
The story on the fattest pig is not the only porcine story in the Chinese papers. In fact, pig and pork have been extremely salient in china for some time. China’s consumer price index (CPI) jumped 4.7% in 2007, with the price of food showing particularly ballistic tendencies. Specifically pork prices almost doubled last year due to short supply and mounting feedstuff costs. Apart from rising prices for grain used as feed, blue ear disease - also known as porcine reproductive and respiratory syndrome - killed a large number of pigs nationwide last year. As a result, the Chinese farmers, despite their love for pigs and their meat, were less enthusiastic in rearing them than in the past. The central and local governments plan to launch a concerted effort to rekindle their enthusiasm for raising pigs and boosting pork supplies. China is on a comfortable and steady growth path and maintaining stability – whether it is in currency valuation, consumer incomes, political climate or pork prices – is of the essence.
The year of the golden pig

Ironically the scarcity of pigs came in the year of the pig (there was no shortage of chicken in the year of the rooster in 2005, and no shortage of dragons is expected in the year of the dragon in 2012) – though rat population hopefully would be contained in the year of the rat which started this February. In Chinese tradition, each year is cyclically assigned one of the 12 animals, each of whom are believed to bestow some specific benedictions and character idiosyncrasies on the humans born in that specific twelve month period. The year of the pig is one of the more cherished ones and thought to bring luck, prosperity and ampleness (like itself). A person born this year is likely to be intelligent, honest, courageous, gallant, and sincere. They are good implementers can be relied on to see things through. They also tend to be popular and make lasting friendship and are good neighbors.

The years also rotate through five elements of metal, wood, water, fire and earth – and when pig and metal (gold really) coincide (as it was believed to have happened this year) the floodgates of fortune are expected to open like never seen before (or only seen 60 years ago, as that is when it would have occurred before).

It was under this expectation, that the youth of China timed their sexual activity to ensure the arrival of their off-springs in this auspicious period. It is reported that this year saw the birth of a lot more babies than the previous years. Of course, none thought about the pressure it will bring to the lives of the Chinese obstetricians, who were getting used to an easy life, thanks to China’s one child policy. Similarly, the supply of maternal beds and other wherewithals related to child birth are also reported to be strained. On the happier side, figures indicate that the companies manufacturing diapers, baby foods and other goods of “little” interest upped their advertising and reaped generous rewards.

The marketing opportunity

Marketing companies often struggle with the extent to which they need to balance their global strategies with the subtleties of local culture and traditions. The fervent communist era in China and the cultural revolution did its best to liberate the Chinese from the shackles of their traditions and beliefs. However, the interest in Chinese Zodiac, the strong beliefs about lucky and unlucky numbers (most Chinese buildings do not number the 4th floor, as number 4, because of the similarity of its Chinese pronunciation with death, is believed to bring misfortune) and the increasing enthusiasm with which Chinese traditional festivals are celebrated, seems to suggest that companies will be well advised to take cognizance of the traditions, and develop their marketing campaigns to take advantage of the consumer interest in these. The more marketing savvy companies in China are already launching special communication and marketing campaigns around traditional festivals. The festival related marketing activities are likely to receive a further boost from the recent government decision to declare three additional holidays for the Chinese festivals of Tomb-sweeping day, Dragon Boat festival and Mid-autumn festival.

The fattest pig in China

While marketing companies deliberate on appropriate strategies to win the hearts of the Chinese consumers, it is reported that the owner Xiao Shahong of the Chinese “king of pigs” apparently declined an offer to part with her precious animal, at a record of more than 50,000 yuan ($6,730). It is befitting that the prized pig is preserved, loved and cherished while the Chinese just finished celebrating the last few months of the year symbolized by it.