| Why do Chinese Consumers favor foreign brands? | |
|---|---|
| Sep 29, 2007 03:19 |   |
 | Despite of the big trade surplus in international trade, China, a economic power, begin heeding its loss of large market share at home. The Chinese government is facing a crux in its marketing strategy. That is how to win over the heart of fastidious domestic consumers. The statistics from China's Ministry of Commerce in 2006 shows that Foreign brands dominate China's domestic market. In the past ten years (1994-2004), the market share of foreign manufactures has beem quadrupled, up to 31%. In the industries of textiles, clothe and footwear, foreign brands took up 50% market share. In IT industry and domestic furnishings, foreign brands hold a market share of respectively 82% and 51%. That is to say, China is facing a manufacturing crisis. The key to improve the situation depends on how to raise its nationals' confidence in National Brands. Additionally, 60% of China's total value of exports comes from the contribution of foreign invested companies and joint ventures. 90% exporting companies import the raw materials or accessories from overseas market to keep functioning. How to win over its home customers is a harsh problem for China. With a population of 1.3 billion, China is a promised land with a hugh potential market. Why do Chinese consumers favor foreign brands? What do your think? |
| Sep 29, 2007 14:50 | #1 |
| Same kind of development is seen in all countries that have opened their markets to foreign goods. There is a growing amount of people living in cities, people with a better incomes than average. Their income has rised more than living costs. When I was in Nanning first time, I was amazed how dirty expensive foreign goods were. But city people can afford them. They earn well, but costs of living are quite the same as poorer people. So, I think a part of this percentage is because of the high prize of foreign goods. Of course some of those people need to show their standard of living by buying foreign goods that not all can afford. |
| Sep 29, 2007 21:23 | #2 |
| Carlos, "There is a growing amount of people living in cities, people with a better incomes than average. Their income has rised more than living costs." It is undeniable that urbanization in China has brought more people into big cities, and city-dwellers do have a higher income than farmers. However, I doubt that the income has rised than living costs. In recent years, the living standard of average Chinese did enhance a lot, but not to the extent that you have imagined. Inflation is a big problem. This year, almost everything ranging from meat, to instant noodles to house price, has increased the prices in China. So it is not the rise of the real purchasing power that motivate Chinese consumers to buy the foreign-brand goods. Then why? Partly, it is due to that average Chinese holds such a mentality that foreign goods have a better quality.For some goods, it is the case, but for some, it may not be true. |
| Sep 30, 2007 10:05 | #3 |
| I suppose You are partly right, Katrina. Still, I would say people in cities have quite a lot of money to spend. I myself was amazed because Lacoste or Boss shirt, for example, cost as much as here in Finland. Australian wines, brandys and whiskeys cost more than here. So, obviously someone can afford to buy them. I feel quite strongly that people don´t buy foreign brand goods because they need them, but because they can show their living standard to others. |
| Oct 2, 2007 03:03 | #4 |
| It is not only the Chinese who prefer foreign beand, but also most of the Asian Countries. I guess the Western manufacturers have had a head start in marketing their products with strong advertising money, promising exclusivity, great lifestyle, durablity and everything a consumer always dream about. In other words, they play on your emotions and your dreams. Asian manufacturers have not reach that level of advertising level yet, but we are getting there. Look at Hier, and other Chinese manufacturers. They give the Western manufacturers a run for their money right in their own backyard. |
| Oct 2, 2007 16:26 | #5 |
| Quote: "Partly, it is due to that average Chinese holds such a mentality that foreign goods have a better quality." About cars, I got an idea :p I guess they don't want to die too soon... Quality is a major issue... |
| Oct 4, 2007 21:56 | #6 |
| Quote: I feel quite strongly that people don´t buy foreign brand goods because they need them, but because they can show their living standard to others. Carlos, I can not agree with any more. Generally speaking, those foreign goods are more expensive than the domestic products. Who can afford to buy them? Only those who have a better job and salary. Do you ever see that a farmer bought any foreign goods? Those who buy foreign products just want to show their lifestyle and status. That is why some young consumers would rather spend his or her salary of a month to buy a LV bag or some other luxuries. |
| Jun 27, 2010 01:51 | #7 |
| Bcz they are expensive. People are more likely easy to follow with the stream. To satisfy their vanity. |
Post a Reply to: Why do Chinese Consumers favor foreign brands?
Copyright © 1998-2024 All rights reserved.