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By Guest Reporter, September 3, 2010 11:57 am

Guest Reporting by: Valerie Beauchamp | Director of Human Experience Strategy, Starcom China.
Contact her at valerie.beauchamp@bj.starcommedia.com.

Mark Twain once said “clothes make the man.”  In China, it may be best to adapt that phrase to claim “the car makes the man.”  And not just any car…the luxury car.

Around the world, we have been flooded with the headlines these past 9 months – China has surpassed the US to be the world’s largest auto market, and despite the industry’s challenges in other parts of the world, things seemingly couldn’t be better in China.  Beijing’s Auto China 2010 saw 990 exhibitions from 2,100 auto makers and parts companies, with 89 models making their world debut and 40+ high-end luxury cars sold off the floor…the equivalent of 150 million yuan and $22 million USD being spent in a span of 144 hours.

The Chinese luxury car consumer seems to march to the beat of his own drum, with an unpredictable nature that would rival Emperor Xuan (known for renaming his palace, doubling both the tassels on his crown as well as the number of imperial vehicles, changing the official uniforms and much, much more).

So, what’s behind the momentum?  Or, more importantly…WHO is behind it?

Defining a Luxury Car

In the minds of China’s luxury car buyers – a group who, on average, is 10-15 years younger than luxury buyers in other markets around the world – a true luxury car carries a price tag of at least 1 million RMB ($150,000 USD).  Anything less than that is something they consider an “accessible” luxury car.

But there’s no need to roll down those garage doors and return home if your car is not an Aston Martin or Lamborghini.  In a market with 64 billionaires, six in every 10,000 people having personal assets of $1.5 million or more and a yearly growth of millionaires holding steady at approximately +6%, there are plenty of consumers still interested in adding an “accessible” luxury car to their collection.

What They Want & When They Want It

Chinese luxury car consumers are especially drawn to new models, and the distinction between a minority car (小众车) versus a street car (街车) is a clear and important one; the more unique my car, the more I am publicly expressing my differentiated identity.  This creates an interesting paradox for luxury car companies…the more cars they put on the road in China, the less attractive they are to their ideal consumers.  This consumer mindset also creates incredibly short ownership periods – most Chinese luxury consumers see the life span of a car as 2-4 years, resulting in purchase behaviors that look more like FMCG than they do large ticket items.

A need for instant gratification is prevalent in the luxury car space in China.  When Chinese luxury car consumers decide they want it – they want it now.  Telling the consumer you don’t have a model to test drive or that the vehicle will take 4-6 to arrive will send them right out the door and across the street to a competitor’s dealership.

The Unspoken Rules of the Road

There exists a strong, but subtle understanding that regardless of your purchase, stepping beyond your “position” is a big no-no when purchasing a luxury car.  If your boss drives an Audi A6 (or, more likely, is driven in an extended wheel base Audi A6L – a model developed to cater to China’s chauffer culture), it is best not show up at work in an Audi A8.  If you have a respectable job, a nice house and wife and son, do not make a fool of yourself by driving on the Ji Chang Expressway outside Beijing in a BMW Z4 – unless, of course, you have an X5 at home for those weekend family excursions.

But be aware of the legacy of the luxury car you drive in China…while a Mercedes Benz may convey a sense of nobility & honor and an Audi may connect you to a legacy of government and bureaucracy (Audi remains the primary beneficiary of the Chinese government procurement of official cars), a BMW may tell the world you are nothing more than “nouveau riche” or worse, that you are someone’s mistress.

As the China auto market matures, time will tell if the luxury consumer behaviors will evolve to more closely reflect those of other developed countries.  In the mean time, as competition heats up, and the cars with the higher price tags are reaping the benefits, luxury car brands that can sustain differentiated positioning, offer a highly varied model portfolio and help to reinforce a sense of “arrival” & convey an enviable – but not too showy – status position for their drivers have a promising future in China’s luxury car sector.

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By SMG Research Team, August 19, 2010 3:55 pm

How much do you know about China’s online social gaming industry?  I’m sure the name “Happy Farm” will have more than a few heads nodding.

In a nutshell, the heart of this type of gaming lies in interacting and playing with people you know, and who belong to your online social network.  They are usually hosted not on a third party website, but on social networking sites (SNS).

Globally, online social gaming has been around for several years and in China, this concept holds an enormous amount of untapped potential.  Today, social gaming does not conjure up the image of a teenage boy playing WoW at a local internet café til the wee morning hours. Instead, these games appeal to everyone – from China’s youth to moms (as seen in our Digital Moms research) to corporate white collar workers.

They have emerged as a convenient activity for netizens of all walks of life, providing a sense of release, relaxation and fun. Its immense popularity in China can be attributed to the mixing of China’s relationship-oriented society with their love of the online world.  Gamers take breaks to tend to their crops on Chinese developer 5 Minutes’ Happy Farm, or steal their friend’s car parking space on Kaixin001′s Qiang Chewei.

RenRen’s new approach

Looking at this trend more closely, we can see the weight social networking sites are placing upon social gaming and how it has become an integral part of their business model.  This new RenRen TVC is most telling – take a look:

(Click here to be taken directly to the Youku site if the above is inaccessible)

RenRen appears to have shifted their marketing focus from last year’s theme of ‘real-life stories of people using RenRen to connect’, to placing their messaging squarely in social gaming.  As you can see from the TVC, the animated vegetables, animals and furniture may look familiar to you – they are references to China’s leading social games.

The future of social gaming

Expect great growth.  Social networking companies are slowly beginning to open their sites to 3^rd party programmers (instead of designing games in-house, as was the norm with many major social networking sites such as Kaixin001 and Qzone).  This model is already available on RenRen, which has seen a proliferation of external developers bringing in highly popular and innovative games and in turn, higher traffic to the site.  It is also allowing Western developers, like Zynga, a powerful market in their international expansion plans. Zynga will be launching their first internationally localized game, Zynga Texas Poker, in Chinese to the Greater China market this year.

In China, Happy Farm has an estimated 23 million active users per day. Social games boast a superior distribution model across a variety of platforms – mobile social gaming being a hot one.

Chinese social gamers are becoming increasingly discerning about game quality, and as the variety, social components and innovation improve, it is a certainly that this industry will continue experiencing unprecedented popularity.

What this means to you as marketers

Social networking is the top activity netizens engage in, and it’s not only the starting point of their daily online journey, but a constant throughout the day. One source stated that many sites are now reporting that SNS are sending them more traffic than traditional search engines. The next few years will see a convergence between social gaming and mobile gaming – especially in China, where almost 40% of the 755 million mobile subscribers use mobile internet.

The potential for brands to reach consumers through these platforms are enormous, given the right partnerships and integrations. Virtual goods, often linked to social gaming, are a prime opportunity as well. It is estimated that the sale of online virtual goods in China amounts to USD$5 billion.  Click here for the reasons why this works in China.

Disney’s recent acquisition of social gaming company Playdom (for USD$763 million) shows how seriously companies are taking social gaming and with the international love-fest for them – especially in the most populous nation in the world – it’s a safe bet that this trend is here to stay.

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By SMG Research Team, August 12, 2010 6:05 pm

You read about Chinese Valentine’s Day in this past post.

Now I introduce you to China’s Men’s Day.  Truth be told, it passed last week (August 3), so we can make note of this for next year!

According to CNNGo, an online survey conducted by Shanghai Hotline saw 80.2% of 6,021 respondents saying they feel that a Men’s Day is in order to help alleviate the stress they experience.  This survey may have been prompted by International Woman’s Day (March 8), where all women in China get a mandatory half day off.  Click here to read what some women have to say about it.

Many men said that Aug 3 is appropriate because it is the third day of the eighth month, the opposite of International Women’s Day, which is the eighth day of the third month.  Shanghai city officials have not yet declared August 3^rd to be Men’s Day, but that hasn’t stopped some retailers from trying to cash in on the idea.  For example, for the past two years shopping mall No. 1 Babaiban in Pudong had special men-only discounts mall-wide, attracting many shoppers.

Personally, I’m thinking why not celebrate men also?  In Mao’s China, women ‘hold up half the sky’ – so I guess men hold up the other half and ought to have some perks too.  Now beyond the question of whether or not Men’s Day should exist, it’s worthwhile to note how retailers are taking advantage of this unofficial celebration, and the implications behind their actions.  Retailers are giving discounts to men – and receiving positive responses.  So I’d like to focus instead on what currently appears to be capturing the attention of our Chinese men – and this is shopping and perhaps even pampering.

How do they feel about grooming?

This brings to mind a study Starcom conducted last year about men and their grooming habits.  The hypothesis was that Chinese men don’t care about the products they use and will just use whatever their wife or mother purchases.  Through our quant study, observations and from other market knowledge, we have found that this is not the case.  Chinese men – especially those in major tier 1 cities – do care.  They care very much.

Euromonitor reports that two booming categories for men in China are skin care and hair care.  Chinese males are becoming more comfortable and confident purchasing their own products and both manufacturers and retailers have realised the importance of men’s grooming products, allocating considerable sums of money to advertising and distribution.

What we uncovered – Some quick Starcom top-liners

Good grooming = Workplace confidence and success: Chinese career-oriented men view personal grooming as a means to an end at work, placing more emphasis on good appearances for work over impressing females.  With heavy competition in the workplace, it is crucial to understand the importance of work success to the Chinese man and the lengths they will gain a competitive edge.  Thus, good grooming gives confidence and acts as an enabler to future success.

Displacing the myth of low-involvement: Chinese men are involved in personal grooming and they will read the back of bottles before purchasing.  They will also ask their family / friends, and even in-store associates for recommendations and information.

Grooming linked to health and well-being: Men associate good hair and skin care today with long-term health and preservation.  They are gaining more knowledge and awareness about personal health, leading them to take preventative measures against the effects of aging.

Impressing at work is essential before impressing the opposite sex: In order of priority, finding a wife comes after work achievements.  Not to say it’s any less important, but having a flat and a car (the two material goals all men we spoke to voiced) is also essential to finding a wife, thus adding even more pressure to their workplace success.

What this means to you as marketers

Be aware of your ever-changing Chinese male.  He’s probably not the stoic, impassive beauty consumer we once thought he was.  He is becoming more cognizant of everything from personal grooming to clothing and accessories.  This makes intuitive sense too – in a country where competition for jobs is fierce and where 30 million men will not be able to find wives, having a leg up over competition – even if it’s simply a psychological boost that comes from dandruff-free hair – may be what one needs to succeed.

Most Chinese males are still in the initial phases of learning.  So help him with career tips, beauty tips and also tips with women.  It was said that the highly popular website www.askmen.com started 10 years ago when a couple of male Canadian university students were chatting at a restaurant and noticed an impeccably dressed businessman in a dark suit walk in, sit down … and flash several inches of stark white sock. The boys ‘tsk-tsk’ed at the sock faux-pas and suddenly realized the truth that many men just do not understand the basic “dos and don’ts” and that they need education and guidance – in beauty and grooming and in life.  So began the website.

Chinese men are at this stage.  They are ready and willing to learn.  How can we help?

Related Articles
The growth in demand for male beauty products in Japan – BusinessWeek

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By SMG Research Team, August 6, 2010 4:14 pm

The fundamentals of what makes the World Cup special have not changed. 700 million viewers tune into the tournament globally.  It celebrates our need to connect with others, let passions rise, feel united within –and beyond– geographic boundaries… It’s about being human.  But what made this year’s World Cup stand out from previous events is the level of technological involvement that brought connectivity and human experience to new heights – from 3D screens, to social game viewing from the comforts of the internet.

This World Cup also marks the debut of Asia sponsors – China’s Yingli Green Energy and India’s Mahindra Satyam. It is expected that more Asian companies will get on board in future World Cup events.

In Starcom’s just-released World Cup Report, we tracked consumer attitudes, involvement and response to the World Cup across Asia in our ongoing IntenTrack research across seven markets (China, Hong Kong, Singapore, Malaysia, Indonesia, Thailand and Australia) before, during and after the games.

Below is one highlight from the report discussing the consumer’s shift in viewing dynamics:

Shifting Viewing Dynamics

More than in any other World Cup before, FIFA related content could be found online this year, with live games being streamed over a host of sites, drawing viewers to the online space.

Internet has become a facilitator of the total experience. For some, Internet turned into a replacement for TV especially for late night matches, for others Internet was an addition to TV.  For those more wedded to their TV sets, the viewing shift may have been an upgrade from a regular TV to purchasing a HDTV, or even 3D TV.  In the first week of June 2010 alone, combined units of high definition (HD) and full high definition (FHD) TVs in eight Asian markets grew by 249% compared to the same period last year.

But even though they are viewing on TV, they are still online simultaneously and doing things like checking game schedules, betting while the game is still on, or ordering food for delivery so not to interrupt their game. In Singapore, visits to fast food delivery sites were high (McDonald’s, KFC, Pizza Hut).

Not everyone in the house may like football, so if you are watching alone, you no longer need to drag others to watch with you in order to make it a social event.  Social is at your fingertips.  And for those with only one TV in their homes, they will not need to fight with their families about who is watching what.  Seeing as many people are already watching live TV online in Asia, the World Cup is a natural fit.

China viewers preferred TV for 19:30 and 22:00 matches, but online video for the late night 02:30am telecasts. This is an interesting trend, for in small sized homes in China, the TV is shared while Internet allows for private (and late-night quiet) viewing.

The world cup remains a social event traditionally watched on TV, but with this World Cup, the internet has become a viable, convenient, cost-efficient, real-time, quality alternative.

What this means to you as marketers

Online TV viewing is here to stay.

Even in China, where the World Cup games were available free-to-air on TV, fans turned online to access the games.  Expect for this behaviour to become more pronounced during Brazil’s World Cup 2014 as most matches will air in the morning in Asia – for many, during their work hours.

Anticipate and adapt to this new  breed  of viewers. Have presence in online spaces during major events (e.g. online sponsorship), as this will garner many impressions.

Be future-thinking with online advertising. Having access to the Internet while watching an event online opens up a world of possibilities.  Imagine a viewer watching a football game sees a cool pair of sport shoes worn by his favourite player.  By clicking the shoes, a second window about what the shoes are and where to buy them pops up.

Keep an open (and creative) mind for new possibilities with online TV!

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By SMG Research Team, July 9, 2010 5:12 pm

In this year’s recently released list of the World’s Richest Self-Made Women (complied by Hurun Report and Forbes magazine) six out of the top 10 women are from China!

The world’s current richest woman is Guangdong native Zhang Yin, worth US$4.9 billion, who made her riches from the paper industry.  (By comparison, worth US$1 billion, J.K. Rowling of Harry Potter fame did not make the top 10 and Oprah Winfrey, worth US$2.4 billion, sits at 9^th place).

Mao famously said, “Women hold up half the sky”, and it seems like he was onto something.  Experts predict that by 2020, China will have more female billionaires than anywhere else in the world.

Says Rupert Hoogewerf, founder-editor of the Hurun Report: “If this were a ping pong team, you wouldn’t be surprised to hear that five out of 10 of them were from the Chinese mainland.  But, when you are talking about the top 10 self-made rich women in the world, this is really mind-blowing.”

As a Chinese woman (and even if you’re not a Chinese woman!), this is really interesting.  I sat for a while thinking about China and how policies have come to affect women here, the history of Chinese women, and how they differ from women from elsewhere in the world.

Quick history:
Since 1949, China has promised women’s equality.  Mao abolished the practice of foot-binding and women were expected to perform the same jobs as men.  In 1950, new marriage laws arose banning concubines and the sale of brides and giving women rights in marriage (where they previously had little or none).  These changes in the Chinese family were imposed quickly and radically.

Urban city gals today:
Today, the empowerment of Chinese women is seen most markedly in China’s major urban cities.  I remember when I was chatting with university students in Shanghai and one female student in particular stood out to me.  During our hour-long chat at a McDonalds near her campus, I asked her: if she could meet any celebrity in the world, who they would be.

Now I’m rather ashamed to admit that I had *expected* her to say the name of a famous singer or actor.  So I was extremely (and curiously) surprised when she replied with:

“My dream is to meet Ren Zhengfei.”  (founder of Huawei Technologies)

I asked why and she said:  “I wish to ask him how he became so successful and to see if there’s any advice he would give to me.”

I then asked (out of sheer curiosity): Have you ever thought of staying at home and taking care of your child… and she replied (seemingly taken aback): “Housewife?!  I’ve never even thought about that!  I don’t think I ever will!”

Uniquely China:
Now what is it about China that breeds this class of highly ambitious, highly opinionated woman?  Some reasons:

1. The base ideal of gender equality as decreed by Mao, setting the tone for future generations to come.
2. China’s one-child policy, due to:
   a. More opportunities lavished upon girls. No longer are families giving opportunities to the boys in the family and overlooking the girls (often the case due to financial constraints).  Single -child girls are given opportunities and self-esteem boosting attention from parents, grandparents, and extended relatives.  These girls become their parents hope for a good future, so they are encouraged to get a good education, a good job and beat the boys in school.
   b. Freeing up women’s time. With only one child to care for, women take less time off and, simply, have more time to work and focus on their careers.
3. Family & community support.  In China’s multi-generation households and close-knit community networks and relationships, Chinese women receive more support all-around.  Not only in taking care of a child (which is a collective effort), but also support in her career.  Lending money for relatives and family friends to start businesses (regardless of gender), favours and guanxi are commonplace and all help the Chinese woman on her road to success.

What does this all mean?
Tons!  In general, with the number of successful, powerful, and ambitious women in China on the rise, look forward to changes not only on the business front, but also in society.  For with wealth comes political clout.  World’s richest woman Zhang Yin recently called for a gradual release of the 3-decade old one-child-policy and we can be sure that these smart, opinionated women will lead the way in many other changes as well.

As marketers, we need to pay attention to our women and to our girls.  If they’re not consuming now, you can bet that they will be.  And soon.  With a fire in their bellies and ambition in their eyes, Chinese women are passionate about succeeding.  Let’s help them do exactly that!

Top 10 Richest Self-Made Women in the World: