According to Statistics (C. Textor, 2024), China’s 2023 GDP has reached an impressive $17.7 trillion USD, reaffirming its position as the world’s second-largest economy. This economic powerhouse presents vast opportunities for business and market expansion. However, venturing into this market has never been a piece of cake, as it requires a deep understanding of Chinese culture, which is intricate and nuanced. To effectively market in China, businesses must gain insights into consumer behaviour and anticipate their responses. Here are some essential aspects of Chinese consumers’ psychology presented by Cerberus Marketing that any business aiming to expand in China should consider. 

Patriotism

Chinese consumers are generally very patriotic and have a strong preference for products that promote their culture, which can be attributed to a number of different reasons. First, the Chinese government actively promotes cultural pride and nationalism through various campaigns and policies. This has heightened awareness and appreciation of Chinese culture among the citizens.

There is also a growing trend among younger Chinese consumers to reconnect with traditional Chinese culture, which makes them prefer products that incorporate elements of Chinese heritage.

Most important, supporting local businesses and products is seen as a way to contribute to the national economy, which further fuels patriotic consumption. Therefore, localizing content and incorporating Chinese cultural elements into products are crucial for any business looking to enter the Chinese market.

Pixar’s Strategy with Inside Out 2

Disney has excelled in this area. For the promotion of their upcoming movie “Inside Out 2” in China, Disney integrated the characters of the movie, which are different emotions, into Chinese characters that refer to emotions set against traditional ink painting backgrounds. This approach not only resonated with Chinese cultural aesthetics, but also showed respect and appreciation for Chinese culture.

Historically, Pixar has struggled to capture a significant share of the Chinese market. For example, “Up” earned only 1.8% of its $731 million global box office revenue from China, and “Brave” made just 0.8% of its $531 million in China (Forbes, 2024). Recognizing the growth potential, Pixar has been enhancing its marketing strategies to better align with Chinese cultural preferences.

Success of Zootopia

On the other hand, Disney’s “Zootopia” has been incredibly successful in China, generating over $235 million in revenue. Leveraging this popularity, Disney opened the world’s first Zootopia-themed area at Shanghai Disney Resort in late 2023. The new attraction has drawn large crowds, significantly boosting guest spending and attendance. As a result, Shanghai Disney Resort reported improved operating results in the third quarter, driven by higher visitor numbers and increased spending (Ren, 2023).

^{The opening ceremony of Zootopia land in Shanghai Disney Resort}

The success of Zootopia can also be attributed to an interesting fact of the movie: the diversity of the news anchor character. In China, the news anchor was changed from a moose, as seen in the U.S. and Canada, to a panda. The character was also changed for some other countries like Japan, Brazil, and Australia. This brief scene, despite lasting only a few seconds, had a significant impact on viewers which enhanced their interest in the movie.

^{In Zootopia (2016), the news anchor was customized to each country the film was shown. U.S. and Canada/moose, Japan/tanuki, Australia/koala, China/panda, and Brazil/jaguar.}

Takeaway:

The success of “Zootopia” and the strategic promotion of “Inside Out 2” highlight the importance of cultural adaptation. Businesses venturing into the Chinese market should prioritize understanding and incorporating Chinese cultural elements into their products and marketing campaigns. By doing so, they can build stronger connections with Chinese consumers and achieve greater market success

Face Work

In China, the concept of “face” (mianzi) is deeply ingrained in social interactions and consumer behavior. This concept refers to how deeply Chinese people care about their image in the eyes of others. While Western consumers tend to be more individualistic and treat social status and image as secondary to personal values and individual goals, Chinese consumers perceive their image to be of utmost importance. They believe losing face can be a significant social setback, whereas gaining face can enhance one’s social standing. Many people purchase luxury goods not just because they like them, but because these items represent success and social status.

A prime example of leveraging this cultural nuance is Chagee, one of China’s most prominent beverage chains. Chagee has successfully associated its brand with luxury as customers are drawn to Chagee not only for the quality of its drinks but also for its image as a premium tea brand, especially when the design of Chagee’s cups and paper bags bears a striking resemblance to the iconic Dior book tote.

_{Chagee’s design and Dior book tote bag’s design}

While it’s debatable whether this design similarity is intentional, it’s clear that this association has helped Chagee position itself as a luxury brand, thereby boosting sales. On social media, fans of Chagee have become unofficial marketers for the brand as they often highlight how others can “grab their free Dior-style bags” and enjoy a sense of luxury at a more affordable price. This peer endorsement further reinforces Chagee’s luxury image and appeals to consumers who are eager to project a successful and stylish image.

_{Sharing of a netizen on the Lemon8 forum}

Takeaway:

Understanding the importance of “face” in Chinese culture can be a powerful tool for brands. By associating their products with luxury and success, businesses can attract consumers who are motivated by social status.

Cost-Effectiveness

Price is a crucial factor for many Chinese consumers, especially those in the lower middle class and lower income levels. While they are willing to spend more on status items, non-status items are typically chosen based on cost. Understanding this psychology of affordability is key to targeting the right audience.

A perfect example of this strategy is Xiaomi, particularly through its sub-brand Redmi. Unlike Apple, which markets its products as high-end and luxurious, Xiaomi has implemented a dual-brand strategy of Xiaomi and Redmi to cater to different consumer segments as Redmi specifically targets lower-middle-class consumers seeking affordable, high-quality technology. Redmi products are designed to offer good performance and essential features at a lower price point. This approach allows consumers to experience the quality associated with Xiaomi without the higher cost.

Xiaomi’s dual-brand strategy is a textbook example of effective market segmentation. By clearly distinguishing between Xiaomi and Redmi, the company can target various consumer groups without diluting its overall brand identity. Xiaomi caters to consumers willing to pay a bit more for advanced features, while Redmi meets the needs of budget-conscious customers. 

_{The price range of Xiaomi (Kimovil)}

_{The price range of Redmi (Kimovil)}

Takeaway:

For businesses aiming to succeed in China, understanding and leveraging the cost-effectiveness aspect of consumer behaviour is essential. Xiaomi’s approach with its Redmi sub-brand demonstrates how companies can segment their market and tailor their offerings to different consumer needs. By doing so, they can capture a broader audience and maximize their market presence.

Herd Consumption

Younger Chinese consumers are more willing to spend than their parents and grandparents, making them the driving force behind the Chinese consumer market. These consumers are heavily influenced by peer perceptions and are constantly updated on new trends through social media. Therefore, leveraging social media and Key Opinion Leaders (KOLs) is crucial for effective marketing in China.

When leveraged effectively, marketing in China can be more straightforward compared to other countries. This is largely due to the strong herd mentality prevalent among Chinese Gen Z consumers, making them more receptive to trends and influences. In contrast, foreign audiences often come from more diverse backgrounds, requiring more individualized and nuanced marketing strategies.

However, it’s essential not to underestimate the importance of segmentation within China. Even within the Gen Z demographic, identifying and targeting smaller segments is crucial for delivering content to the right audience. A strong presence on platforms like WeChat, Weibo, and Xiaohongshu (Little Red Book), which are among the most popular Chinese social media, is essential for engaging with the target audience.

Perfect Diary, a local beauty brand, has masterfully utilized the online space for its marketing efforts. The brand shares trendy makeup looks, tutorials, and user-generated content, creating engaging and interactive content that resonates with young consumers. This includes makeup tutorials, beauty tips, and challenges that encourage users to try out and share their own looks using Perfect Diary products.

Perfect Diary also frequently partners with KOLs who have significant influence on social media. These collaborations generate excitement around new product launches which drives herd consumption. By associating with popular influencers, the brand amplifies its reach and appeal and effectively taps into the peer-driven nature of younger Chinese consumers.

_{Zhao Lusi, famous Chinese actress and singer, live streaming with Perfect Diary}

Takeaway:

To capture the attention of young Chinese consumers, brands must establish a strong social media presence and leverage the influence of KOLs. By staying attuned to social media trends and collaborating with influential figures, brands can reach and resonate with their target audience, fueling demand and boosting sales.

Culture Awareness

When marketing and advertising in China, it is essential to consider the Chinese language, culture, and symbolism. A company or product name may have an unintended negative meaning when translated into Mandarin. Additionally, cultural missteps in campaigns can lead to severe consequences. Given the high levels of patriotism and strong sense of community in China, a misguided or disrespectful campaign can significantly damage a brand’s reputation in the Chinese market. The people’s deep sense of national pride means that any perceived slight or disrespect can lead to widespread backlash and potentially bring the entire brand down.

A stark example of the importance of cultural awareness is the 2018 advertising campaign by Dolce & Gabbana (D&G). The campaign aimed to promote their upcoming fashion show in Shanghai and appeal to Chinese consumers. It featured a series of videos titled “Eating with Chopsticks,” which showed a Chinese model struggling to eat Italian foods like pizza, spaghetti, and cannoli using chopsticks. 

_{Footage from the “Eating with Chopsticks” series.} 

The videos were widely criticized for perpetuating stereotypes about Chinese culture. Many viewers found the content condescending and disrespectful. The use of chopsticks, a significant cultural symbol, in a humorous and seemingly belittling context, was particularly offensive. The backlash was swift, with criticism spreading rapidly on Chinese social media platforms like Weibo. Hashtags such as #BoycottDolce trended as users expressed their anger and disappointment. 

The controversy forced D&G to cancel their high-profile fashion show in Shanghai. Models, celebrities, and other attendees boycotted the event, leading to a significant decline in sales and a loss of market share in one of the world’s largest luxury markets.

Takeaway:

To avoid such setbacks, businesses must ensure their marketing strategies are culturally sensitive and respectful. Understanding and appreciating Chinese culture is crucial for building a positive brand image and maintaining consumer trust. That is why D&G’s experience serves as a reminder that cultural awareness is not just a nicety but a necessity for successful marketing in China.

Conclusion

China’s market presents abundant opportunities for business expansion. However, its complex cultural landscape requires careful and tailored marketing strategies. When executed correctly, these strategies can yield rewarding results.

To navigate these cultural nuances effectively, businesses should seek assistance from local teams that specialize in marketing within the Chinese market. These experts possess a deep understanding of consumer insights and cultural intricacies, ensuring that marketing efforts resonate with the target audience. Finding the right social media advertising company, especially WeChat marketing agency, is crucial in achieving the desired goals when entering into the China’s market.

If you’re looking for a partner to help you expand your business in China, Cerberus Marketing is here to assist! We can customize your brand image and marketing plan to seamlessly integrate into the Chinese market. From market research and strategy development to social media management and influencer partnerships (WeChat marketing services, Little Red Book marketing, Douyin marketing), we provide end-to-end solutions to ensure your brand makes a lasting impact in China. Partner with Cerberus Marketing today and let us help you unlock the full potential of the Chinese market!

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References

C. Textor. “China: GDP at Current Prices 1985-2029.” Statista, 22 May 2024, www.statista.com/statistics/263770/gross-domestic-product-gdp-of-china/#:~:text=In%202023%2C%20the%20gross%20domestic,in%20the%20world%20GDP%20ranking. 

Cain, Rob. “Can Pixar Change Its China Luck With ‘Inside Out’ Release?” Forbes, Forbes Magazine, 15 Apr. 2024, www.forbes.com/sites/robcain/2015/10/02/can-pixar-change-its-china-luck-with-inside-out-release/?sh=47eb17847251. 

Ren, Daniel. “Shanghai Disney Resort Opens World’s First Zootopia-Themed Attraction.” South China Morning Post, 20 Dec. 2023, www.scmp.com/business/china-business/article/3245738/shanghai-disney-resort-opens-zootopia-themed-attraction-capitalise-post-pandemic-travel-demand.