TNS-UniCreditSeminar The Rise of a Refined China: … The Rise of... · TNS-UniCredit Seminar :The...

TNS-UniCredit Seminar :The Rise of a Refined China© TNS 26th March, 2015

TNS-UniCredit Seminar The Rise of a Refined China: New Taste & Sensibilities

Trezelene Chan, Regional Client Leader, TNSSerene Wong, Global Account Director, WPP


As a nation unchallenged, unstoppable, absolute

2

https://www.youtube.com/watch?v=JsDY1Ha83M8

United as a country but NOT as one big market


A single country but a world in itself

1.4 billion people

4


Tier 1 and Tier 2 – Life is exciting and progressive

Generally optimistic and being spoiled by manufacturers

Advertising as a source of lifestyle aspiration

Brand as a symbol of social acceptance and esteem

5


Tier 3 and 4 – Life is improving fast

Quite contented about the improving life, particularly young people aspire to city life

Enjoy advertising, but sometimes alienated by certain edgy urbanized TV Ads; prefer clear, literal contents

Brand as a label of trust and guarantee

6


Rural areas/villages - Life is peaceful

Don’t really understand the urban lifestyle featured in certain advertising of global brands

Branded packaged goods not a must (loose pack)

Brand as a physical sign of the packaging

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Different regions, different noodles

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Distinct generations within each decade

9

Uniformity Self expression

Isolationist Implosion Glamour of the foreign

Search for a self-defined identity, on their own terms

Opening to the World


China has enduring, persistent characteristics + new, dynamic trends

� Collective (individualism)

� Hierarchy and authority is important

� Normative culture

� Face value

� Social struggle (inferiority complex)

10


Appeal of western culture (movies, design, and products) but is no longer blindly followed

Western is desirable = modern, advanced, creative, individuality

But, the symbolic dominance of Western cultural offerings has been waning for some time. The West dominated in the decades immediately following China’s opening up but the picture is more ambivalent today. Foreign brands need to do more.

11


From uniformity to individuality

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China is changing fast...

Becoming more complex, more sophisticated, more international


With a burgeoning middle class

13

30

40%

25

4

1

China

BoP (<2$)

Lower Middle (2-4$)

Middle Middle (4-10$)

Upper Middle (10-20$)

Top (20$+)

74

21

4

0,5 0,1

India

Distribution of Population based on PPP consumption per day


Discovering and learning in a connected world

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China’s internet is one mega shopping mall

2012

2013

2014

‘Daigou’ – overseas purchases included

15


Experiencing and learning through travel

17


Taking pride in the Chinese image at the global stage

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Recent resurgence of China pride

Chinese consumer nationalism

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Desirability changing from pure material accumulation to quality

“Middle Class is a Western concept. It contains mythical elements for many Chinese. For example, they think middle class Westerners all own homes, drive cars, and travel for vacations. In addition, Chinese believe middle class people should have good manners and a tasteful lifestyle” Helen Wang – The Chinese Dream

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Middle class/newly rich are ready to pay what it takes to acquire the manners that enhance their new status

Other courses offered by the school, located in the trendy Sanlitun district of Beijing, include how to raise children, proper table manners and luxury brand pronunciation.

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The Rise of a Refined Consumer The Chinese way


Refined

Having or showing the good education, polite manners, etc., that are expected in people who belong to a high social class

Synonyms

developed, evolved, forward, high, higher, improved, late, progressive, advanced

Antonyms

backward, low, lower, non-progressive, primitive, retarded, rude, rudimentary, undeveloped

Synonyms

Antonyms

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TNS-UniCredit Seminar :The Rise of a Refined China© TNS 26th March, 2015 24


A new relationship with food amongst China’s middle class

Food the easiest avenue for self-actualisationFrom a national past time from annual rituals to weekly (daily) treats

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Food as the easiest means to self-actualize ‘I eat therefore I am’

Food as status symbol

Food as inheritance Food as release

Ending up with bigger waistlines

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* TNS (2013), “I eat therefore I am” Michael Griffins and Chris McCarthy


Realized through more varied taste palettes, with also influenced by the Western diet

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Starbucks in China

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Four primary areas of occasion needs characterize China’s food and beverage market

MARKET & NEEDS OVERVIEW

Natural Energizer (8%)

Soothing Nutrition(7%)

Fortify to Avoid(12%)

Wholesome Balance(9%)

Multi-Sensory Enjoyment(8%)

Convenient Stimulators(7%)

Mental Release (7%)

Light & sensible refreshment(6%)

Fun anytime treats(11%)

Sweet Indulgence(5%)

Bold Statements(5%)

Anytime, Anywhere Munchies(9%)

Filling Fuel(5%)

Giving your body what it needs – not just healthy in general, but also offering specific health benefits.

Family health

These needs are centered on indulgence – each bringing it to life in a unique way.

Sweet treats

Uplifting products dominate this space, as consumers use food and beverages to change their state of mind.

Sensory mood lifts

This area is focused on satiation – whether it is a tide-me-over or more of a meal replacement.

Savory tummy fillers

What are occasion needs? Every occasion drives different needs and these differentiated needs are valued by many consumers in many occasionsWhy are they relevant? These are market demand centers all current offers compete to address and help guide product and strategy development.How are they calculated? Consumer need responses are cluster analyzed to create occasion need segments%’s reflect proportion of tested occasions falling each occasion need segment

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* TNS World of Food and Beverage China (2012)


And these open up convergence opportunities

MARKET & NEEDS OVERVIEW

Mind & body revitalization

Like-fresh made convenient fillers

Indulgent mojo

Connoisseur moments

+

+

+

+

=

=

=

=

+

What are convergence needs? A single product able to blend the capabilities of multiple, somewhat related … but different productsWhy are they relevant? They tend to represent nuanced differences from existing offers and provide the basis of market differentiationHow are they calculated? We statistically search for occasion need combinations which represent new product options not described by existing occasion need segments

A natural way to enhance how the body works while enhancing how you feel (mental revitalization)

This unique consumer wish is more breakthrough in nature, as it combines fresh and natural needs with high convenience and filling satisfaction.

This treat impacts nearly every aspect of your mood (lifts mood, soothes, refreshes, helps focus, makes you feel comfortable).

These indulgent, fun treats are not your everyday fare. Instead they are premium special moments that you want to savour.

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* TNS World of Food and Beverage China (2012)


Health is the new wealth

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Health products and messaging for the family important

Source: WARC, The market for health and nutrition in China vs. the USA and India

Primary reason for choosing healthy foods and beverages

China India United States

To meet the health needs of family members 46% 28% 15%

To ensure my future health 26% 37% 31%

To enhance my daily health 19% 9% 21%

Motivators For Choosing Healthy Foods & Beverages

46% 28% 15%

31%37%26%

9%19% 21%

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Weetabix in China

The Weetabix Food Company is launching a range of Alpen Cereal Bars, the first Weetabix products designed specifically for Chinese consumers. The range, which includes a Green Tea and Chocolate flavoured Alpen Bar

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Food for thought

� Adapting and evolving Western definition to Chinese taste buds and cultural context

� Crafting brand propositions that can satisfy the emotional needs at the same time as tantalising tastebuds

� Health promises within food but also perhaps in healthcare

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Luxury features worth the premium

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10 20 30 40 50 60 70 80 90 1000

(Top 2 box %)

89% High quality and durability

81% Exclusivity, uniqueness

81% Service

74% Popular and famous

74% Very fashionable

79% Long heritage

53% Country of Origin

73% Green & CRS

46% Spokes person

Source: A12. Please indicate to what extent you would be willing to pay a premium for that quality or buy luxury products? 1-5 point scale. (T2B)Base: All respondents

(88%)

(X) 2012 data

(80%)

(80%)

(72%)

(68%)

(69%)

(67%)

(39%)

(31%)

* TNS KPMG Luxury study China (2015)


Savvy Chinese consumers buying overseas

Why did you purchase luxury goods overseas?

73

57

56

55

45

13

Warranty of genuineness

Wider product range

Better price

Better shopping experience

Latest design

Gaining face when mentioning it to others

Source KPMG TNS 2015 Luxury study

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Graduating from Bling to Connoisseurship & Individuality in Luxury consumption

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Mixed fortunes for luxury brands as China’s taste changes

Impacted by change of taste and anti-corruption crackdown

Fighting Challenges Capitalising Opportunies

Absence of ‘logo’ and ‘bling’

Chinese heritage

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SPA/Beauty treatment

Expensive meal

Luxury hotel/resort (outside of the city)

Luxury hotel/resort (within the city)

Oversea travel

Gym / Yoga menbership

Luxury watches

Expensive wine

Antique or special

furniture

Art, calligraphy

0

40

80

120

160

200

0 20 40 60 80 100

Gro

wth

po

ten

tial

Relative penetration

Uniquely designed jewelry

Experiential luxury activity

Connoisseurship activity

Experiential and Connoisseurship growing fast

relative penetration = penetration of activities (e.g. oversea travel) / penetration of total category (e.g. experiential luxury) growth potential = future interest / current penetration

Source: X axis - C1. Have you engaged in below consumption in the past 12 months? [MA]; D1. Which of the following did you engage in collection?. [MA] Y axis - C4. Among below activities, which one do you plan to have in the future 12 months? [MA]; D3. Among below categories which one are you likely to engage in collection in luxury in the future? [MA]Base: All respondents

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Strong sense of country of origin by category

Mainland China

Hong Kong

France UKSwitzer-

landUS Japan Italy Germany Spain

Clothing 8 6 41 8 2 9 1 21 2 1

Bag 5 4 41 10 5 8 1 20 6 1

Footwear 7 4 28 12 3 12 1 27 4 2

Watch 4 2 5 4 77 1 1 1 4 0

Jewelry 11 15 32 10 11 7 0 9 3 1

Cosmetics

/Perfume5 4 69 6 2 6 3 3 2 0

Alcohol 25 2 42 12 3 5 1 5 4 2

Automobile 5 1 5 9 3 9 2 7 59 0

SPA/Beauty Treatment

13 14 33 6 5 7 17 2 2 1

Hotel/Resort 16 10 17 13 9 22 5 4 2 2

Restaurant 35 8 25 7 4 5 4 8 2 2

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Source: A7. Among those luxury categories, which country of origin do you aspire to own most in each category? [SA]Base: Brand awarer

(33)

(19)

(21)

(31)

(22)

(25)

(62)

(33)

(23)

(69)

(8) (15)

(X) 2012 dataTop associated category across coutries (>30%)

Middle associated category across countries(10% - 30%)



New social idealisms

� Empathy with strangers / non-intimate others.

� “Enlightened” rule-of-law campaigning.

� CSR & environmentalism

� Movements towards political participation: demos.

These trends can also be viewed as expressions of the emergence of a post-materialist society.*

* Griffiths (2012), “Consumers and Individual in China: Standing out, Fitting in”

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Luxe thoughts

� Give it a story …use authenticity, heritage, provenance and uniqueness as your key ingredients

� Give it an ethos … allow consumers the opportunity to do and feel good through their purchase

� Give it ‘Chineseness’… pay homage to Chinese cultural values

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Heroic masculinityyingxiong 英雄haohan 好汉

武

文The ‘gifted scholar’

caizi 才子wenren 文人

Ideal Chinese men to have a balance of 文 and 武

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The modern ‘male god’ (Li Jian)

Well-balanced internally and externally

Sensitive, romantic, attentive, strong,

responsibility, intelligent, witty

Well-groomed, Modern (possibly

influenced by West), refined taste

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Culture / Modernity: The most dominant space in male grooming communications

Industrial

Hygiene / Clinical / Sterlised

Realism

White collar

Science

MODERNITY

CULTURE

MODERN URBAN CENTRE

Classic

Technology

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More widely, we see an emergence of a young generation that is more individualistic, creative and free. “Living for Passion”

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Has Old Navy got a future in China?

Debuted in 2014 with a pure American outlook

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Success in China

hinges on companies’ ability to

understand its complexity and ensuring your brand has the right

cultural context

China a land of opportunity

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For further info, please contact:

Gabriella BergaglioMarketing Manager TNS ItaliaCell. +39.334.60.91.720@:[email protected]

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