The Great Wall has been described as a potent Chinese cultural icon that represents both the unification of China as well as its separation, as a nation, from the rest of the world.* This massive example of ancient Chinese architecture exemplifies the collective effort made by Chinese people from different areas and dynasties to preserve their cultural heritage and prevent invasion from other states. Just as the Great Wall reflects both arduous labour and exquisite planning and construction, China is as compelling as it is complex as a market to decipher, especially for most people outside of the region.
China is currently the world’s second largest economy after the US and is increasingly playing a very important and influential role in the global economy. It is not surprising, then, to see that its research market has also grown—according to ESOMAR’s 2015 industry report—to become the fifth largest globally, with a turnover of US$1.7bn. Looking at China’s population numbers (where its consumer class is slightly larger than the entire population of the US), we can also easily see why there is so much interest in understanding this Asian giant.
To learn more about China’s unique culture and diverse market, Eric Gu, SSI Country Manager of China, talks about the key trends impacting research growth, as well as some practical guidelines for planning research in China.
What are the important things to keep in mind when sampling in China?
China is the most populous country in the world; it has a population just shy of 1.4 billion people. However, almost half of these people live in remote rural areas in relative poverty and can hardly be considered members of the “consumer economy”. Real potential consumers, those with higher incomes and purchasing power, live in urban areas. This, then, is the more appropriate segment for most producers of commercial products and services to target. Therefore “nat rep” has a very different meaning in China.
When thinking about the sampling methods to use for a study in China, it is important for researchers to carefully consider not only the real target population but also the practicalities of using each methodology. For instance, given the vast distances involved and the difficulties of travelling, personal interviews tend to be conducted in the major cities. A lack of infrastructure and the relatively high cost of obtaining a service also mean that telephone surveys have been concentrated in the major cities, where the telephone-owning population resides. The online population is rapidly growing but is still only around half of China’s population, and generally skewed towards certain demographics such as younger, more educated, and higher-income groups. In the urban areas, penetration is a much more representative 75% or so. Sampling, then, tends to concentrate in the higher-tier cities.
Can you give an insight into how to define the tier system in China?
Actually, there is no official or formal definition of China’s tier system. Historically, the exceptional economic roles of a number of cities in China triggered a classification system based on tiers. The objective was to rank China’s cities, and this was to be used as a reference by foreign investors. This was necessary since China has at least 140 cities that have a population of more than one million people, and 14 with more than ten million people! The tier classification is generally accepted to be highly correlated with the income value of the cities. For instance, people living in Tier 1 cities have income levels well in excess of the national average. Beijing, Shanghai, and Guangzhou are usually classified as Tier 1 cities, representing China’s most developed markets in terms of consumer behaviour. While Tier 2 cities are less developed markets, they show rapid growth. Fixing samples per tier city over time is therefore difficult—they change as the economy grows.
What are the things we need to keep in mind when designing and fielding questionnaires in China?
Before designing the questionnaire, it is advisable to do desk research to understand the brands in each category in China. The reason for this is that the Chinese tend to answer questions based on their aspiration towards certain categories, or brands within categories. Based on our internal research, Chinese respondents, for cultural reasons, also avoid using non-substantive answers (even including “other”) in favour of the actual brands listed. Therefore we recommend using a full brand list rather than a truncated brand list. Asking questions about category or brand desirability also helps to understand potential levels of over-claim within the category.
What else do we need to keep in mind when doing online surveys in China?
If your client wants to understand local Chinese consumers, they need to communicate in a local manner in both spoken and written language. Simplified Chinese is used in mainland China and almost all existing brands are written in Chinese characters. This includes well-known foreign brands like Coca-Cola, for example.
Therefore, extra care and time must be taken to translate foreign concepts, activities, or categories, particularly those that are not well known in China. Lastly, the Chinese government has a very strong influence in many areas across the country, including freedom of the press and religion, and so topics related to politics, government policies, and some beliefs or religions are considered sensitive if not forbidden in China.
Written by Eric Gu & Jennifer Serrano, SSI