Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcasts
  • About Us
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Cold Call Podcast
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    • COVID-19 Business Impact Center
      COVID-19 Business Impact Center
      The Basics of Consumer Marketing in Asia
      03 Mar 2003Research & Ideas

      The Basics of Consumer Marketing in Asia

      by Julie Jette
      Confronting a per-capita income in China that varies from as low as $380 to as high as $5,000, brands face a special challenge gaining headway. At this panel, experts discussed the secrets of price competition and market research. Said one, "Our best tools are our two legs."
      LinkedIn
      Email

      Consumer product makers looking to sell in Asia cannot expect the relative homogeneity they find in the U.S. or European countries, according to the panelists at the "Consumer Marketing in Asia" panel at the HBS Asia Business Conference.

      In China alone, said panelist Soo-Se Chen, a professor of international business at the Ming Hsin University of Science and Technology in Taiwan, per-capita income varies from $380 to $5,000 annually in different regions.

      "You have to realize that China is very, very heterogeneous," he said. Failure to understand that "is why a lot of companies failed in China in the mid-1990s." Chen, who worked with QianJiang Motorcycle among many other companies, pointed out that of the five top-selling motorcycle brands in China in 1997, only two remained in the top five in 2002, just five years later.

      Nobody thought Japanese consumerswould buy anything on the Internet.
      — Hiroshi Mikitani
      of Rakuten

      Brands also tend to be highly localized. "You may find one brand very popular in Beijing and not be able to find it in Guangzhou at all," he said.

      Rob Westerhof is currently CEO for Philips in North America, but from 1998 to 2002 he was CEO of Philips China, Hong Kong, and Taiwan. He pointed to Unilever's early experience in China as a cautionary tale. Unilever had done well selling high-end soap products elsewhere, but in China it had a difficult time convincing customers to pay more. It had to relaunch at a lower price point and slowly build up interest in its brand. China is Philips' biggest Asian market, and it has the advantage of good relationships with high-ranking government officials thanks in part to a history with the country that dates back to the early 1980s.

      "We were the first company that was allowed to have a color television joint venture in China," he said.

      Hiroshi Mikitani, CEO of Japanese e-commerce Web site Rakuten, said companies should do their research, but not be afraid to challenge the conventional wisdom.

      "Nobody thought Japanese consumers would buy anything on the Internet," when he and his partner launched Rakuten in 1997, Mikitani (HBS MBA '93) said. The 9,331 merchants who do a brisk business over the Rakuten site, which Mikitani describes as a cross between eBay and Amazon, are now proving them wrong.

      Brand Territories

      Panel moderator Luc R. Wathieu, assistant professor at HBS, asked the panelists if it was true that price competition is still the major way Chinese consumers differentiate brands from one another.

      "We see a little bit of a shift away from price competition," Westerhof said. "Brands and trends are getting very, very important."

      Duan Yongping, the founder, Chairman and CEO of BBK Electronics Corp., a Chinese company that manufactures consumer electronics, also said that Chinese consumers are becoming more concerned about quality and are willing to pay for it.

      "Most popular products in the Chinese market are very exquisite in design and consumers also have very high expectations of the [look] and materials," he said. And companies must be fleet of foot to keep up with changing consumer demands. Duan said that since 2000, the updating cycle for DVD products in China has been less than three months, while the lifespan for other product models is a maximum of six months.

      "This makes it very important for the company to have highly efficient internal management and sales mechanisms to survive," he said. BBK's DVDs are also top-sellers in Hong Kong and China, Duan said.

      One member of the audience asked Duan how companies obtain market research about Chinese consumers. Not easily, as it turns out.

      "Our best tools are our two legs," he said, because there are few companies dedicated to performing market research for clients. He also said about one percent of purchasers of BBK's products return questionnaires, enabling the company to collect some data.

      Mikitani said that in Japan, he and his partner probably visited 1,000 stores to get ten to sign up to use his site. Marketing to consumers also took perseverance.

      "On day one, nobody knew about us. You need media coverage and nobody wanted to write about Internet shopping," he said. He advised would-be entrepreneurs to work on developing a compelling story about their company that will appeal to the media.

      "It's very important to combine marketing and PR," he said.

        Trending
          • 25 Feb 2019
          • Research & Ideas

          How Gender Stereotypes Kill a Woman’s Self-Confidence

          • 17 May 2017
          • Research & Ideas

          Minorities Who 'Whiten' Job Resumes Get More Interviews

          • 24 Feb 2021
          • Lessons from the Classroom

          What History's Biggest Wars Teach Us About Leading in Peace

          • 17 Feb 2021
          • Research & Ideas

          Pandemic Self-Care for CEOs: Rituals, Running, and Cognitive Restructuring

          • 22 Feb 2021
          • Book

          Reaching Today's Omnichannel Customer Takes a New Sales Strategy

      Find Related Articles
      • Demand and Consumers
      • Asia

      Sign up for our weekly newsletter

      Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
      ǁ
      Campus Map
      Harvard Business School Working Knowledge
      Baker Library | Bloomberg Center
      Soldiers Field
      Boston, MA 02163
      Email: Editor-in-Chief
      →Map & Directions
      →More Contact Information
      • Make a Gift
      • Site Map
      • Jobs
      • Harvard University
      • Trademarks
      • Policies
      • Digital Accessibility
      Copyright © President & Fellows of Harvard College