Reflections on China and india

Chinese consumers’ tight fists

2009-12-28T03:27:00Z

The magic eight

Eight is a lucky number in China. The opening ceremony of Beijing Olympics commenced on the eighth day of the eighth month of 2008 at 8.08.08 pm. The car number plates with a few eights go for thousands of dollars in auctions and the consumer will willingly cough up a significant premium to acquire a mobile phone number which is festooned with a couple of eights.

Eight is also the percentage by which, the economists believe, the Chinese economy must grow to provide jobs to the millions of students graduating from Universities, or the rural folks migrating to the cities in search of a better life. The first two quarters of this year have been difficult – China could only muster up a 6.1% GDP growth in Q1 of 2009 and just missed the magic mark of eight in Q2 with a 7.95 growth. However the Q3 figures came at 8.9% and the whole of China heaved a collective sigh of relief that the growth of 8% will be achievable this year.

Clearly the magic has been achieved with a lot of stimulus - Chinese government is trying to spend four trillion yuan in stimulating the economy. Money is being poured into building roads, bridges and some income generating activities. In the first nine months of the GDP growth of 7.7 percent, 7.3 percent came from investment and 4 percentage points from consumption (decease in exports brought down the total figure to 7.7%). Exports continue to decline, though as the mood in the US brightens a little, the rate of decline has come down. Economists predict that the exports may actually start growing next year – but are unlikely to touch the 2007 levels in the near future as the American consumer may never reach back the frenzied shopping that they exhibited to the delight and the economic growth of the whole world.

Consumer

Economist say (softly in China and more shrilly in the West) that the Chinese consumer must spend more to compensate for the loss of exports and redress the global imbalance where the American consumers were sustaining the global economy with their profligate consumption of Chinese goods and the Chinese Consumers saving as much as one-fourth of their incomes. Hence the critical question now is whether the Chinese consumer will spend more and save the global economy.

The traditional reason that is given for the Chinese consumer to save a large proportion of their income is that a large number of them do not enjoy social security and need to set aside for their retirement and possible medical expenses. Secondly, culturally Chinese are considered to be thrifty and saving rather than consumption is considered a virtue. While these factors – whether cultural or structural – do contribute to the Chinese households stashing away a large proportion of their income there are other social and emotional reasons for this behaviour.

The other barriers to consumption

Owning an house ranks among the most important desires and goals for a Chinese. The idea of living in rented accommodation is alien and unacceptable. Traditionally Chinese have liked the idea of stability and state provided that by allotting life long accommodation, which you keep even after retirement. With state housing gone for most, the Chinese are rushing to buy apartments. The strong demand coupled with a relatively controlled supply has made the cost of housing disproportionate to the consumers’ income. Today the average per capita annual urban disposable income in Shanghai will buy two square meters of an apartment. Additionally Chinese need to cough up 30% of the price as down payment.

On the other hand social norms today make the idea of continuing to live with the parents after marriage as nearly inconceivable (no pun intended) and no self-respecting woman will accept a man’s hand in marriage unless the hand holds the keys to an apartment. With low starting salaries even for University graduates, parents need to bear the burden of saving for the down payment. The high mortgage payments in relation to the income further reduces the spending ability of the consumers.

Secondly, while impending marriage of the child brings a substantial financial burden for the family, the university education before that is also a formidable expense. As China moves towards becoming a market economy, the cost of education has been increasing steadily. Today for an average family the cost of providing a university education may take up as much as one-third to half the disposable income of the family. Even school education costs are going up as more Chinese consider the idea of sending their child to an expensive private school.

Thirdly the average Chinese consumer is value driven. Products receive a microscopic scrutiny and intensive comparison and valuation. Prices are compared thoroughly and promotions and deals welcomed enthusiastically. While there is a trend of premiumisation, it is not universal and applies more to products of visible consumption which can make the consumer look good and successful. Additionally the disappointment that many consumers faced, when the salary increases and bonuses were less than generous in the beginning of the year or the business growth challenged, has thrown a spanner on the path of moving to premium products.

Hence while the Chinese consumer will gradually spend more, and consumption as a proportion of the Chinese GDP will move up from its uniquely low level today, the movement is going to be gradual unless significant changes are made to make housing and education more accessible and affordable and the consumer regains the confidence of continued prosperity.

Written by Ashok Sethi, TNS China

ashok.set@gmail.com

ashok.sethi@tns-global.com

A Shoe for a Shoe

2009-11-03T11:08:00Z

Jail term for a pioneer

Wiser counsel seems to have prevailed. Muntadhar al-Zeidi, condemned for three years in Iraqi jail for throwing shoes at George Bush is out in six months They pronounced a three years sentence for a brave visionary who tried to change the world through innovative thinking! If we need to put Al-Zeidi, the Iraqi hero for flinging his shoes at George Bush behind bars, why not put all the marketing gurus and most of all Philip Kotler in jail, whose text book of marketing management clearly describes the marketing strategies of market expansion and product extension.

Saviour of soles

The shoe factories in Guangdong province of China were reeling under the impact of financial crisis. The anguished migrant workers losing their jobs and dreading the prospect of being reunited with their families in their rural abodes were desperate. “Stimulate domestic demand as a substitute for exports” cried out the venerable economists, eager to give advice and bring succor to the lives of the affected poor in export reliant countries. But can even the 1.3 billion Chinese consumers match the demand created by Americans, who on an average used to buy 30 pairs of shoes in a year!

It was a remarkable demonstration of the innovative thinking that the Guangdong Shoe Export Association hired Al-Zeidy to throw a pair of shoes at George Bush and demonstrate a new use for the product to boost its sagging demand. Imagine, if people started throwing shoes as well as wearing them? With millions of appropriate and deserving targets and billions of potential throwers, the factories can open their gates again and the workers can get back to the task of stitching the uppers to the soles. The Chinese government’s buy-in and support was secured, and the Prime Minister Wen Jia Bao himself volunteered to be the spokesman and a target for shoes in Cambridge University earlier this year.

A whole new world

Special shoes will be designed for bankers, made from sub-prime materials and leveraged at the heels. The politicians will get thick leather shoes to match the thickness of their own hides. The insurance companies will get shoes, the risk of wearing which will match the risk profile of the assets that they insured. We could even get rating agencies to rate the shoe in terms of aerodynamics, the speed and distance to which it can travel, and how much it will hurt when it will hurt the target.

The market could be segmented both by the thrower and the throwee – stilettos for the highbrow, the humble canvas shoe for the amateur, sneakers for the nimble, athletic types and budget shoes for those on a shoe-string. Shoes could be color coordinated for maximum impact – black shoes for Obama, white for Bush, brown for Manmohan Singh and yellow for Wen Jiabao.

Shoe for a shoe

The mind boggles at the opportunity, if the principle of “a tooth for a tooth and a nail for a nail” could be extended to “a shoe for a shoe”. The great leaders and the eminent public speakers, would then come to the meetings equipped with their own set of shoes, to fling them back at any miscreant who dares to throw one at them. Imagine public meetings, in which shoes are flying like rockets in each direction and every swing contributing to the rescue of shoe industry in Southern China, and ultimately to the rejuvenation of the global economy.

“Let me make it very clear,” president Obama said. “White House will not abandon the view that a shoe is a wearable accessory, whose primary role is protection and adornment of the feet. However, if it can find additional utility as a saviour of the global economy, I am sure Secretary Geitner will welcome it with open arms.”

In Dongguan in Guangdong province of China, as the shoe factory worker Lian Ping uses his chopsticks to voraciously swirl multiple strands of noodles from his bowl to his mouth, he can be rest assured that his next bowl of noodles or rice is not imperiled by the lack of demand of shoes in the world. He has to thank Al-Zeidy for this - who would not have spent six months in jail for nothing – he would have saved our soles.

Written by Ashok Sethi

Ashok.set@gmail.com

What the current environment means for fine tuning marketing strategies in China

2009-10-09T08:54:00Z

There is no time in China like today. On one side it is buffeted by the tsunami of global economic crisis, on the other side its consumer base is rapidly increasing in size and value. How can marketers make the best of this unique juncture in time and deploy the most effective strategies for establishing a firm position in China.

Presented below ten strategies that the marketers can consider to thrive in these times.

1. New strategies for new times

The changed economic conditions is affecting consumer behaviour and attitudes. Can the marketing strategies based on the understanding of the consumers in the prosperous times still hold water now. Consumers are changing their behaviour in several different ways and various underlying attitudes and values govern these changes. It is critical for us to re-look at the consumer and refresh our understanding to fine tune the marketing strategies.

2. Segment and decide

Not all the consumers react to the environmental changes in the same way. Different consumers have different reactions to the financial challenge – ranging from an extreme tightening of the purse-strings, to a nonchalant continuation of the current indulgences. Tightening may be reflected in different tangible and psychological ways. Manufacturers also need to offer a range of different solutions and propositions to meet these changes in behavior.

Additionally, different consumer segments may be affected to different extent – and growth may vary from segment to segment. In luxury goods, for example, connoisseurship and indulgence segments may grow more as compared to the pure status segment, as these consumers’ relationship with luxury segments is not only emotional but also very tangible.

3. Find new pastures

In these times, growth may be easier to come about through geographical expansion, than competitive fight in the current markets. The impact of the slowdown is more pronounced in larger cities – though the smaller towns and villages are also affected if they relied on export based industries. Hence while growth may be challenged in the larger cities, it may be a good time to set forth and explore new markets in county towns, townships and villages. These are the markets which are growing at a faster pace and offer greater return for investments.

4. Emphasize value – re look at your brand portfolio

It does not take rocket science to conclude that in these times the consumers will look for value. The challenge is to offer value without compromising the image. There are different strategies to deliver value – some are appropriate and some ill-advised – some will damage the brand equity permanently, some will keep the image intact but still help adjust to the times. Research shows that direct price reductions are likely to damage more than temporary discounts, and decreasing pack sizes more harmful that increasing pack size at the same price.

5. Look at your distribution channels

A strained economic situation not only changes the consumer, but also changes the shopper. Consumers are normally more attached to the brand than the retail store, hence their first choice is not to change the brand, but try to locate the same brand at a cheaper price at another store.

With more time at hand and greater incentive to economize, more consumers are likely to shop at hyper markets than the more ubiquitous but pricier supermarkets and convenience stores. The search for value and bargains will also turn the shoppers to internet shopping–the only channel that will grow even faster than hypermarkets

6. Help the consumer – teach her, train her, comfort and reassure her

Research indicates that Chinese consumers’ response to the economic challenge is cerebral. When opportunities are fewer and the competition more fierce the Chinese consumers will want to further enhance their skills and knowledge. Clearly it is very good news for companies teaching English or computer programming. But the opportunity is not confined to these firms – the FMCG industry could also take a more educative communication stance - wine makers could try to educate the consumers about appreciating fine wines, cosmetic companies could offer lessons on skin care and food companies could coach on diet and nutrition.

7. Family, home and security

When the going gets tough, the consumers tend to take comfort at home and in the arms of the loved ones. Recession is the ideal time to catch up with friends, take the children to the park and visit the parents, and in the process enjoy emotional warmth to compensate for the coldness of the economic climate. The children are likely to pay a heavy price for this, with parents having more time and inclination as well as a renewed determination to help their children with their studies. This offers opportunities to promote in-home consumption, rather than out of home consumption – which in many categories such as alcohol, is much more expensive.

8. Communication

It is not just the product but also the message which needs to reflect the current consumer mind. The communication messages of today needs to reflect sentiments of care and protection, rational and considered behaviour and performance and value These tones of communication, which always appealed to the Chinese consumers, are likely to find even greater resonance in these times.

9.. Go digital

For the largest internet population in the world, internet has so far been a tool of entertainment and information – less so a tool for commerce. However the initial barriers are being overcome and consumers are discovering the joys of internet shopping. The attributes consumer associate with internet shopping are variety, enables detailed evaluation and comparisons and competitive prices. These are the attributes the consumer will be looking in the times of economic slowdown.

10, Keep a permanent hand on the pulse of the consumer

These are dynamic times. Things are changing at a phenomenal pace. As a result, so is the consumer mood and sentiment, which will have an effect on her decision making and the brands and products that she buys. If marketers don’t feel her pulse all the time, they could go wrong. One can not just listen to the consumer once a year - marketers need to put their ears firmly on the ground and listen to every change of beat, every nuance of the consumer mood and continue to fine tune the strategy.,

Published in South China Morning Post, July 27, 2009

Written by Ashok Sethi, TNS China

Ten Consumer Behaviors and Trends to Watch During Economic Slowdown

2009-10-09T08:50:00Z

The consumer mood today

Marketing pundits believe that condoms, DVDs, lipstick and junk food are likely to gain prominence during economic slowdown. Will the Chinese consumers’ behavior be similar in these times of strain? TNS China conducted a study in urban China to validate or explode these hypotheses and myths and we present here the key changes that we can expect in consumer behavior in these difficult times in urban China.

On the whole, the urban Chinese consumer is facing the crisis with stoic optimism. Half the consumers feel that despite the downturn their incomes in 2009 will actually increase in comparison to 2008. 31% expect to retain the 2008 income level and only 19% expect a decline. The optimism is based on the fact that most consumers feel that their lives will only be slightly singed by the fury of the global economic meltdown. However on the whole the year 2009 for the Chinese consumer will be a time for reflection and an opportunity to seek a balance in life – balance between work and play, friends and family, saving and spending, excitement and peace – in their quest to seek a better quality of life.

1. Health is wealth

When the wise man propounded that “health is wealth” he possibly did not expect that we may one day have a time when health is the only wealth that people possess. In a situation you can do little about the economic health, it becomes even more important to preserve the physical health. While gyms should still have their treadmills rolling strong as enthusiasts try to match their body weight graph with the stock market trend, most consumers will adopt the natural and free exercise of walking and jogging in their quest for healthier and slimmer bodies.

2. Goodbye luxury

“It has been said that man is a rational animal. All my life I have been searching for evidence which could support this,” said Bertrand Russell. He would possibly be pleased with the consumer desire to rationalize their spending and cut down on luxury goods in 2009. Consumers say that they plan to spend less on jewelry, bags and watches in 2009 as compared to 2008. The luxury goods manufacturers who were expecting China’s appetite for luxury to make it the largest market in the world, would need to wait till the economy turns around.

3. More skin-care and colors

Beauty may just be skin deep, and the recession is deeper. But the Chinese consumers still feel that a glowing skin and luminous lips could act as a shield against the pain of the economic crisis. Need to look good is never more pronounced than when the times are tough. A heady feeling from a positive reflection in the mirror and admiring glances from friends and colleagues could almost match and even compensate for the lightness of the wallet.

4. Skill enhancement and training

American consumers may have over mortgaged their houses, but the Chinese consumers will never mortgage their future. Learning has always been seen in China as a ladder of success. Dealing with difficult times calls for enhanced skills and capabilities. What could be a better time to invest in self enhancement than when employment is scarce, the salaries are low and the work load light. English language courses, already a booming business will get a further fillip. Consumers will try to teach themselves software, web page designing, and even belly dancing to enhance their chances for fruitful employment and a healthy pay check.

5. Digital world

With nearly 300 million internet users (the largest in the world) China was already hurtling towards a digital age. The rapid adoption of the digital media, of course, precedes the recession. Internet is where the Chinese go to look for a better job, download free movies and songs and just engage in incessant chatter with friends. In times like these, they expect to rely on the net even more to search for a better job, complain about their poorly paid jobs in their blogs and upload videos for their temporary leisurely existence. We believe the recession will further enhance the role of internet in the consumer lives in China. The availability of relatively inexpensive 3G mobile services will definitely also facilitate greater adoption and usage.

6. Home sweet home

The joy of family life will be further enhanced and family relationships will be even more delicious with the flavors of home cooking wafting from the kitchen. Chinese consumers plan to cook more at home in 2009 than they managed in 2008. The competition to home cooking comes from cheap fast food restaurants and road side stalls – both of whom are likely to lose business from this segment in 2009. However, the overall business of McDonald’s, KFC and Nan Xiang Xiao Long dumpling chain store may still see an increase in 2009, as consumers also down trade from more expensive restaurants.

If you need to spend more time at home, it also makes sense to vacuum the floor and tidy up the place, Chinese homes are going to look much more neater in 2009 and the lower toil demanded by the workplace may be substituted by efforts at home.

7. Shop wisely

While shopping at hypermarkets has its attractions, it does call for time at hand, With more time and greater incentive to economize, more consumers are likely to shop at hyper markets than the more ubiquitous but pricier supermarkets and convenience stores. The search for value and bargains will also turn the shoppers to internet shopping – the only channel that will grow even faster than hypermarkets.

8. In-home entertainment in, out-of-home entertainment out

When the slow speed of the internet connection makes downloading a movie difficult, we in China have the option of spending a dollar to buy the pirated DVD. If we did want to make an evening out of it, with popcorn and all, we would spend thirty dollars for two tickets in one of the many multiplex cinemas. While conventional wisdom suggests many alternative uses for the thirty dollars (including putting under the mat for a rainy day) the consumers are unwilling to give up this pleasure. Cinema ticket sales are likely to remain high, as long as the movie industry can come up with compelling attractions to help the consumers with a few hours of blissful escape from the harsh reality.

Bars and karaoke flourish in economic booms, when clients are entertained and deals are made on favorable terms with suitably mellowed potential business associates. Not unexpectedly the recession will mean that entrepreneurs and managers do not have to listen to potential business partners sing out of tune, in the hope of securing a juicy contract. Less cognac will be poured (sale of beer and other cheap alcohol consumed at home or low priced eateries is unlikely to be affected).

9. Social harmony of a kind

Absorbed in the relentless wheels of economic activity, the Chinese consumer has been accumulating a feeling of guilt for neglecting the immediate as well as the broader family. Recession is the ideal time to catch up with friends, take the children to the park and visit your parents, and in the process enjoy emotional warmth to compensate for the coldness of the economic climate. The children are likely to pay a heavy price for this, with parents having more time and inclination as well as a renewed determination to help their children with their studies.

10. Sex and Love

Chinese consumers do not really plan to change their sexual habits during the recession. However with a strong intention to spend more time with spouse or partner, the consequences can not be predicted!

Some consumers, however, may be forced to give up expensive mistresses, particularly if they continue to demand luxury jewelry and handbags. The demand of condoms, may go up slightly as couples decide to postpone having a child till after the recession. Though as a counter trend, some women are said to be rushing to have a “financial crisis baby” as the law prevents the employers from laying off pregnant women and nursing mothers!

The Shanghai Adult Toys and Reproductive Health Exhibition attracted 20% less exhibitors this year. Is it that the industry which specializes in providing stimulation, is itself in need of a stimulus package! These are hard times indeed!

Written by Ashok Sethi, TNS China

The most important consumer insight from China

2009-10-09T08:48:00Z

China’s most important insight

Gaining consumer insights is critical for marketers to design optimal strategies for the large and complex market of China. Of course, there are many insights we can share about the Chinese consumers – their peculiarities, idiosyncrasies as well as common values and guiding principles that they often shares with consumers in the rest of the world. Each of these would be a relevant insight and could serve as a good input to the development of marketing strategy for China.

However, in this article, I want to talk about just one insight – an insight which I feel is really the most important insight about China. An insight which is enduring and universally applicable. And that insight is:

"There is no universally applicable and enduring insight about China."

Now I know some of you may want to contend this – but think about this - if you disagree – you just prove my point – as this insight that I am giving you is also not universal. Of course when I say this, I am exaggerating a bit, but there are two reasons why I exaggerate and there are two points that I would like to make.

Firstly, given the size and complexity of China, Newton’s law of Consumer trends applies to China. For every consumer trend that you see, there is an opposite, though not necessarily an equal trend. Hence, if I tell you that Chinese consumers are becoming more health conscious – and that is absolutely a valid trend, I also need to tell you that junk food restaurants have been growing in the country at a phenomenal rate. Obviously, they are catering to two different segments of the market – both of which are growing. Or at times it could even apply to the same consumers – who display different behaviour at different occasions or situations.

Similarly If I mention that for the market for luxury goods is expanding, and consumers are willing to pay a premium for better quality, there is also a phenomenon that consumers down trade for products which do not have social or image connotations. And hence we also see that private labels, though still small in China, are also growing significantly.

Or if we say that the Chinese consumer is getting westernized – in terms of adoption of Western food (at least junk food), or customs, (e.g. Christmas and Valentine’s day are celebrated with great gusto in China) at the same time I need to point out that there is a resurgence of interest in traditional culture, studying Confucius philosophy and Chinese art and design. Even if you take a very broad trend such as urbanization – and it is said that 10-15 million Chinese are urbanized every year, this year there is a reverse trend of sort as 20 million migrant workers return to their villages as they can’t find a job in the cities.

I think from a marketing point of view this fact has significant implications. As it means that if your opportunities and threats may not be just determined by the obvious trend but also by the counter trend.

Secondly, China is a market of explosive change. For example in the past 5 years, sales of luxury goods have tripled, sales of luxury automobiles have risen five fold. But it is not just luxury products - the sales of passenger cars have grown 2.5 times. The number of internet users has tripled to 300 million to make it the world’s largest internet population. Even if you look at consumer goods – the fabric softener market has more than doubled in the past 5 years. Since I came to Shanghai a little over 6 years ago, the average salary of a Shanghainese has more than doubled and in my company it has tripled (I wish the same was true for me!)– as we pay well to attract the best.

If this is the pace of change that is happening in the market, and the marketing landscape is changing so rapidly, the insights that we discover may not be very enduring and hence for marketers, it is necessary to keep a permanent hand on the consumer pulse – once in 4 or 5 years usage and attitude research studies will not do.

Written by: Ashok Sethi, TNS China

Country road, (don’t) take me home

2009-10-09T08:44:00Z

The reluctant march home

Twenty million migrant workers from the Chinese countryside, who have lost their jobs in the aftermath of the global financial crisis, do not wish to go home. Driven by the export boom, nearly 130 million rural Chinese had left their farms to toil in urban workshops and construction sites, sending money home to supplement the meager agricultural income. Unfortunately last year the Wall Street brought down the Main Street, which in turn resulted in the closure of factories in China which churned out products enjoyed by American consumers with borrowed money. Last month the Chinese government revealed that 20 million of these workers have lost their jobs and will possibly need to return to their rural homes.

The workers do not want to go home as their income from tilling their small farms is woefully inadequate to provide them with a comfortable existence and even a modicum of savings and security. The per capita rural income in 2007 was less than one third of what the urban Chinese enjoyed. Despite the harsh conditions of work and stay in the cities and the emotional pain of living separately from their loved ones, they willingly accepted this existence to be able to provide their families with a better quality of life.

The official deliberations

Not surprisingly, the welfare of these migrant workers and the economy in general was salient in the deliberations of China’s top legislative body (National People’s Congress or the NPC ) and the top advisory group (CPPCC) which meet every year in Beijing around this time. As can be expected in China, scale is important and the meetings are held with great pomp and ceremony. The sheer size is staggering – NPC has nearly 3000 deputies, and the CPPCC National Committee has 2,235 members. Unlike the House of Lords in UK and the Rajya Sabha in India, attendance is high even in the advisory body and members are expected to remain awake during the proceedings. The publicly released pictures of the meetings show the members in a state of significant alertness, despite sometimes soporific speeches of fellow members and leaders. Previous meetings have debated, modified and adopted other important issues such as the Labor Contract Law and the Property Law. Discussion on China’s economy has always been prominent, but the tone in the past has been congratulatory and exuding pride. Economic achievement offered much fuel for pride in the past (in the 2008 meeting of the NPC the Chinese Premier Wen Jia Bao had proudly declared that China's economy grew by 65.5 percent over the past five years, or an average annual increase of 10.6 percent)

Not only is the agenda this year single-mindedly focusing on economic development, for the first time this year, in recognition of the need of the hour of judicious spending, the agenda of the meeting itself has been trimmed to 10 days from the usual 14 days. The euphoria of a decade long galloping economy has evaporated and the party officials are scratching their heads for how to keep the gravy train going and continue to provide jobs for the laid of workers as well as the new workforce entering the market (including a crop of 5.5 million university graduates every year). The languishing countryside and the widening urban-rural income gap was always an area of anxiety for the leaders. Guided by this concern, the party leadership in the past raised slogans like “the new socialistic countryside” accompanied by supportive actions such as abolishing the tax on agricultural income. The 2009 meeting clearly recognized that more needs to be done.

The rural stimulus

Research done by TNS in the cities, indicates that the urban Chinese though fearful of the global crisis (63% think that they will be affected slightly and 28% significantly) still sport a staunch optimism. However the rural folks – particularly the migrant workers are already in distress. The workers are obviously not happy to lose an income which they will never able to match with digging the small piece of land back home. They will perhaps be willing to work for even less, driving down the labor prices, and undoing some of the strength they had gained since the adoption of the Labor Contract Law last year. The government is helping out by infrastructure spending in the 4 trillion Yuan stimulus package– including expansion of railways, building roads and housing - much of which will go to rural areas and small towns. It is also trying to boost domestic consumption and cheer the rural masses by offering a 13% subsidy on a range of home appliances ranging from washing machines to mobile phones.

While the new DVD player and a color television may serve as a temporary palliative and help the returned workers while away their time (of which they have no scarcity now) a more lasting smile on their faces can only be achieved through alternate meaningful employment. The workers need an alternative to a miserable though lucrative toil in the cities and leisurely but penurious existence at home. More needs to be done to equip the laid off workers with new skills which make them eligible for other employment opportunities in and around their homes.

Equally important will be to offer them advice, guidance as well as small loans to start village level enterprises which could offer a sustained source of income. Micro-credit, the business of giving small, mortgage free loans in rural communities, which has transformed the lives of millions of peasants in many countries, possibly has a major role to play in China too. The new motorcycle that a rural resident may buy, aided with a newly introduced 13% discount, needs to become a vehicle for entrepreneurship and its engine also serve as an engine for rural growth.

Written by Ashok Sethi, TNS China

March 2009

A Black Year

2009-10-09T08:43:00Z

It was Queen Elizabeth II, who I first heard using the phrase “annus horribilis”. It wasn’t a part of Prince Philip’s anatomy that she was referring to, but to the travails of the recently concluded year of 1992, in which she witnessed the break-up of several family marriages and a fire at Windsor Castle. More recently, the Economist referred to the year 2008 as Wall Street’s annus horribilis – at the end of which, of Wall Street’s five big securities firms, only Goldman Sachs and Morgan Stanley still remain in recognizable existence.

It has been a shocking and all-pervasive black year – even extending to the White House. However, with a Black in the White House and a Brown at 10 Downing Street, the Indian community is celebrating a hard earned victory, and preparing itself for an age of Indian domination of the world. Black - a color which used to be dreaded in all its shades, and at all places, but particularly on the skin of the female offspring, is no longer an anathema. We expect the Sunday editions of Hindustan Times to soon carry matrimonial advertising mentioning “wheatish skin” with a sense of pride, rather than a tone of apology.

Unilever India, which swelled its corporate coffers on the sales of Fair & Lovely, is already thinking of phasing out the product and is evaluating preliminary concepts of Dark and Comely. China, another country with fondness for fair skin, except on Western journalists (and where, Olay the market leader, refers to the product category more precisely as whitening creams, rather than fairness creams) has started a campaign to educate its people on the benefits of black color. Chinese companies, which are desperately trying to remain in the black, as the rest of the world plunges further into red, also support the change.

The real question is to what extent this victory will benefit the poor blacks who have been receiving a raw deal from the world. A prime example is Michael Jackson, who was sued by the son of King of Bahrain for failing to write a new song and was expecting to be bailed-out by Obama. Michael also received inspiration from Obama’s victory and was seen humming “It don’t matter if you are Black or Brown” but was eventually disappointed and was last reported to be writing Chapter 11 of his autobiography.

Al-Zeidi, the Iraqi journalist, who threw his shoes at George Bush, said that he will continue to throw shoes at all American Presidents, regardless of their color. Asked whether he will match the color of the shoes with the color of the President, he said that in shoe throwing a contrasting, rather than a matching color makes a better mark. That is the reason why he threw a black shoe at Bush and soon plans to order white shoes, in case an opportunity arises to use them on Obama.

In the meanwhile, sipping black coffee in snow white Alaska, Sarah Palin was heard vehemently denying allegations that she is unfamiliar with the concept of contraception. Having five children was her single handed attempt to populate Alaska and increase its share of the electoral college – a mantle that she successfully passed to her sixteen year old daughter. “I hope we will have a black child in our family soon,” she said, hoping that her future generations may succeed in the task that she failed in.

Written by Ashok Sethi

Ashok.set@gmail.com

Love in crisis

2009-10-09T08:30:00Z

The importance of being in love

The Chinese celebrate Valentine’s day on the 7th day of the 7th lunar month.. As if one Valentine’s day was not enough, the people have also whole heartedly embraced the Western Valentine’s day of February 14, as is evident from the spurt of sales promotions and amorous activities seen around this time in the main cities.

It is not surprising, therefore, that love is important for the Chinese - as high as 98% claim that they have ever been in love. In fact falling in love seems to be easy for the Chinese – 76% believe in love at first sight. Surprisingly the sentiment does not wane with age and the belief in first sight Cupid is as strong among the older Chinese as among the younger. On an average a Chinese has been in love 2.5 times, and 10% have been swept off their feet as many as 5 times. They also start their love life relatively early – two in five first fell victims at the tender age of 18 or even less.

Where love has gone

But the Chinese love story has elements of both joy and tragedy. While nearly all have been in love at some point of their lives, regrettably only 37% can say that they feel the sway of the emotion in their hearts today. Age definitely dims the ardor – with only 17% of 45 years and older feeling the tug of love today. Men seem to fall out of love more easily than women – only 32% claim to be in love today as compared to 41% of the women. The words of Ambrose Pierce ( “Love: a temporary insanity, curable by marriage”) seem to ring true as only 24% of the married men and women say that they are still in love, as compared to 94% of unmarried couples. Even among the incurable romantics (who say that they believe in everlasting love) many could not help feeling disillusioned. It would seem that the celebration of Valentine’s day with sending gifts (which is the intention of 36%), dining out (planned by 34%), or an evening out at the movies (17%) for many may be less an expression of passion and romance and more a mechanical ritual.

The lack of love in people’s lives today is particularly poignant as 60% equate love with happiness. This happiness expected or derived out of love seems to come more from the feeling of companionship, affection and understanding than passion and pleasure. Love means passion for only one in ten urban Chinese. Also only for one in five, sex is one of the important meanings of love. While men talk a little more about sex, women perhaps euphemistically refer to “attraction”.

Fidelity and love

The lack of feeling of love today could well be related to a feeling that their partner has not been giving them his or her single–minded attention. Nearly half the people said that they feel they have been cheated by their partner. Whether real or imagined, fidelity seems to be a key ingredient of love in China. The feeling here is “more sinned against than sinning” – only one third admit themselves that they have succumbed to the temptation of an illicit affair, but nearly half are suspicious of their partner’s fidelity.

Written by Ashok Sethi

Based on an online survey done by TNS of 290 Chinese, aged 18-54 in key cities of China. Conducted in February 2009, before Valentine’s day.

Financial crisis with Chinese characteristics

2009-10-09T08:16:00Z

Observing the process of making jiaozi (Chinese dumplings) is an interesting experience. A long and thick strand is extracted from the pile of dough, broken into little pieces, each piece rolled into a thin pancake skin and stuffed with ground meat, chopped green vegetables, or egg. These little parcels are finally steamed, boiled or fried and served steaming hot with a dip of vinegar and optional chillies and mashed garlic. While observing the process and enjoying a portion of jiaozi last week in a small roadside shop near Xizang Road in Shanghai, I was somehow reminded of the packaging of sub-prime loans into delicious looking structured investment vehicles, which were steamed into respectability by the credit agencies and picked up by the financial community with as much relish as I was raising the jiaozi to my mouth.

As if reading my thoughts, the restaurant owner who was rolling jiaozi, broke my reverie with a sudden question, “How is the financial crisis affecting India?” Given the universality of basic education in China, the level of general awareness (though not necessarily the degree of appreciation of the issues) tends to be high. It was not a surprise, therefore, that the dumpling roller from a village in Shandong province seem familiar with the global meltdown and curious about how it is affecting the world. His dumpling business in downtown Shanghai, however, he felt was not particularly vulnerable to the global crisis of confidence.

The mood elsewhere in China, however, is somber and in fact had been since the beginning of this year. According to a newspaper report, the number of people seeking psychological counseling in Beijing has doubled since the beginning of the year, and 85% of these are worried about possible job loss.

The stock prices started tumbling earlier this year and wiped out over half the value of most large companies listed on the Shanghai stock exchange and the savings of many who were enticed to the market by its heady ascent. Once a favorite pastime of the urban Chinese, including retired government workers and grizzled grandmothers, betting on the stock market has turned out be a regrettable indulgence.

The first Chinese victims of the current global financial crisis are the migrant workers who power the exports of cheap toys, garments, shoes and other such products to the Western world. Toy factories in Guangdong province of China are already closing and workers forced to go back to the villages they came from and again face the subsistence existence based on a tiny plot of land. Many, however, are likely to come back to the cities and seek employment in more export-proof industries of China.

Among the general Chinese population, the consumer confidence index is down from a high of 100.8 in October 2007 to 91 in September 2008 (a moderate decline when compared to the plunge in the US consumer confidence from 61.4 to 38 in just a month as reported by the Conference Board). Thrifty by nature and not afflicted by the profligate habits of their American counterparts, the confidence dip in China has not so far translated into a drastic tightening of purse strings or a cataclysmic reduction in consumption. However, the Chinese brow is also writ with worries about the future, queues outside popular and premium restaurants are getting shorter, and the shopping bags carried around luxury shopping malls seem lighter.

According to the latest data, the Chinese economy grew 9% in the third quarter of 2008, a dazzling performance compared to a 0.5% decline in Britain but a poor fizzle as compared to a blistering 11.9% growth in the same period of 2007 in China. When it did grow at this scorching pace, the talk was often of “overheating” and the government often voiced concern and attempted to rein the economic horse on steroids. But this strain has made a sudden reversal, and the People’s Bank of China cut interest rate for a second time in three weeks to reinvigorate the economy.

While not fully immune to the global virus of uncertainty and anxiety, the Chinese definitely show a higher resistance and resilience. While a relatively healthy and vibrant economy still growing at a 8%+ clip definitely helps, it is the Chinese psyche which possibly also contributes strongly to this feeling. As my colleague Eric Tai remarked “The Chinese have a saying –“Weiji jiu shi zhuanji” or “opportunity arises from crisis”. This positive thinking will definitely help the Chinese tide over the crisis with greater aplomb and the Chinese resilience should help cushion some the pain caused by unrestrained greed and excesses of the Western financial establishment.

Written by Ashok Sethi

Joe the Plumber

2009-10-09T08:10:00Z

The more astute observers saw it coming. First it was the clogged toilet of the international space station and then the defective plumbing in the offices of Lehman Brothers forcing them to spend precious time to walk to the public toilet. Insiders say that the financial engineers at the legendary investment bank were torn between the fear of an opportunity loss of millions of dollars by their temporary absence from their desks and the urgency of relieving themselves. Plumbers sabotaged further by connecting the plumbing pipeline with the financial pipeline and substituting debt paper with toilet paper.

For John McCain and Barack Obama It was the fear of being forced by unusable toilets in the White House and the prospect of walking up to the public WC at the Capitol in the middle of a discussion on the Iraq war, that prompted them to reach out to the plumber lobby with unprecedented concessions and incentives.

Needless to say that members of other professions are not amused at this blatant discrimination. A representative of the baking industry issued a statement, “Our products are the reason why plumbing is so important”. Jack the baker remarked that, “the inspiration of the financial experts to make the stock market rise to such frothy heights came from our success in use of self-rising flour. It is unfair that the plumbing industry is singled out for tax breaks”.

Bill the butcher is also peeved and contemplating his next move. His industry’s effortless shift from prime-cuts to poor quality sub-prime cuts provided the relevant theoretical foundation and the terminology for sub-prime mortgages. The industry has been facing significant hardship as misplaced health concerns drive more and more consumers from steaks to grilled fish and sausages to cucumbers. If special incentives are not provided to stimulate consumption of meat and butchers’ knives not supplied at a subsidized rate, there will be more financial havoc for all and more will be sent to the slaughterhouse. “Don’t kid with us – the steaks are high,” Bill the butcher warned.

However, the most telling response came from Sally the stripper, who has been unsuccessfully lobbying for several years for exemption of entertainment tax on strip dancing by demanding it to be declared an art form. “We are the only ones with untainted assets now,” she proclaimed. “And they are available for inspection to anyone for a small fee. If only there was as much transparency in investment banking as in our profession, we wouldn’t have been in this mess!”

The public in communist China also fail to understand the reason why the plumbing profession has been selected for such preferential treatment. It was traditionally the soldier and the farmer who were of any significance and the businessman and the real estate developer who are of consequence now.

The Indian people in the villages are also left cold and perplexed – most used to the open air fields do not enjoy the benefit of plumbing. Their only interaction with plumbing is the tap for drinking water which is often dry or malfunctioning. They are skeptical that the incentives to the American plumber will improve their access to clean water in any way and dismiss this move as a pure hog wash.

Written by Ashok Sethi

Ashok.set@gmail.com

Imagine – a Unicef luxury watch!

2009-10-09T08:06:00Z

Defining luxury goods

While there could be many ways of defining luxury goods, possibly one key element of all the definitions will be that the functional benefit that the consumer gets out of buying luxury, though substantial, normally does not commensurate with the price paid, and the deficit is made up by emotional gratification. While emotional gratification also constitutes an important part of delivery in mass market products, the difference is that for mass market products the balance of delivery is tilted towards functional benefits, whereas for luxury products the balance gets skewed in favour of emotional payoffs.

If this premise is accepted, we need to explore whether it is possible to expand the range of emotional gratification that the consumer may get from spending a large sum of money, which does not offer commensurate functional gratification. The emotions that the luxury goods marketers have traditionally been exploiting have been prestige, class and exclusivity. Luxury advertising often portrays its users as being unique, belonging to an exclusive clique and admired and fawned upon by others.

New emotional gratifications

Human beings are complex animals and have a range of emotional needs. While needs for prestige and admiration are well established, and it is also known that consumer is willing to pay to satisfy these needs, it should be possible to go beyond these into new areas of gratification. I hypothesise that it is possible to go beyond these clichéd emotional gratifications and persuade the consumer to pay luxury prices for a range of products and services, offering newer types of emotional gratifications.

These needs include a need to feel responsible, helpful and leading a worthwhile existence. “Giving back” to the society is an often theme heard among those who have made it and feel that they owe something. I present below three new avenues for luxury goods. These avenues, I feel, will not only lead to profits for companies who explore these, but will also contribute to the good of society.

Green luxury

More and more hybrid cars are getting sold in the developed world. Sold at a significant premium, functionally they offer little more (in fact a little less, some will argue) as compared to the conventional gas guzzlers. However, the purchase is fueled by (pun intended) a need to prove (to oneself as well as others) of being a responsible consumer. More extreme is the example of cars run on fuel cells whose only emission is pure water – which in spite of the enormous cost is finding retail customers in the US and is considered by some to be the ultimate environmental status symbol. As environmental awareness increases, consumers are keen to reduce their carbon footprints and are willing to pay more for products and services which are environmentally friendly. Luxury good opportunities exist in areas of personal vehicles, energy solutions and green homes as also for a range of products and services which espouse environmentally friendly production and distribution methods.

Responsible luxury

The 2006 film Blood Diamonds created awareness about conflict diamonds and made one wonder whether the beautiful stones you are sporting are tinted in the blood of innocent people who are exploited and killed for profiteering and diamond money. RugMark is an international nonprofit organization which randomly inspects the looms of companies that agree to employ adults only and provides a child-labor free certification for rugs. With cost pressures and competition, companies have been going out of their way to cut costs. While doing that some have also fallen to the temptation of cutting corners. Luxury goods buyers will pay a premium for the emotional satisfaction that their joy of owning the product which is not produced at the cost of exploitation of others. Luxury good buyers will pay more for consumption for products certified to be made ethically and responsibly.

Charitable luxury

While charity balls is not a new concept, a charity Louis Vuitton handbag is. Unicef attempts to raise money by selling products under its brand but offers little more than New year cards, some trinkets and toys. The challenge for luxury goods manufacturers is to sell more to the buyer and make them indulge in frequent purchases. In doing that they need to find new appeals and draws. While on the face of it, the concept of luxury handbags while the poor are starving may be repellant, but the combination of the two is practical and offers a win-win situation for the buyer, the seller, and the poor. I feel that there is scope for selling luxury goods, with the sales linked to donations for the needy. In doing that, we will enrich the emotional satisfaction of the buyers and also contribute to charity (meeting the emotional needs of the rich and the functional needs of the poor!)

Written by Ashok Sethi TNS China

The Grey Market

2009-10-09T07:49:00Z

A sizeable market

In Asia, grey hair normally earn respect but little else. Youth is at a premium and Asians go to great lengths to prolong their youth or more realistically, masquerade their advancing years. A glaring example of this is evident in the group photograph of the Standing Committee of the Politburo of the Communist party of China, with a full crop of gleaming black hair crowning each venerable member.

Marketers have also given a short shift to aged – while they commence studying the needs of children even before they are born consumers are often dropped from the radar even before they reach the age of fifty. The marketers in countries like Japan are forced to change their attitudes, as they realize that the elderly are hoardings large part of the nation’s investable funds.

In affluent countries people live longer (may be there is more to live for) creating a large population of the elderly. However, China faces the ageing issue (or problem as seen from the economic and social point of view) a bit prematurely. In spite of the fact that it is far from achieving affluence, the senior population in China is estimated to be 11.6% of the total. Of course, percentages when applied to the size of China result in gigantic numbers – and one sees that there are 153 million people in China who are 60 years of age or older. The reasons for the “grey boom” in China are not difficult to decipher – sharp increases in basic nutrition and hygiene, coupled with significant increases in quality of healthcare, along with strong discouragement for multiple off-springs, inexorably tilted the balance of population.

From a marketing point of view, size is important – but so is the purchasing power. The Chinese elderly would normally live on a modest pension. However, the redeeming fact is that well rid of the children, they only have themselves to spend this money on. So while unable to emulate the extravagant behaviour of Handycam wielding Japanese tourists in Europe, they still have the wherewithal to treat themselves with economy travel to a nearby city in China. Hence this sizeable group of healthy individuals with modest but collectively enormous means, represents a growing market segment for marketers if they could read their special functional and psychological needs and address them with intelligently designed products and services.

The “grey” market opportunities

The opportunities in this market exist in several areas ranging from healthcare services, health supplements (already a huge market – with not only the elderly buying for themselves, but the children splurging on huge and extravagantly packaged health products to gift to their parents in an attempt to assuage their guilt of abandoning them) to flavour enhanced foods (according to medical research reports, the number of active taste buds declines with age and hence the foods need special flavour boosts to titillate the elderly taste buds).

Product design, specially for products the older consumers did not grow up with, needs to be guided by special considerations for the need of the elders. Implications also exist for design of retail aisles, and physical positioning of products. The product labels need to be large and easy to read and the store shelves designed to provide easy access without challenging contortions of the body.

Financial needs of this group are obviously unique as the group needs to carefully weigh the possibility of running out of resources in case of long life and leaving a large sum behind without an opportunity to enjoy it. Carefully designed financial and insurance products could address these concerns and tap the market.

How to sell to the elderly

Marketing is founded in the principle of satisfying consumer needs. Consumer needs exist at several levels or layers. The most obvious layer is, of course, the functional needs, which the products and brands meet through their features and product attributes. Clearly with biological changes, the functional needs of the elderly consumers acquire some unique characteristics.

However, apart from functional needs, consumer behavior is also governed by social and emotional needs which assume a high level of uniqueness and complexity for the older consumers. These consumers have throughout their lives bought products for their children – their emotive needs have centered around protecting and nurturing their families. They chose brands which offered emotive benefits of helping to be a good mother, a responsible father or a conscientious home maker. But with an empty nest, the elders need to look elsewhere for emotional sustenance. Relatively affluent older consumers’ state of mind often broadens to include ideas of social responsibility and philanthropy, broadening their caring gaze to beyond their own children. At the same time they are learning to pamper themselves, without the gnawing feeling of guilt. Marketers need to understand these emotive needs with sensitivity and tap them through thoughtfully designed brand propositions and communication.

The “grey” market comes of age

Traditionally marketers have tended to ignore the older consumers and focused their energies on trying to woo the young. However, with the changing demographics, marketers have no choice to find the market for their products among the elderly. The marketers are not going to endear themselves to this segment by decrying age and glorifying youth. They need to embrace age and cater to the needs of this segment with sensitivity and care.

Why can't they be more like us?

2008-08-08T02:45:00Z

Fearing the polluted air, the American Olympic cycling team arrived in Beijing wearing masks. The West continues to wonder why China can not fix its problems, and think and behave like them. President Bush's address to the world on the eve of the Beijing Olympics raises some important questions¡

On behalf of the United States of America, I congratulate the Chinese people and leadership for the impressive preparation they have made for hosting the 2008 Olympics. But while I say this, I must also urge the Chinese to learn more from the great nations of the world - particularly America.

We run a benign state, providing generous loans to our citizens, to buy houses which are larger than their incomes would allow, to live in a comfort that they can not afford. We allow them to live from month to month, borrowing from one credit card to repay the debt of another, to continue to flourish in an end less circle of debt fuelled luxury. The Chinese citizens are deprived of these benefits and need to pay 30% down payment for their apartment, and provide income certificates to apply for a mortgage.

I acknowledge that our poor are now facing unheard hardship, including facing the threat of losing their 4 bedroom sub-urban mansions, Most glaringly their very livelihood is threatened as they are unable to afford the gasoline to drive their 3 gas-guzzling sedans to work. The Chinese poor live in villages on their farms and struggle to feed their families and provide them with clean drinking water.

America has been tottering on the verge of recession, lost trillion of dollars in ingeniously crafted collateralized debt obligations and its legendary manufacturing enterprises are making losses in billions of dollars. China¡¯s economy, on the other hand, staged a record growth of 11.4% in 2007 and managed to grow at 10.4% in the first half of 2008, despite the chaos that we inflicted on the world.

We take natural disasters in our stride, neglecting hurricane Katrina till the man made disaster overshadowed the natural one. Chinese, also frequently blessed with nature's fury, fly their Prime minister to Sichuan within two hours of the being struck with an earthquake, and mobilize the entire nation to bring succor and comfort to the afflicted.

Our citizens quake to step after dusk in downtown streets of Chicago, New York and other great American cities, because of fear of getting mugged, stabbed or raped. The Chinese youth roam freely and happily in Shanghai, Beijing and Chengdu, while solemn faced Chinese policemen patrol in total oblivion of their merriment.

Our citizens have freedom - freedom to sell sub-prime mortgages, freedom to buy them, freedom to disguise them as respectable debt instruments, freedom to give them as AAA ratings, freedom to gamble (absolute luxury, when they can lose so much in the financial markets), freedom to buy guns (to escape from it all, if nothing else works), freedom to bomb Iraq (to share and divide the misery that we feeling our own country). The Chinese enjoy none of this freedom and are tightly controlled by a draconian regime with a misguided determination to protect its citizens from harming themselves.

While in most areas we want the Chinese to become more like us, there is one area where we want to retain our unique position and unassailable lead. We are the largest emitter of greenhouse gases in the world. Unfortunately this is one area in which China is becoming more and more like us. But our position as number 1 polluter is unshakable. We will not let the Chinese poor benefit from electricity, motorized transport or air travel. As we steadfastly refuse to sign the Kyoto protocol, we are determined to use all our power to prevent the Chinese from enjoying an excessive lifestyle which threatens the world with dire consequences of global warming.

I wish a great success for the Olympics and hope that they will change China for the better.

Written by Ashok Sethi
Ashok.set@gmail.com

Moral Debate in China

2008-08-07T07:24:00Z

Despite repeated aftershocks, the dust is slowly settling on the devastation of the Sichuan earthquake and the Chinese media coverage has shifted its focus to celebrating the Olympics. In all the heart-rending destruction and devastation, there are two episodes from the earthquake which generate a quizzical smile. The first of these is the story of Fan Meizhong, a school teacher who ran for his life when the quake struck, leaving his students behind. Fortunately, his school remained standing and none of his students were hurt. However, the aggravating fact was that he later, in a fit of candidness, admitted to abandoning his wards and defended his action as guided by his own sense of morality and the natural instinct of self-preservation. He proclaimed that he loved his life and that he would not sacrifice it for anyone. Only safety of his daughter (not even his mother) could induce him to sacrifice his own life. Expectedly this proclamation elicited a huge hue and cry from the general public. Nicknamed "Run Run Fan¡" in light of his action, faced swift condemnation and was fired from his job. Not only that, it even prompted the Ministry of education to issue a new State ethics regulation, which says that protecting the students is a moral obligation of the teachers.

While Fan's detractors have been more numerous as well as more strident, the media has not been devoid of a few who have dared to praise him for his honesty. Fan could have kept quiet and possibly lived with a nagging feeling of guilt throughout his life. But he chose to publicly expunge it and in a way proclaim his innocence while admitting his guilt.

The second incident is perhaps even more intriguing. Jiang Xiaojuan, a 30 year old police woman in Jiangyou city in Sichuan province and a mother of a six month old child, breastfed six children who lost their mothers in the earthquake. Caught in the act by a press photographer, Jiang expectedly faced profuse showers of praise and approval. Clearly this was a unambiguous case of selfless compassion, of a member of the police force behaving with uncharacteristic tenderness and care. While most agreed to this, what caused the debate among the Chinese was her subsequent promotion to assistant commissioner of public security for the city. While her action was clearly commendable, the resultant promotion, the Chinese public felt, was not justified - as compassion alone, however heart-felt and moving it may be, is not an adequate criteria for elevation to a senior position in the police department.

The Western media and political leaders are obsessed with what they see as absence of democracy and free speech in the China. Some even go to the absurd length of saying that the country suffers from a moral vacuum. The lively and open debate around the Run Run Fan and Jiang Xiaojuan shows that it there is spirit of debate and moral discussion which is alive and vibrant in China - it is just that the issues that the West considers as the core of morality are perhaps not the same as the ones that excite debate and passion among the Chinese. West needs to resist the temptation of judging every country and every person by the single minded view of Western morality and democratic ideals. The Sichuan earthquake revealed a profile of the country which is compassionate, considerate and reflective. There is a sense of balance and intense reflection on what is right and wrong. Recognizing such a mindset, the West needs to let go, relax and let China find its own path at its own pace.

The Colors of China

2008-07-18T09:59:00Z

The red envelop

Red is the most "Chinese" of all colors. "Hong bao", literally a red envelop, is one of the most fundamental parts of Chinese life and is traditionally used to house money which the adults gift to children on Chinese new year. The concept is extended to any kind of gifting (voluntary or obligatory), including gift to the married couples, to employees from the company boss, but most importantly to grease the palms of those who wield the power to make your life easier by conferring favors or removing impediments. Red is very special color in China - the most auspicious of colors, a color which is steeped in tradition and a color of celebration. Red is also sexy, warm, vibrant and exciting. It is one of the favorite colors in China - though not the most favorite.

The heavenly blue - favorite of Chinese

In fact it is blue, which is the favorite of the Chinese - for both men and women and young and old. If red symbolizes prosperity on earth, blue connotes the heaven and the sky. If red is exciting blue is calming, and preference of blue over red indicates that given the hectic existence that the Chinese are leading (and perhaps the turmoil that they went through earlier), they now prefer serenity and peace over excitement. Blue offers that feeling of tranquility and also manages to stay cheerful and modern. Blue apparel is particularly favored by both men and women - including shirts, trousers, suits and also skirts for women. Paying a heavy cost of economic development in terms of urban pollution, blue is also a color the Chinese are seeing less and less of - as formerly blue skies bear a depressing grey and erstwhile limpid water looks turbid and muddy.

In black and white

While colors like red, pink and yellow bring up vivid imagery and associations, for practical use black and white rule the roost. Black is considered prestigious and sophisticated and a favourite color not only for apparel (suits, trousers and even skirts fro women) but also for cars, mobile phones and other electronic equipment. Traditionally, associations with black in China have not been very positive, but modernization has bestowed the color with respectability and even prestige. Same holds true with white - while traditionally associated with funerals, it does not bear that stigma now. In fact, white has been adopted as a color of the dress that an urban Chinese bride will wear at her wedding. White also has associations of purity, and is also seen as bright and calming. It is a color for shirts and underwear for men and women, but also shoes and skirts for women. Of course it is the desired color of the skin and Chinese women spend a fortune on whitening lotions and fairness creams. It is the most popular hue of paint for the walls (along with cream) of the living room and the bedroom - though for children's room, many would prefer a warmer and more cheerful shade of pink. White also forms the name of China's most popular tipple - bai jiu (literally white spirit or wine) - a potent potion that causes much grief at wedding banquets and other parties, as victims (the newly married couple or the hosts) fall in exhaustion and inebriation after interminable rounds of obligatory "gan bei" (bottoms up) with the guests.

The sexy pink opportunity

Pink is expectedly seen as the most feminine and sensuous color, but is also strongly associated with children. Men are most turned on by pink, though women find black to be sexy. It is the favorite color among women to paint the bedroom walls with - their husbands may have to settle for this for the sake of marital bliss, and the joy of sharing the wife's bed - though their own preference lies with white and cream. While more men and women go for the obvious choice of black and silver for mobile phones, notebook computers and television sets, a sizeable opportunity exists for pink among women in these product categories. With increasing participation of women in durable purchase and other areas of decision-making which have traditionally been dominated by men, the manufactures of these products may well give a second look at the feminine and sensuous pink for cars, mobile phones and laptops.

The green revolution

Green also finds favor with the Chinese - a bit more with men, as women are drawn to many more colors. While green is one of the favorite, it lacks a unique personality other than being cheerful. Though green does not feature very high in the external or internal apparel of the Chinese, more and more environmentally savvy Chinese will like the companies to sport this color in a spirit of environmental sensitivity. In fact, from that point of view, green is the most important color of 2008 - as consumers show higher and higher levels of environmental awareness and willingness to pay a premium (and even suffer a bit of discomfort) in their bit to preserve this earth for the future generations.

The coming of gold and silver

A home to many dynasties, China well recognizes gold and purple as symbols of royalty. Gold is also seen as bright, prestigious and an obvious, if kitsch, symbol of the rich. Gold is the second most auspicious color after red, and the third most "Chinese" shade (after red and yellow). Always a better judge of value, gold is closer to women's hearts than men's - and they are willing to color their hair with this and some even paint their toe nails in glittering gold.

Silver also has a sizeable following (and increasing in popularity). Considered vibrant and bright, the most distinctive attribute of silver is its modernity. It is the second most popular color for electronics equipment and automobiles (black being the most popular). In fact among women it is nearly as strong as black and even preferred.

Marketing of colors

While the "little red book" (a compilation of quotations from the Chinese leader Mao Zedong) is now reduced to a mere tourist attraction, the color red still resonates in China and the consumers feel that it will be one of the most fashionable colors of 2008. Other colors which are likely to be seen more prominently in 2008 are prestigious black, shining silver and glittering gold. Color holds strong associations in the mind of the Chinese consumers which are steeped in traditional, but tempered with modernity. Understanding and monitoring these as they evolve further, would be an important distinction between companies which reach for the gold and those who face red in their balance sheets.

Based on an online research among 403 Chinese, aged 18-44 and living in key tier 1 and tier 2 cities of China. The research was conducted by TNS, the largest marketing information provider in China, and the second largest research agency in the world.
Written by Ashok Sethi, TNS China

The tremors that moved the nation

2008-06-05T09:21:00Z

It was in the TNS office on the 28th floor of Finance Square in Shanghai, where I sat with a concept test brief in my hand, in deep contemplation on how to add value to the research design, when my cogitation was interrupted by the tinkling of the blinds against the windows. Before I could get time to puzzle about why the blinds were moving inside the building with all the windows tightly sealed, I realized that it was not just the blinds but the whole building which seem to have broken into a gentle dance. If my colleagues were frightened at the realization that we were experiencing an earthquake, they did a great job of disguising their fear and with great aplomb and composure we started shuffling down the stairs to evacuate the building (including me, with the research brief still in my hand). The tremors were persistent and I kept on feeling the building¡'s sway right till our dreadfully slow descent to the 20th floor. After that, while the earth seemed to have steadied itself, the legs had acquired a momentum of their own and I kept feeling the sway for quite some time to come.

Finally out of the building, we were puzzled at the strange occurrence - Shanghai has almost never had an earthquake and it was the first time that most of us experienced the trembling of the building and having to evacuate it under the fear that it will collapse on top of us. While engaged in animated discussion, some irritated and some relieved with the unexpected break in the office monotony, little did we realize the tragedy that had taken place more than a thousand kilometers away in Sichuan province. While the Finance Square kept standing and did not bury us in its steel and mortar blocks, 900 school children in Dujiangyan city near the provincial capital Chengdu, were not as fortunate. Nor were thousands of other children and adults, who could not escape their schools, factories and homes in time and were trapped under plies of rubble. Gradually the magnitude of the disaster unfolded in front of us, numbing us with grief and stupefaction.

While natural disasters are inescapable and we have little choice but to stoically and philosophically accept their tragic consequences, the subsequent human ineptitude and neglect which often compounds the misery is definitely preventable. Fortunately, China¡'s response was in sharp contrast to the apathy of the Generals of Myanmar when faced with the devastating cyclone which struck the country a few weeks ago. Chinese Premier Wen Jiabao was in Sichuan within hours of the earthquake. With a megaphone in hand and moist eyes, the nation saw him addressing the victims in a tremulous voice, offering condolences, reassurance and hope. It was clear in the days to come that the country mobilized every possible resource to rescue those who were still alive under the rubble and offer relief and succour to those who suffered the most.

It was a tragedy that touched the hearts of the people throughout the country. In an overwhelming wave of sympathy, the people are reaching for their wallets, donating blood, volunteering to work in the affected areas, even offering to adopt the children who lost their parents.

It will be a while before China can forget the tragedy that struck it out of the blue and traumatised the nation. Those who lost their loved ones, their homes or livelihoods will possibly live the rest of their lives with indelible physical and emotional scars. However, it will also be a while before China and the world can forget the efficiency, promptitude and compassion with which China dealt with the tragedy. It is reassuring to see that it is not only the Chinese mind which has transformed the country into an economic powerhouse, which deserves praise, but that its heart is also in the right place.

Chinese ratatouille

2008-05-12T09:39:00Z

Chinese ratatouille

The Chinese new year of the rat has been a turbulent one so far. Right at the start of the year, many Chinese who work in cities, away from home, could not make the mandatory journey back home, a victim of mayhem in transportation as a result of the worst snow to hit China in over 50 years. As soon as the snow thawed and a semblance of normality was restored, the age old issue of Tibet raised its troublesome head again. Not a positive press for China in the year of the rat - the year in which China will don the mantle of the Olympic host and bask in the glory of their achievements as the world gazes with awe and amazement.

The bite of the snow still gnaws, and the counter allegations and invective on Tibet still ring in the air, encouraging reflection on the state of the nation and the challenges it faces on the march to fulfill its ambition to become a moderately prosperous society (xiao kang shui ping, in Chinese). While fueling the improvement of the rural living conditions in countryside through remittances from the urban workplace, the migrant workers continue to lead a miserable existence in the cities. Subject to quetionable contracts, some times below legal wages, and little paid leave and social welfare, the workers provide the cheap labour at the country¡¯s economic engines in its factories and construction sites. The relatively well heeled urban dwellers often look at them with fear as the "haves" often look at the "have-nots".

In spite of the harsh existence that this group ekes out, they are still responsible for bringing money to the otherwise impoverished countryside. The Chinese government is paying special attention to this, as evident in their development plan, embodied by the slogan of a "new countryside".

While the rural residents are learning to cope with these basic challenges and the urban folks face the ordeal of rising prices. The Consumer Price Index touched 8.7% in February this year, an 11 year high. For the first quarter as a whole the inflation stood at 8%, a 5.3% increase over the same period last year. Apart from domestic disasters such as the snow storm and the blue ear disease afflicting the porcine population, international rise in grain prices is also contributing to the rising food prices.

At the same time rising real estate prices are making housing more and more inaccessible. Buying houses, is a new way of spending new money in China - just 15 years ago there were no houses to be bought, nor was there much money to buy them. But now buying a house has become a de rigueur pre mating condition and the steadily rising price line is converting many young Chinese into fang nu (house slaves) as a result of having burdened themselves with frightening mortgages. The alternative is forced bachelorhood, if they couldn't muster up the courage to take the loan (even if they did muster up the courage to ask the hand of the loved one in marriage!).

While the real estate was in the ascendance in the just concluded year of the pig, its flight paled into insignificance when compared to the 96.7% increase in the Shanghai composite index. For the 136 million Chinese who climbed onto the stock bandwagon, buying houses became a lot easier with this gift from the financial markets. However the many others who balked at what they saw as the irrational exuberance of the market, rued the fact that they did not have the courage to haul their hard earned savings to the nearest brokerage. However with the over 40% decline that the market has seen from the dizzy heights of the peak in 2007, they are now congratulating themselves at their foresight.

In spite of the fact that the issues confronting the Chinese are weighty, they have much to look forward to and bring back a cheer in the lives. Of course they will beam with pride when they will host the Olympics this year. In fact the pride is already on display as are the marvellous facilities, including the Bird's Nest stadium and The Water Cube several months ahead of the schedule.

The new apartments in the cities may stretch the bank accounts of the young Chinese who rush to acquire them, but they offer distinctly improved living conditions from the old and cramped houses they inhabited earlier. The new owners are enjoying the modern acquisition and converting their homes into sanctuaries of comfort and privacy. The stores are brimming with goods to furnish the apartment and make it an exclusive abode, making its owners glow with pride.

The new middle class created as a result of entrepreneurship and well paying jobs from multinationals and Chinese companies bulging with corporate profits, are aspiring to a lifestyle of the Western elite. They visit bars, sip red wine, enjoy gourmet food, watch Hollywood films (including Ratatouille, dubbed into Chinese) and plan for holidays abroad. The chilling frost which heralded the year of the rat has done nothing to dampen the optimism and the enthusiasm of the urban Chinese who plan to continue the celebration into the year and many more to come. The year of the rat represents the start of a new cycle in the Chinese calendar - and perhaps for China too as it gets ready to stage the Olympics. Rat is believed to embody qualities of being quick witted, nimble and charming. "Rats" like to be in the thick of action, are sociable and are never late for a party - qualities which will undoubtedly be on display in Beijing during the Olympics.

The Eclectic Chinese

2008-03-20T10:16:00Z

A holiday to sweep the tombs

Chinese traditionally bury the dead. However, after the enlightened communists took reign of the country, they very rationally declared that the priority for the land is for the living and not the dead. Chinese were told to cremate the dead, burials were banned as was the erection of tombs. Given this, it seemed surprising when earlier this month, the Chinese government declared Tomb-sweeping day to be a new holiday in China. Along with the Tomb-sweeping day, holidays were also declared for two other traditional festivals of Dragon Boat festival and Mid-Autumn festival. Are the Chinese re-discovering their traditions? After years of efforts to obliterate the traditional shackles, is the Chinese government now encouraging the people to celebrate their traditions? What makes it even more surprising is the fact that these holidays will replace the three day holiday observed for the May Day celebration - an occasion of symbolic importance to socialism, whose ideals the Chinese government still claims to espouse.

The three day May Day holiday was, in fact, used to be extended into a "golden week" by adding the intervening days to the weekend (the additional holidays compensated for by working on the preceding or following weekend). Before this declaration, China observed three "golden weeks¡" in a year - three week long holidays for the Chinese New Year, the National Day in October and the May Day celebration. This has been the policy since 1999, when the Chinese government decided that the citizens must get an opportunity to spend their new wealth and in the process further boost the economy. Now China retains two of these golden weeks, but has substituted the third with three one-day holidays for traditional festivals.

Rediscovering the traditions

The Chinese government, as one would expect, is governed more by practical logic than tradition or sentiment. The real reason for this change perhaps lies in the fact that the three golden weeks had started to create a mayhem by the en masse movement of millions of Chinese. The populace takes the opportunity to get out of their homes, visit their families or go for vacations. This causes an immense strain on transportation and other services, and people started complaining about the exorbitant prices, traffic snarls and poor service during these weeks. Additionally, for a country so dependent on foreign trade, it is perplexing as well as vexing for its international trade partners when they see the frenetic trade coming to an abrupt halt as often as three times a year.

However, apart from the rational, there are also emotional factors guiding the change. The Chinese, with their new found wealth and prosperity, now have a reason for celebration and pride. Embracing the old traditions, and practising the associated rituals with openness and confidence is a part of that resurgence of national pride. Chinese today not only want acknowledgment for their economic success, but they also wish to be applauded for their history and traditions. Chinese have set up Confucius Institutes in 50 countries, sent their terracotta warriors for display in the British Museum - all in an attempt to demonstrate that not only is this a country of extraordinary manufacturing prowess and technology, but also has a cultural richness which deserves noticing and appreciation.

Embracing the West

Not only does China seem to be rediscovering its own traditions, it seems to be embracing the ones from the West with equal gusto and enthusiasm. Christmas celebrations began early and cut-out figures of Santa Claus started appearing in shop windows of departmental stores from the middle of November. The silver bells, figures of reindeers, elves and snowmen jostle each other in almost a chaotic, almost desperate representation of the Christmas spirit. In a rousing finale, earlier this week large pictorial displays of Christmas scenes appeared in most office buildings and a Christmas tree with twinkling lights, encircled with gold paper covered pots of poinsettia embellish the entrance of every office or hotel.

For a country of atheists, this celebration of a Christian festival with such enthusiasm is perhaps baffling. However, Christmas in China is not about religion, but a modern paean to consumption and fun. Masses of people throng the streets, visit bars and haunt the stores for discounted products. Chinese celebration of Christmas, is a typical example of how China embraces the West to its own advantage and adapts it to selectively pick its best from their own point of view. So no Christmas cake or plum pudding ¨C we prefer our dumplings (according to a TNS survey, Chinese consider no food in the world to be anywhere as good as their own) and no midnight mass - religion has no part to play here. But shopping, gifting, drinking and merry making is embraced with zest and passion.

The marketing challenge of understanding the Chinese consumer

Neither burdened with strong traditions and rituals, nor under the blind sway of the West, Chinese are behaving in an eclectic way in deciding what to embrace and what to discard. Their decisions are based on practical logic, commerce and now also a sense of national pride. For marketers it is essential to understand how the Chinese weigh several, often contradictory, arguments and pulls to make the decision. This is as true for which festivals to celebrate as it is for which products and brands to adopt. Only keeping a hand permanently on the Chinese consumers' complex pulse can guide the marketers in the right direction.

China Opportunities for India

2008-03-19T11:16:00Z

The Unknown India

What do the Chinese think about India? Well, they don¡¯t. 398 urban Chinese were asked to associate 24 attributes with 14 nations, including the US, Japan, Korea and India. 58% of the people associated no attribute whatsoever with India. By no stretch of imagination is India a salient nation in the mind of today¡¯s Chinese. Among the younger generation, at best, it brings up image of excellence in software. Some envy the facility of Indians with the English language and wonder whether English is the mother tongue of many Indians. The older generation, particularly the taxi drivers, spontaneously start humming ¡°awala hoon¡± on the discovery that their fare hails form India, bringing memories of a time when Raj Kapoor¡¯s Awara was perhaps one of the five films that the Chinese government allowed its citizens to watch in a year.

A missed opportunity

The obscure status of India in the Chinese minds is a missed opportunity for India. There is much that India could achieve by raising their profile among the contemporary Chinese, as they gaze at the external world with awe and bewilderment and whose view of the world is yet to fully crystallize. It is the appropriate time to invest in creating a clear image and a distinctive identity for India, and by doing so, benefit from the momentum of the fastest growing economy in the world. While there are many areas of opportunity, the following do stare prominently as the ones that India is particularly well suited to exploit.

Tourism

34.5 million Chinese visited a place outside China in 2006 ¨C not even a small fraction of these visited India. To the Chinese today, the most attractive tourist destinations are the European countries such as France, Italy and the UK as also Australia.
How can India start to attract the Chinese tourists? There is a seed of a perception which could be exploited - according to a survey of Chinese attitudes towards different countries, while as a country with rich culture and traditions, the Chinese are proud of their own place ¨C India and UK are at the second place. This perception of culture and tradition could be built upon to attract the Chinese tourists. While the Chinese material needs are being satisfied, little sustenance is available for their spiritual needs. Yoga is already a bond (albeit still a weak one today) which attracts the Chinese to India, as thousands of Chinese have taken to yoga it all its forms and exotic variants. These elements of Indian tradition and culture could be effectively marketed to attract a fair share of the Chinese tourists.

Software

In the field of computer hardware and software, US is the clear leader in the Chinese minds - India is rated next - though a distant next. However, a foundation already exists for India to exploit this image with a mild recognition that the Chinese give to Indian software expertise. Perhaps this is one area that the Indian software companies are already acknowledging and have taken steps to exploit. Infosys, TCS and Satyam have set up development centres in China and are gearing up to carve a share in the huge domestic Chinese software market. Chinese service industry is still in a primitive state in China and to grow and enhance its quality, software is perhaps one of the more important tools that it needs. Indian companies are in a good position to carve out a niche for themselves in this market - provided they build further on the existing image, make their presence felt in China and invest in learning about the needs of the Chinese industry.

Managerial expertise

While the economic growth of China is clearly because of policies of the Chinese government, the Indian acceleration is perhaps in spite of the Indian government. The Indian growth is clearly attributable to the private sector and their ability to efficiently exploit both the domestic opportunities and the export potential of Indian services. On the other hand, the big corporations of China are still largely state owned behemoths. The growth in the size and profitability of Chinese companies and the huge Chinese banks, is not because of their skills and innovation, but because of their monolithic position coupled with increasing money in the hands of the Chinese consumers. Few Chinese have heard of the Tata's and their purchase of global companies and brands or the Amban¡'s who seem to be expanding their skills to touch every area of Indian life. A knowledge in China of the proficiency of Indian private enterprise and the skills and expertise of the Indian manager, will create a huge opportunity for Indian talent and businesses.

Entertainment

Karishma (translated into Chinese as Qi Ji or miracle) has been on the air on several Chinese television channels. A few other Indian serials have also hit the Chinese television. The most popular Asian cultural imports in China are, however, Korean. Korean films, television drama and music are a rage in China (as they are in many other Asian countries). Korean films and drama, offer plots of family intrigue and romance, that are quintessentially Indian, indicative of the fact that Indian storylines and plots are likely to appeal to the Chinese audience. In fact Indian entertainment industry, given their experience and expertise could even develop special programmes for the Chinese audience. India is in a better position to do this than any other country - both in terms of the technical prowess and creativity, as well as their ability to understand what will move their Asian neighbours.

Education

While India has always prided itself on its education institutions, the irony is that Indian students are coming to China for higher education in medicine and there is practically no reverse flow. Indian Institute of Science at Hyderabad gets more MBA applications from Asia than any other management school other than Harvard. Indian Institutes of Management and Indian Institutes of Technology are often rated as among the best in their class globally ¨C a fact that India could gain tremendously by advertising to the Chinese. Chinese are travelling all over the world in quest of higher education, often enrolling themselves at poor quality institutions in obscure locations. While it is true that India is hardly able to meet the demand of its own citizens for high quality higher education, attracting international students is sorely required to raise the profile of Indian education. India needs to actively market its education institutions in China. While success may be limited in the short run, the long term potential is extremely attractive.

Need to create the Indian image and identity

Chinese do not have a high opinion of Indian products. For quality products they look up to Germany, the US and Scandinavian countries. When it comes to perfumes and luxury products, they think of France and for consumer electronics Japan and Korea dominate their thinking. However, India has a foundation of an opinion which could serve as a basis for creating a unique image and identity for India and what it can offer to China. India stands to gain immensely from embarking upon this effort - or in omitting to do so faces an enormous opportunity cost of further growth and international prominence.

A Porcine Issue

2008-03-11T09:34:00Z

Pigs in china

China Daily, the leading English language daily newspaper in China, reported some time ago that a hog weighing more than 1,040 kg was crowned the "king of pigs" in Ningxiang County, Hunan province over the weekend. To the best of my recollection, PG Wodehouse, while describing the adventures of the Empress of Blandings, never really mentioned her precise weight, but it would perhaps be a fair assumption that Lord Emsworth would have been proud of this achievement, if his own sow had reached such heights (or weights, to be more precise).
The story on the fattest pig is not the only porcine story in the Chinese papers. In fact, pig and pork have been extremely salient in china for some time. China¡'s consumer price index (CPI) jumped 4.7% in 2007, with the price of food showing particularly ballistic tendencies. Specifically pork prices almost doubled last year due to short supply and mounting feedstuff costs. Apart from rising prices for grain used as feed, blue ear disease - also known as porcine reproductive and respiratory syndrome - killed a large number of pigs nationwide last year. As a result, the Chinese farmers, despite their love for pigs and their meat, were less enthusiastic in rearing them than in the past. The central and local governments plan to launch a concerted effort to rekindle their enthusiasm for raising pigs and boosting pork supplies. China is on a comfortable and steady growth path and maintaining stability ¨C whether it is in currency valuation, consumer incomes, political climate or pork prices ¨C is of the essence.

The year of the golden pig

Ironically the scarcity of pigs came in the year of the pig (there was no shortage of chicken in the year of the rooster in 2005, and no shortage of dragons is expected in the year of the dragon in 2012) - though rat population hopefully would be contained in the year of the rat which started this February. In Chinese tradition, each year is cyclically assigned one of the 12 animals, each of whom are believed to bestow some specific benedictions and character idiosyncrasies on the humans born in that specific twelve month period. The year of the pig is one of the more cherished ones and thought to bring luck, prosperity and ampleness (like itself). A person born this year is likely to be intelligent, honest, courageous, gallant, and sincere. They are good implementers can be relied on to see things through. They also tend to be popular and make lasting friendship and are good neighbors.

The years also rotate through five elements of metal, wood, water, fire and earth ¨C and when pig and metal (gold really) coincide (as it was believed to have happened this year) the floodgates of fortune are expected to open like never seen before (or only seen 60 years ago, as that is when it would have occurred before).

It was under this expectation, that the youth of China timed their sexual activity to ensure the arrival of their off-springs in this auspicious period. It is reported that this year saw the birth of a lot more babies than the previous years. Of course, none thought about the pressure it will bring to the lives of the Chinese obstetricians, who were getting used to an easy life, thanks to China¡¯s one child policy. Similarly, the supply of maternal beds and other wherewithals related to child birth are also reported to be strained. On the happier side, figures indicate that the companies manufacturing diapers, baby foods and other goods of "little" interest upped their advertising and reaped generous rewards.

The marketing opportunity

Marketing companies often struggle with the extent to which they need to balance their global strategies with the subtleties of local culture and traditions. The fervent communist era in China and the cultural revolution did its best to liberate the Chinese from the shackles of their traditions and beliefs. However, the interest in Chinese Zodiac, the strong beliefs about lucky and unlucky numbers (most Chinese buildings do not number the 4th floor, as number 4, because of the similarity of its Chinese pronunciation with death, is believed to bring misfortune) and the increasing enthusiasm with which Chinese traditional festivals are celebrated, seems to suggest that companies will be well advised to take cognizance of the traditions, and develop their marketing campaigns to take advantage of the consumer interest in these. The more marketing savvy companies in China are already launching special communication and marketing campaigns around traditional festivals. The festival related marketing activities are likely to receive a further boost from the recent government decision to declare three additional holidays for the Chinese festivals of Tomb-sweeping day, Dragon Boat festival and Mid-autumn festival.

The fattest pig in China

While marketing companies deliberate on appropriate strategies to win the hearts of the Chinese consumers, it is reported that the owner Xiao Shahong of the Chinese ¡°king of pigs¡± apparently declined an offer to part with her precious animal, at a record of more than 50,000 yuan ($6,730). It is befitting that the prized pig is preserved, loved and cherished while the Chinese just finished celebrating the last few months of the year symbolized by it.