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[Ivyman]

Hi Everyone,

I'm curious as to what Chinese consumers want, especially given that they have more money than they did a generation ago.  (Do they want more clean water, better quality food, education, transportation, etc.)?

Yes, I can get factoids via research reports.  But, I'd be more curious, given your guys' on-the-ground knowledge of where the action is.

Thanks

[Pashley]

I'm curious as to what Chinese consumers want, especially given that they have more money than they did a generation ago.  (Do they want more clean water, better quality food, education, transportation, etc.)?

Brand names are a big deal. Louis Vouton does well, Rolex, BMW, ... You see young couples out on a date going to McDonalds because it is sophisticated and Western.

At one point, I read that Hong Kong had more Rolls Royces (per capita?) than any other city. I've seen none here, but two Bentleys, a few Ferraris, one Lambo, some Hummers, lots of BMW & Audi, ...

[Raoul F. Duke]

Geez, the whole world is trying to learn what Chinese consumers really want.   I can at least tell you that marketing in China, especially B2B, is VERY different from the West...and that importing to China, when it can be done at all, is laced with pitfalls.

One example: the Chinese government requires that some products be sold to certain industries on 100% credit...and selling on credit in China is usually a terrible idea...

[Escaped Lunatic]

They truly love authentic brand name products.  Things like Niky sportswear, Rollex watches, Aple Iphanes.

[The Local Dialect]

I think if you can provide them with a service, rather than a product, you'll find it a lot less hassle. I have friends who have done well for themselves providing

Just for the sake of it though ...

Brand name clothing is always in high demand, and Western brands, even not so high end stuff like H&M and The Gap, is really popular. The H&M stores here are always packed, huge lines, their racks demolished. Gap is more expensive here than it is back home, relative to income, but the stores here do brisk business. The interesting phenomenon here is that these are low to mid-range brands back home, but here they have become high end simply because they are foreign. Lots of the clothes at these stores are manufactured in places like Vietnam or India or the Phillipines, and while surely the sweatshops in these places are not much different from Chinese sweatshops (possibly worse even), there's a novelty to having your clothes *not* come from China.

I'm a mom so I notice that imported baby stuff is in huge demand. Parents here will spend much more on their kids than they'd ever spend on themselves. Imported formula, diapers, organic bath products, Graco strollers, name brand kids' clothes. This stuff has a dual appeal because there's the status symbol stuff but also, Chinese products have a reputation for being poor quality and dangerous, and middle class Chinese parents, with their 1 child only, do not take ANY risks when it comes to their kids. 

Yes, electronics like iPhones and nice cars are popular but those are huge markets that are pretty much already cornered. I don't see how there's much opportunity there for anyone to make money that isn't already being made, especially someone just starting out.

[Ivyman]

Thanks, guys.

It sounds like services are the big way to make a profit.  (Including, of course, teaching English to their sacred one child).

Educational consultancy (i.e. getting their one child to a top foreign school) is even better.

Failing that, products like consumer foods and goods are nice.

Thanks

[The Local Dialect]

I just realized I left that last thought there hanging.

I was going to say I have friends who have done well for themselves providing services, things like consultancies, cafes/bars, guesthouses, and translation companies. I even have a friend who opened an architectural firm. There's a lot you can do in China outside of import/export.

[Raoul F. Duke]

Especially given that seemingly 4 out of 5 Chinese, and their dogs, seem to be trying to scratch out a living doing ExIm work. There are indeed opportunities in services, but most require real expertise and experience in order to operate credibly.

[Escaped Lunatic]

Educational consultancy (i.e. getting their one child to a top foreign school) is even better.

If the connections are there, this has potential for profits.

[El Macho]

Educational consultancy (i.e. getting their one child to a top foreign school) is even better.

If the connections are there, this has potential for profits.

And if the connections fail to deliver, the parents will request a refund. It can be a dicey proposition, especially for someone going in making big promises.

There's a relatively recent book on the topic of what Chinese consumers want: The End of Cheap China. It's an interesting read with a relatively strong pro-China bias.

[The Local Dialect]

Educational consultancy (i.e. getting their one child to a top foreign school) is even better.

If the connections are there, this has potential for profits.

And if the connections fail to deliver, the parents will request a refund. It can be a dicey proposition, especially for someone going in making big promises.

There's a relatively recent book on the topic of what Chinese consumers want: The End of Cheap China. It's an interesting read with a relatively strong pro-China bias.

Yes, the better/more reliable consultancies (and schools even) will offer money back guarantees to their students. New Oriental has been doing this for ages.

Of course when you're going into a money back guarantee thing you're signing a contract with the company. They are going to have stipulations -- you miss more than X amount of class, no money back, that sort of thing. College applications -- you don't follow our guidelines to the letter, no money back for you. And if you're working with good students, it actually isn't that hard to get them into good schools.

One of my students was telling me about a consultancy here in Beijing that guarantees students placement into a top 10 school in America or their money back. Their fee is 500,000RMB. So the thing is, even if they have to give 5 students their money back, if they get even one student in, they're still making boatloads of profit, since the overhead for this sort of work is not all that high. The top schools thing is sort of self-selecting too because high achieving Chinese students are VERY good and actually deserve to get into the schools they're applying to. Most of us don't generally get to work with China's creme of the crop but these kids are sharp. Non native speakers and they're scoring 2200, 2300 on the SAT. These sorts of kids would get into a good school even without a consultancy, the consultancy just gives them an extra edge -- works connections (and these aren't even the main thing), polishes their application essays, gives them bonus classes and some opportunities to beef up their application. And parents are willing to shell out big bucks for it because college applications are the real deal and these kids have decided to forgo the Gaokao, so this is it for them. Quite possibly these kids even don't really need a consultancy, they'd get in no matter what, but the parents are just not willing to take any chances.
Another big thing these days is sending middle and high school students to boarding schools in America. I've polished quite a few applications for 13 and 14 year olds hoping to go to prestegious feeder schools for prestegious colleges in the States.

I think there's a lot of money to be made in educational consultancy personally, but you do have to know what you're doing and be able to produce results. Word of mouth counts for everything. Get one kid into an Ivy and watch business take off.