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Some people say that the 2000-2001 energy crisis in California was caused by MBAs. Highly qualified, highly paid business managers who had no clue about the technologies and engineering that underpinned the power that they were trading and re-trading. I hold the same view with marketing people who have done business degrees and then do a masters in marketing but never learn the nuts and bolts of the industries they work in. If marketing is to begin deep inside the business in the development of products and services that actually meet the needs of consumers then a marketer needs more than just marketing skills.
So it was good to hear that it was a mechanical engineer with a marketing masters degree who was presenting recent market research done by auto leather tanner, Eagle Ottawa on Chinese consumers' attitudes towards leather in automobiles. As China has developed, faster than any other country in the region, and with a population equivalent to the size of the whole world just a couple of centuries ago, the consumption of western “toys” as the middle class grew to some 400 million has just been incredible.
But assuming that this growth will continue in a straight line, and in the same way is making a major error. Anyone who has bothered to watch the Chinese consumer market even from a very basic viewpoint will have seen that the changes to society from the Mao era where people were denied education to recent years where we have many very well educated young people from wealthy industrial or administrative families are almost beyond imagination. Each passing few years the young people have quite a different attitude to life given rapid changes in family background, living conditions, education and the increasing role of consumerism in Chinese society. If you have not been trying to keep up just read, All Eyes East by Mary Bergstrom.
Change happens in China faster and in different ways
As populations advance in terms of industrialisation, education, wealth and urbanisation we see big changes in the way that they consume and choose to have children. As families get a little wealthier and move into cities they tend to have much smaller families, and to buy fewer cars. The latter is especially the case if public transport is good. Hence when we see studies about global peak teenager numbers having been passed in 2006 and declining car ownership in some regions of the US and the EU we cannot just say that this is many years away in China.
We heard fair organiser Michael Duck tell last week's ACLE show in Shanghai that e-commerce was now driving past western numbers in popularity just two years after a Debate at Fashion Net Asia indicated that the Internet was not going to affect the Chinese High Street for a long time. Instead we have to use China to understand how the trend might impact the rest of the world.
Similarly with luxury goods we like to assume that the Chinese only buy luxury goods to demonstrate status and to show off. That might well remain true if those leaving traditional agriculture to start a business but it no longer holds as the sole driver of luxury growth. Even the same KPMG report that indicated significant steady future market growth for luxury in China made it clear that motivations were moving from the ostentatious to the experiential. Self-reward, reflecting good taste, connoisseurship, individuality, and for the joy of using all start to show high on purchasers lists. China is not necessarily going to turn into a city of conspicuous consumption.
We are certainly due more formidable growth but it will have strong Chinese characteristics. And many of those characteristics came across in the Eagle Ottawa study. Treat the Chinese consumer as you would a middle class westerner and you will fail.
About the author
It is now two years since Mike Redwood was asked to become the spokesperson for Leather Naturally! This voluntary role fits well with Mike’s long held belief that the leather industry needs to become much more consumer oriented. Redwood has a portfolio of jobs. He works with the newly formed Institute for Creative Leather Technologies at the University of Northampton and teaches marketing at the University of Bath. Before transferring into marketing Mike trained and worked in the leather industry as a technician and tannery manager in the UK, Italy and Latin America with a number of major businesses such as Barrow Hepburn, ADOC, Pittards, Gruppo David, FootJoy and ECCO.comments powered by Disqus