Q&A with Cynthia Chan

Hong Kong author studies Chinese youth

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Hong Kong native Cynthia Chan, strategic director at the Cheskin consultancy, co-authored China's New Culture of Cool: Understanding the world's fastest growing market with colleagues LiAnne Yu and Christopher Ireland. The book profiles youthful trendsetters whose collective actions are the leading edge of change in China and a strong force in the world’s economy.

Ms. Chan, a market research and consulting expert who has worked in mainland China, Japan, South Korea, the U.S. and Germany, specializes in capturing and uncovering consumer insights through a range of qualitative and ethnographic approaches.

She recently spoke with AdAgeChina Editor Normandy Madden from her home in San Francisco about the values motivating China’s new urban middle class, particularly more than 200 million consumers under the age of 30 who live in China’s largest cities.

AdAgeChina: How did the book come about?

Cynthia Chan: We did a lot of research about China for our clients and gained an understanding about consumers there, particularly China’s urban culture from the point of view of researcher and ethnographer, not business executives. There are a lot of books now out about China, but only a few touch on people and talk about them in an insightful way. We felt that angle was missing.

AdAgeChina: A lot of new factors are shaping China’s middle class, like higher incomes and access to foreign products and styles. Has this led to a gap between China’s modern, urban and rich consumers vs. more traditional lifestyles and poorer, rural Chinese?

Ms. Chan: We didn’t see a gap in between but more a new fusion between modernity and the old traditions, and in rural and urban Chinese. It’s more of a mixture. New cultures are formed that way and feed into how Chinese live their life and what they choose to buy and consume. These hybrid cultures shape their decisions, but it’s not a clash between old and new.

AdAgeChina: Young Chinese are more comfortable in these new hybrid cultures and with new technology like mobile phones and computer games. Has that led to problems between youth and their parents and grandparents, who had such a different experience growing up in China?

Ms. Chan: No, and that’s because we’re talking about China’s “singleton” generation, the product of China’s one-child policy. They have always been spoiled by parents, grandparents, aunts and uncles. Instead of clashing, all the relatives are listening to the young people. Even if older people don’t agree with them, they try to understand them and communicate with them. Socially it’s a good thing, even though they put these kids up on a pedestal and made them really spoiled.

AdAgeChina: What makes a youth brand cool in China?

Ms. Chan: First, the concept of “coolness” is appreciated but it’s still being shaped. It’s a word in China with a very short history. But this generation has a hunger for new things. They are a generation of explorers and they are adventurous.

AdAgeChina: Why are they so adventurous compared to older relatives?

Ms. Chan: They were trapped for so long. China didn’t open up until the 1980s, but with foreign brands becoming popular, they have more options and they want to try new things, unlike their parents.

AdAgeChina: How can marketers tap into what’s cool to appeal to these kids?

Ms. Chan: Like anywhere else, the foundation for the best marketing plans are in a 360 degree understanding of what motivates consumers. Young Chinese are no longer attracted by functional benefits of products, they are looking for experiences that are meaningful to them. Advertisers have to understand what motivates them and what’s meaningful for them. Unlike in their parents’ time, food and shelter are no longer on their mind. Instead, things like fashion come into play as a form of personal expression.

AdAgeChina: Can you give other examples of what’s meaningful for Chinese youth today?

Ms. Chan: Take going to restaurants. It’s no longer about getting food to keep you from being hungry, it’s a place to hang out with friends, more of a social activity as well as being adventurous and exploring other parts of the world through different cuisines.

AdAgeChina: Which marketers have been successful at making their brands cool?

Volkswagen has done a good job with Polo, which appeals to young consumers. It’s a small compact car, good for young people to get around, plus the models come in fun candy colors like bright green and bright yellow.

Another is QQ, an instant messenger MSN-type service that has been pretty successful. They appeal to young Chinese in a way that tells them, “We know you, your culture, what you like and what your aspirations are, so here are products and services you’ll want.”
Also, Baidu.com, one of the most popular search engines in China. They were the first to introduce complicated searches in Chinese and searches for MP3 songs.

AdAgeChina: What’s the most misunderstood thing about modern day China by outsiders?

Ms. Chan: There are a couple of myths going around. One is that it’s just a copy-cat market. Outsiders don’t realize the design discipline is gaining exposure. More design schools are being set up in China and multinationals are setting up R&D centers there.

Another is the idea that young people love everything foreign/American, but we found that may not be the case. Consumers are looking to local brands as well, and also to other parts of Asia, like South Korea. Seoul is the next Tokyo as a source of fashion aspiration.

And Chinese consumers make one-tenth of what Americans make, so people here often think Chinese will only pay one-tenth the price for the same things, but purchases also represent status, so they’ll pay the same for things like mobile phones that can give them status. Plus those “singletons” have money from different sources. They do have cash to spend, thanks to parents, grandparents and other relatives.

And finally, outsiders overestimate how influenced young Chinese are by Confucianism. Many are more concerned with self-expression and showing individuality with their consumer choices. They don’t want to stay in a pack anymore.

AdAgeChina: For marketers then, what are the biggest factors to take into consideration?

Ms. Chan: There is a Chinese saying, “Yi shi zhu xing,” which means, “Clothing, food, living and mobility.” Our book is divided into four sections based on that saying, as a way to talk about how urban youth live their life in those four different theme areas, because they’ve elevated it from functional level to a more lifestyle level that relates to meaningful experience. So “living” also relates to things like design and the internet, and mobility involves commuting as well as travel. These four elements are all important.

AdAgeChina: How pronounced are regional differences in China?

Ms. Chan: There are big differences, China can’t be approached as one huge market where everyone speaks one language. They have to understand regional differnces, eating and consuming patterns, unique subcultures and language differences. These impact what products they want and how they consume them. Local competition also changes. Local brands tend to be bigger in the smaller cities. Advertisers need to understand these differences to adapt executions.

AdAgeChina: What did you learn about China that surprised you?

Ms. Chan: Definitely how fast China changes. While the book showcases lifestyle sand consumer behavior, we do include some data, but the numbers of things like mobile phone penetration and disposable income kept changing as we moved along, that posed quite a challenge. I knew it was growing, but what surprised me was how fast.

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