"Figuring that the average monthly household income for urban families starts at $370, my hunch is that at least 25% is spent on kids," said Yong Yuan, group account director, JWT, Shanghai.
The influence of these trendsetters starts at birth, because of the government's one-child policy to slow population growth. Known as "little emperors," these only children are doted on by parents and two sets of grandparents. But today's teens also grew up while China's economy skyrocketed, introducing Western products and experiences ranging from a Starbucks in Beijing's Forbidden City to a Sony Gallery in the heart of Shanghai's retail district. Their exposure to, and acceptance of, foreign brands, combined with relatively high disposable income, has made Chinese youth a magnet for marketers.
Connecting with this fickle, disoriented demographic, however, is even harder in China than in developed markets, because many kids still juggle traditional family values and responsibilities with new freedoms and choices.
China's GenY population is the most globalized in the country's history, but "they are not becoming Western. You don't scrub away 5,000 years of Confucian values with a couple of ads for McDonald's and Pepsi," said Tom Doctoroff, JWT's area director, Northeast Asia & CEO, China in Shanghai.
"On the other hand, China is not static. Conflicts are developing from the economic and social changes at work, namely the rise of capitalism and China's one-child policy. This generation has more choices than at any other time in China's history, but they're not entirely comfortable with those choices yet. They want to express themselves, but only in a safe, socially acceptable context. In a regimented society, the leading goose gets shot down," he said.
JWT recently created a TV campaign for Nike that reflects this culture clash with images of young consumers playing sports in spontaneous, unconventional ways, such as a schoolboy spinning a globe like a basketball in a classroom behind the teacher's back. The ads resonate with Chinese youth by advocating cleverness over muscle as a means of advancement in a regimented society.
"You have to be a good kid to be a trendsetter in China, even in fashion and other lifestyle areas," said Shanghai-based Li Yifei, managing director, MTV China. Kids may bleach their hair, but only because their friends are doing it too. Rebellion isn't fashionable, "because Chinese teens are still worried about doing well in school and pleasing their parents."
Taking into account the respect young consumers feel for their family, peer groups and country as well as their cautious desire to express both their individuality and optimism about the future, experienced ad execs in China caution against using images of extreme individuality and rebellion that might appeal to kids in the U.S. Instead, marketers try to strike a balance between standing out and blending in, often by focusing on four major passion points: music, sports, fashion and technology.
"The pressure [on Chinese teens] is tremendous, especially as the country grows economically and the kids are positioning themselves to be in the best position possible. In this context, music, fashion, sports and technology, specifically online games, are where kids get to express themselves," said P.T. Black, a partner in Shanghai-based youth research consultancy Jigsaw International.
Marketers like Pepsi's Richard Lee (see Player Profile) have latched onto the popularity of music in China by sponsoring hot local bands and incorporating musicians into TV spots and product packaging. American-style hip hop also has emerged as a powerful form of self-expression for hip teens. The genre's development in China reflects its position in the U.S. in the early 1980s, but hip hop's success in China partly stems from the fact that it has attained tacit approval from the government. Unlike punk or grunge, it lacks an anti-establishment streak. "The Chinese hip hop consumer is open to Western styles, is curious and informed, has disposable income and is driving tastes and preferences, and this target population is growing," said Duane Kennedy, managing partner of Dai Biao, a Shanghai-based media company with an emphasis on hip hop entertainment.
Although Chinese kids idolize David Beckham , "soccer is the wrong strategy to influence Chinese kids. Today, it's basketball, clearly the No. 1 sport for the 25-and-under age group," said Abel Wu, Beijing-based marketing director for Li Ning, the leading Chinese sportswear brand. "It's cool, can be tied in with hip hop and it's a safe, socially acceptable outlet for expression," said Mark Fisher, managing director, China for the National Basketball Association (NBA) in Beijing. Plus, Houston Rockets star Yao Ming is overtaking Bill Gates as the role model for millions of Chinese kids who dream of striking it rich in America.
China has the fastest-growing mobile phone market in the world and tens of thousands of cyber cafes. "There are millions of blogs in China and online chatting is bigger here than in any other country, because people can say what they want to in an anonymous way," said Mr. Doctoroff. China will "probably be the biggest online game market in the world next year; this is an exploding passion point," said Shanghai-based Ilan Sobel, Coca-Cola's general manager, strategic marketing and innovation for China, so marketers "should be familiar with popular online games like World of Warcraft if you are targeting teens in China." (See related story in July issue)
Although not as broad as sports or music, fashion allows for self-expression and blends well with other pashion points like hip hop. Urban Chinese kids, especially girls, love Fashion TV and the endless fashion catwalk shows on local youth channels. "They learn about classic fashion icons like Coco Chanel and see in these brands the values they want," said Mr. Black. "Then they see themselves as Chanel women, even though they have limited means and own nothing luxury. These brands do a great job in China of communicating a very clear and elegant set of values."
Another challenge facing youth marketers in China is understanding the differences between rural and urban consumers. China is carved up by marketing execs into "tiers." The distinctions are not geographical, but rather based on population, sophistication and income levels. Tier one includes Beijing, Shanghai and Guangzhou, while the lowest, fifth tier covers rural towns and villages.
In the past, marketers might have run a polished, edgy spot in Beijing and Shanghai, supported by a more mass market, and earthy ads in the bottom tiers. These days that approach is fading. Kids in the provinces are not at the same level of self-expression yet, but through exposure to TV, the Internet and other forms of mass media, they are catching up quickly. The best approach today? "Don't talk down to Chinese kids, don't underestimate their information networks and go for the best production standards, the newest technology, the coolest celebrity," advised Mr. Black.