Reaching China's youth a balancing act

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[Shanghai, China] Urban Chinese teens download hip-hop tunes to trendy Nokia cellphones, guzzle icy Cokes after shooting hoops in Nike shoes and munch fries at McDonald's after school. Does that mean they're just like kids anywhere in the world?

Definitely not, according to speakers at the China Youth Marketing Forum held late last month at the Westin hotel in Shanghai.

Although the current generation of kids is the most globalized in the country's history, "Chinese youth 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 Shanghai-based Tom Doctoroff, area director, Northeast Asia & CEO, China at WPP Group's JWT.

"On the other hand, the market is 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," he said.

There are 20 million university students in China right now, said another speaker, Li Yifei, Shanghai-based managing director of MTV China. "They want to be cool. Many of them have dyed hair and piercings, some even like bungee jumping. But they are still worried about doing well in school and pleasing their parents. You have to be a good kid to be a trendsetter in China, even in fashion and other lifestyle areas."

The forum, sponsored by Kid Power Xchange, a division of International Quality & Productivity Center and Viacom's MTV Networks Asia and Nickelodeon divisions, drew about 150 marketers, who explored the values and spending habits of Chinese kids, teenagers and young adults.

They present a promising and lucrative market: Chinese between the ages of 8 and 24 have annual incomes worth $40 billion, according to Eguo Interactive Media. In the mainland's five largest cities, half the total family income is spent on goods for children. Monthly consumption by children under 12 exceeds $422 million, according to China Mainland Marketing Research, and in Beijing alone, the figure has reached $169 million.

Successful advertising for youth brands carefully navigates the respect young consumers feel for their family, peer groups and country with their cautious desire to express individuality. To straddle this internal conflict kids feel, especially in the largest cities, marketers should avoid images of extreme individuality and rebellion that would appeal to American kids.

"China is undergoing a rapid transformation from collectivism to individualism. We need to strike the balance [between] standing out and blending in," said Ilan Sobel, Coca-Cola's Shanghai-based general manager-strategic marketing and innovation for China.

Marketers such as Coke, McDonald's Corp. and the National Basketball Association, which represents an enormously popular sport in China, achieve this balance by focusing on four major passion points: music, fashion, sports and technology such as mobile phones, games and Internet cafes.


Coke, for example, has teamed up with a popular girl band in China called S.H.E., athletes like Liu Xiang and the current video-game hit in China, "World of Warcraft" which it combines to hit two or three passion points at the same time.

A TV campaign features Mr. Liu and two other male celebrities trying to win the hearts of S.H.E.'s three band members. Later this summer, packaging on plastic Coke bottles will feature the female musicians dressed in gladiator-type WOW outfits. And the U.S. beverage giant has decorated thousands of cyber cafes around China with promotional stands and posters with WOW and Coke branding, which have driven up Coke sales in the cafes by up to 30%.

The cafes are particularly important, according to Mr. Sobel, "because China will probably be the world's biggest online gaming market in the world by next year. This is an exploding passion point."

Music, particularly American-style hip-hop, has also emerged as a powerful form of self-expression.

Hip-hop's development stage in China is very similar to where it was at in the U.S. in the early 1980s. Its success in China partly stems from the fact that it has earned tacit approval from the government, thanks to the genre's lack of an anti-establishment attitude like punk or grunge, according to speaker Duane Kennedy, president of L.A.-based Ubiquitous Entertainment, who recently relocated to Shanghai to start monetizing hip-hop in China through marketing alliances.

Besides interpreting the values of teens vs. their counterparts in Western countries, a major challenge facing youth marketers in China is understanding the differences between rural and urban consumers. China is widely carved up by marketing executives into five "tiers."

The distinctions are not geographic; they are based on the population size of Chinese cities, as well as the sophistication and income level of their inhabitants. Tier one includes Beijing, Shanghai and Guangzhou, followed by large cities, small cities, towns and finally, in the fifth tier, rural villages.

In the past, marketers such as Coke would run a polished, edgy spot in the top one or two tiers and an earthier ad in the bottom tiers.

These days, said some forum speakers, that approach is fading. "They are not at the same level of self-expression yet, but the third- and fourth-tier markets are coming up quickly," said P.T. Black, Shanghai-based partner of the research consultancy Jigsaw International.

Tao tips

What you need to know about marketing to young people in China

* There's substantial spending power there. Chinese between the ages of 8 and 24 have annual incomes worth $40 billion

* Avoid images of extreme individuality and rebellion. Chinese youth want to express themselves, but in a safe, socially acceptable manner.

* Cater to their four "passion points": Music, fashion, sports and technology.

* Don't rely on the traditional segmentation model. Marketing executives usually vary messages to the country's five "tiers," led by major cities at the top, but that's equalizing as the lower tiers grow more sophisticated, thanks to TV and the Net.

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