China as a market: what is the real market for international brands?

To hear talk about China as a market of more than 1,300 million individuals still sounds incredible today, although companies with a presence in the Chinese market, such as Bodegas Torres, Mango and L'Oreal know otherwise. In meetings with executives from European firms, the most common question asked about the Chinese market remains: What is the real market for international brands? In numerous studies, Chinese consumers are defined as pragmatic, price-sensitive, quality-oriented and patriotic. But we must bear in mind that there are several segments within this market and each one behaves differently with respect to international brands. Based on a review of specialist literature, the aim of this article is to further explore the behaviour of Chinese consumers in urban areas, with a view to making a proposal for a new market segmentation. The article also seeks to identify characteristics of brand awareness for each market segment. To achieve this aim, the author has carried out an exploratory study using secondary sources and in-depth interviews in Shanghai, Beijing, Guangzhou and Hong Kong with: - Western companies with a presence in the Chinese market; - Consulting firms and research institutes with a presence in China; and - Chinese Business Schools.