Issues with Conducting Market Research In China

Issues in Conducting Market Research in China

a. Size of the country

China’s geographical component covers a land mass of almost 9.6 million square kilometers. The overall Chinese territory is covering a huge part of Eastern Asia with traditional practices varying greatly between provinces affecting trade and political ideologies. Considering its massive land size, Market Researches in China are definitely difficult to perform. Conducting interviews and surveys on different areas of China requires long distance travel that proved very costly and time-consuming. Most of China’s provinces lie in inner regions facing Northern and Western parts of Asia while there are only few coastal cities and provinces of the country.

b. Percentage of market change

For the last two decades, China has recorded an average GDP growth rate of around 10%. China’s tremendous growth in manufacturing industry has been responsible for its global economic success. China’s 12th 5-year plan issued in 2011 projected a 7 percent annual increase in GDP. Specific details of the plan include the development of regions in the Western part of the country and addressing to sustainability issues that seeks to improve quality of Chinese life. Since 1985, China has been consistent economic performer averaging 27.7 percent increase in exports and 30 percent FDI until 2008. This rate of market change of China is dramatically making history and countries like Brazil and India are the only countries that can be used for comparison, making Market Research procedures difficult.

c. Old, dubious, or inaccurate supply of secondary information

The study of Oliver and Coulter in 2004, argues that primary research is the most extensive, reliable and useful approach to research than secondary research. However, because of the high cost involved and the extensive time needed in conducting primary research, Market Researchers in China tend to favor the use of secondary research information. Secondary data are gathered and collected from experts of academic institutions, government, and industry associations who are credible in providing insights on market trends and regulations. Although these experts have greater advantage in developing research studies, they cannot be solely relied as credible source of information on the consideration that some of their data are outdated on current market trends and other information.

d. Fragmented and diverse industries

China is organized on a vertical structure, having different ministries for different industries. Each ministry gathers its own data related to the industry they are in control of. Considering varying information on multiple industries, Market Researchers in China are left with the trouble of interpreting or analyzing enormous data and compare these data for multiple market cycles over long periods to produce a convincing conclusion. This is a hurdle for Market Researchers in China as these results to higher research expenses requiring wider time-frame.

e. Unreceptive nature of people and organizations to respond to research inquiries

The unreceptive nature of Chinese subjects to respond in surveys and interviews make Market Research in China difficult. They tend to answer vaguely or respond in a way that affects fruitful outcome of research. Chinese subjects respond by indicating their own ideal perception of China’s markets rather than a truthful representation of reality. This practice can be traced from Confucian ideologies which provide guidance on how Chinese locals should handle their lives and interact with society, government, and their families. Moreover, with the practices of communism embedded in their culture, they are reluctant of establishing social ties and relationships. Another reason is that Chinese businessmen and local consumers are less interested in market research projects. For most of them, this activity would cost their time and effort without any expected benefit.

f. Cultural issues

The conduct of marketing research is influenced by various elements especially those that relate to culture and traditions. The diverse nature of the socio-cultural inclinations of people across the Asia-Pacific Region makes research in China to be demanding and at the same time rigorous. As Hofstede (1984) describes, majority of Chinese indigenous groups are by nature collectivist. In short, decisions are based on what family, society, and organizations believe is right above all personal considerations. Market Researchers in China have to address this concern and come up with viable options to perform Market Research. A study on how the Chinese manage their ways of living would be favorable of the researcher on matters of preparing himself for fieldwork. Alternatively, in order to address the issue on cultural differences in conducting Market Research in China, researchers need to tailor their approaches so that research instruments and administration procedures fill the gap of cultural differences in the specific localities in China.  Researchers will have a challenging role in the preparation and development of research instruments that addresses the specific cultural issues for each market segments in China.

Another cultural issue faced by Market Researchers in China is on how Chinese subjects reply to questions. Data gathering through qualitative research put more reliance on ideas rather than facts and statistical congruence. The Chinese, being ferociously honest with what they know and what they do not know favor much on facts than on feelings and perceptions. Moreover, in an empirical study in 2002, Chinese managers are found to have a bimodal response in inquiries or surveys. For example, Chinese respondents tend to answer simple questions with widely accepted and time-tested options that have Confucian influence and dismiss options with opposing standpoint. On the other hand, for complex questions with ideographic characteristics requiring analytic judgment, Chinese managers tend to respond more likely with modest answers having a mid-point bias.

Furthermore, eastern culture including that of the Chinese’ has differing views with Western culture and practices. It is therefore noteworthy to consider the appropriate ways of choosing the type of questions that will be used in surveys. Chinese subjects seem to be focused on how things are done more than what is aimed. With this perception, results of Market Research in China are best obtained through a long and tedious process of checks and process repetitions.

g. Communication issues

Understanding various local languages in China enables Market Researchers to clearly execute the research task as misinterpretations produce inaccurate results. As an example, a Chinese word would mean different things depending on what context it was spoken and how it is used. Translating English questionnaires directly to Chinese could cause different interpretations. Thus, inaccurate responses and interpretations affect greatly the outcome of Market Research. The use of a talented Chinese intermediary is very important in conducting Market Research in China as they can correctly translate languages to local dialect and can offer help in contacting research subjects. Communication is the most common problem confronted by Market Researchers in China. Language barriers are affecting Market Research agenda causing failures of Market Research teams in coming up with objective results. It is important that research data are communicated on time and the delivery should be comprehensible, if it is to be useful. Data fades and changes quickly due to inherent and potential economic and technological decay or progress.

h. Local contacts

In conducting Market Research in China, knowledgeable local contacts help attain research aims. They provide insights on the best ways to contact local subjects and business associates. In the course of time and when trust is established, local Chinese counterparts begin to show signs of confidence and trust. Although hard at first, there is no other way except to build a strong reputation on the basis of one’s performance, related connections and reputation.

i. Professional respondents

Participation of professional respondents to a Market Research activity dislodges the objective outcome of research. Professional respondents are persons who take part in several market research projects in order to benefit from the gifts given by researchers. They tend to repeat their attendance in a single research project that causes inaccurate results. In other occasions, Market Researchers tend to connive with professional respondents to save time, effort, and budget. This practice affects the integrity of research outcomes considering the subjective nature of the outcome of such activity.

j. Socio-economic Classification (SEC) in China

China does not use social economicclass to classify its population. In the market research industry, we simply use Personal Income Level, together with some other filtering questions according to specific needs of projects.

The China government uses Personal Annual Income to do their research and analysis. Below is the data obtained from the most authorised government channel:

Personal Annual Income Personal Monthly Income
annual personal income – avarage 26,959 2,247
Lowest 10% 9,209 767
  10% 13,724 1,144
20% 18,375 1,531
20% 24,531 2,044
20% 32,758 2,730
10% 43,471 3,623
Highest 10% 69,877 5,823
Published by Statistics Bureau of China

As you know, China is huge and regional development level differs quite a lot. There are also some common ideas in this industry to classify social economic classes in different levels of cities:

Tier 1 cities (Beijing, Shanghai and Guangzhou) T2 cities (Provincial capital cities + some developed costal cities) T3 cities T4 cities
Class A >10,000 >8,000 >6,000 >4,000
Class B 6,000-10,000 4,500-8,000 3,000-6,000 2,000-4,000
Class C 3,000-6,000 2,000-4,500 1,500-3,000 1,000-2,000
Class D <3,000 <2,000 <1,500 <1,000

k. Representative sampling

Use of representative sampling is not a viable option in conducting Market Research in China. The country’s wide geographical boundaries developed differing economic conditions among provinces and cities. Taking a sample in Wuhan and reflecting the result to be the representative of all Chinese cities will turn out to become distorted information. Choosing one region to represent the whole of China in a Market Research is not a credible sampling method as industries critical to one region may not be true to another region.

l. Respect vs. efficiency

Respect is an important element of the Chinese culture. It is fundamental to Confucian teachings and local people value how they are treated especially by foreigners. Giving worth on how the local folks live, work, and play enables Market Researchers in China to become efficient in their duties. Respect to local customs, beliefs, and practices project genuine inner intentions for shared coexistence. The way Market Researchers in China values indigenous way of life echo the endearing hospitality of the Chinese.

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