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It is imperative to keep up-to-date with a Chinese market, a dynamic market which is so unpredictable, especially to the eyes of a western company. IBIS world estimates that the Chinese market research industry was valued at £35 billion as of 2016 and this figure has only increased in the last couple of years. Here we can take you through some questions you may have when it comes to conducting market research in China.

 

What are the risks with conducting market research in China?

First and foremost market research is about limiting your risks, so any risk of the market research process itself can be amplified without any market research process. We can categorise the risks into three. Firstly, the secondary data in China cannot be really trusted. The fast pace nature of the Chinese market coupled with its fragmented structure means up-to-date information is pressing to find. This means analysis of new and existing data is frequently carried out, however this data analysis is often conducted by inexperienced researches who don’t have a framework or a real understanding of how to conduct market research. We at Hub of China will never rely on secondary data for clients. Secondly, primary data is often not reliable. New businesses are arising and falling on a daily basis. The highly competitive environment means businessmen and women have become suspicious and unapproachable. When they do agree to speak, conservatism kicks in and key information about their business or company is difficult to obtain. Thirdly China is hugely diverse the habits of consumers in Chengdu in the south are very different to consumers in Beijing in the north. Conducting a few focus groups in Beijing is clearly not going to give an all encompassing conclusion as to the way Chinese consumers all over China act.

 

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What are the common methods to conduct market research in China

Quantitative research such as surveys and questionnaires are often used. The benefits of these methods are Chinese consumers are likely to be more honest filling them in, especially if they are anonymous. Chinese consumers will often be affected by the opinions of others around them, but if their opinions are confidential then they are less likely to hold back. CATI’s are also frequently used although they are less antonymous than surveys and so they can produce varied results.

Qualitative methods such as focus groups can often be extremely useful in finding out the why’s the how’s as well as being able to deal in real time with the unpredicted nature of some of the participants responses. Due to the unpredictability of the Chinese market some western companies will often not foresee the responses that participants give in the market research and therefore in a quantitative arena would be unable to follow up with more questions. With focus groups these findings can be followed up and one can really ascertain why they have responded the way they have responded.

 

What to consider before conducting qualitative market research in China

Ensuring participants are relaxed and feel the freedom to express themselves truly is paramount in any market research exercise. In China there are many potential barriers to this sought after market research environment. A couple of years ago we were conducting a focus group to ascertain the demand for a vegetarian recipe book. There was a mix of ages, a couple of elderly participants and three to four middle age to younger participants. After every question it was almost subconsciously agreed that the eldest participant would speak first and then the younger participants seemed to continually agree with whatever the eldest opinion was. This situation has partly come out of Confucianism and an inherent respect for elders in China. We use strategies to ensure that  participants don’t feel restricted in what they can say during a focus group.

Before entering the Chinese market it is very important to segment and do your research to find out the demand, price point and product/service viability. We can help you in conducting market research in China, email us on david.joseph@hubofchina.com for advice or a quotation.