Added Value releases The 4Gs in China to coincide with China 2009 GDP results

China achieved a world-beating economic growth of 8.7% in 2009 according to figures released today*.

That growth was achieved by the government fuelling domestic spend to counter the steep fall in overseas trade. Indeed, with the domestic part of the growth hitting 12.6% it represents the fastest growth in consumer consumption and investment in nearly two decades.

Although China will aim to re-balance growth in 2010 by cooling down the domestic market and cranking up overseas trade now that the western economies are in recovery, the sheer scale of domestic GDP growth will encourage overseas brands to target the Chinese consumer.

Brands beware: Added Value, the global marketing consultancy group, cautions brand owners against treating China as one market if they aim to exploit the opportunities.

Segmentation is onerous for brands because the Chinese market is so vast. A common mistake marketers make is to think overly optimistic about the population of 1.3 billion people and create a crude geographic segmentation. We believe that a more effective way is to identify their target consumer and then build an understanding of what drives trends in order to understand underlying patterns that motivate consumer behavior, says Mag Wong, CEO of Oracle Added Value, based in Shanghai.

To help decode this complex market and provide brands with a sound understanding of the Chinese consumer, Added Value has produced a detailed study titled The 4 Gs in China.

Core Facts

According to the report, one of the most useful ways of understanding the Chinese market is from a generational perspective. China has experienced intense political, social and economic change during the past four decades resulting in the development of four distinct generations in forty years. This is something hardly seen in other parts of the world, but China is such a fast changing market that it has created totally different generations or sets of consumers in this short space of time, adds Ms Wong.
FOUR GENERATIONS: The four generations are the In Between generation (born in the sixties); the Open Door generation (born in the seventies); the Take Off generation (born in the eighties); and the Flying Star generation (born in the nineties).
The In Between generation are most affected by the old China because they experienced significant hardship during the Mao Zedong era and this experience is translated into a feeling that they have missed out and has seen them become strivers.
The Open Door generation was part of the transformation of China and the first middle class to be produced on the continent.
The Take Off generation is the first to experience the effects of the one child policy designed to limit population growth, and they are often referred to as the new strivers.
The Flying Star generation is much freer than their ancestors, take greater risks and largely believe that I am who I am.
In Betweeners lived through a slew of changes during the past thirty years, but have a distinctly nationalist outlook. Despite this they feel their country has let them down and arent nostalgic nor do they want to recall the past. This is a generation influenced by political beliefs and activities. These people have also experienced a dramatic gap between the haves and have-nots, which has translated into a sense of helplessness and regret for the majority, who feel they have missed out all opportunities currently on offer in China.
The Open Doors are the first generation to get lay their hands on money the proverbial bucket of gold at the end of the rainbow. This generation deeply appreciates materialism and is a segment influenced by the opening up of China, the Dragon awakened.
For the Take Offs, the one-child policy plays the most critical role shaping in shaping consumer and psychological behavior. As the first one child generation, this generation faced unexpected opportunities as well as stress and challenge. The only child is the pivotal focus of the family, and they are afforded the very best of everything. Because of this, the infiltration of western culture, brands and globalization has been stronger and has cultivated a global view amongst this generation.
DIGITAL CHINA: The biggest media phenomenon in China still remains the internet. China remains a controlled society with regards to mass media. If consumers want to see something global that falls outside of government favor, then they use the internet -as Google knows only too well. Information is circulated very rapidly on the internet because practically and logistically there is only so much that the government can control.
A strong use of the internet is true of all generations, and digital media forms a very important part of Chinese life. Each generation has their own specific reasons for using the internet, but it is well utilized by all generations. This has created a popular saying that: If you cant find the answer to a question on the internet, then that question doesnt exist.
Because of this digital media has experienced growth and brands are making strong use of online and mobile media. This has driven good growth in digital media spend in China. The internet also carries significant credibility and people more readily believe in information found on the internet, than in television advertising.
*China, National Bureau of Statistics, 3 February 2010