Weibo – Opium of the Masses

Weibo – the only talk in town, whether in China or elsewhere

What is a Weibo ? As its name indicates, it is a microblog on which you can write 140 chinese characters (equivalent to 1,400 of our letters), and which allows you to attach a picture which can be changed at will from your mobile phone, and sent with a new text to all your followers. In short, a hybrid of Twitter and Facebook, all of which (picture, text and blog access) is managed in three seconds through a mobile phone.

A formidably effective communication tool, whose versatility comes from the fact that 140 chinese characters offer a lot of room for expression, available at any time

While Twitter is forbidden in China, Weibos are proliferating. The one from sina.com, the first to appear two years ago, will end up eating up the giant internet portal which generated it. On par with Sina and counting more than 200 million users, Tencent Weibo is the child of Tencent instant messaging (among other things), a local social network. Then there are others, smaller, less advertised.

As Chinese political experts point out, Weibos were not shut down last summer, when popular discontent (also spread by these same weibos) was very high due to the high speed rail crash. Could Weibo be the Facebook of Chinese “Jasmin Revolution” ?  

Size and growth of the Chinese luxury market : a global perspective

As internal Chinese demand for luxury goods slows and the incredible surge of western luxury brands over the past few years is challenged, many wonder what growth to expect from the Chinese luxury market in the coming year. Meanwhile, experts predict this will become the world’s largest luxury market (in front of the US) by 2015 or 2020.

Is the market really shrinking, or is the available data not being correctly analysed ?
On the one hand, in China, Upper Middle Class purchases (mainly watches, luggage and clothing) are no longer growing and even seem to decline. On the other hand, we have seen foreign luxury markets boosted by the Mainland Chinese buyers.
In Paris, after an unending, record year, luxury stores are out of inventory. Patek Philippe or Breguet limit sales to the Chinese to one watch per passport, in order to keep some for the other buyers. Hermes is overloaded by demand for its large colored (pink, green, blue, anis) Birkin bags. Cartier on the Champs Elysees does not have enough inventory to put the new collection on display. Jimmy Choo is out of eel skin … All this, thanks to (or because of) the Chinese. The phenomenon is not unique to France. In New York for the first time, Tiffany’s flagship store on Fifth Avenue has acknowledged its growth in the first semester is linked to the Chinese tourists. In London, Global Blue detaxing institute has noted a 50% growth in Chinese purchases.

The Chinese luxury market is very peculiar.
Due to a 30% tax on luxury products (luxury products being defined very widely), these products cost 30-50% more in China than in France, where the same product is sold tax free to foreign tourists. This cost differential exists everywhere around the world, since it is in China, a “socialist market economy”, that luxury products are the most expensive, precisely because of this tax.
In such a context, purchasing a Patek Philippe watch or a Birkin bag in China is so expensive that its justifies, in itself, a trip to Hong Kong or (if one has more time) to Europe.
For a long time this phenomenon was not fully understood, because foreign visas were difficult to obtain, which was a real obstacle for the Chinese. This is no longer the case, and with guarantee deposits, European embassies now deliver visas much more easily.  

Translating brands into Chinese : a delicate process

Some time ago, I was contacted by one of my clients from the luxury industry. He was in the process of entering the Chinese market through a distributor in the South of China, and had questions regarding the translation of his brand into Chinese. Of course, this is an mandatory step, since the Chinese don’t accept (or understand) the roman alphabet used in the Western world. The brand must be transcribed into Chinese characters and phonemes.

There are three schools of thought in this regard :

- the phonetic school uses Chinese phonemes, that is, Chinese characters which have over time lost their meaning, but reproduce the « sound » of the brand. This is the case for « Cartier » in Chinese – it does not mean anything but sounds good in Chinese, and its assembly of characters without meaning gives it a very western and modern feel.

- the semantic school, on the other hand, seeks to translate the values of the brand while moving away from comparable prononciation. The names carry real meaning by have no relationship to western prononciation.

- the intermediate school focuses on prononciation, while trying to use characters with strong semantic meaning.This is a dangerous exercise, because it is often used and may generate bland names with relatively hollow meaning and referring profusely to « pearl, excellence, noble, gemstone, treasures …. »

My client was telling me of his disarray because his distributor, instead of testing the Chinese translations with a given population, had given the list of proposed names to a Feng Shui master, equipped with a compass and a dial, who set about determining which name would provide the greatest health and prosperity to the brand in China. This is an original technique I had never heard of and which delighted me. Of course the said distributor, when he focuses exclusively on distribution, is excellent.  

A strange trade in Chinese tourists at the Galeries Lafayette in Paris

In 2010, 700 000 Chinese tourists visited France, of which 95% came to Paris and went shopping at the large department stores.  Although data for 2011 is not yet available, Chinese visitors in Paris are clearly much more numerous than last year.

In August 2008, during its popular 8pm news program, France’s leading TV channel TF1 broadcast the following video, prepared by its news department.
The video focuses on the difficult subject of Chinese tourists shopping at the Galeries Lafayette, the most prestigious of the large Parisian department stores. To facilitate your understanding, Zhenji has subtitled the discussion in English and Chinese.

Feel free to share this article widely through Twitter or email : the Chinese tourist should know how he is treated by his tour guides in Paris, and how his money is being diverted.

It’s all in the video : http://www.youtube.com/watch?v=sCw2RZVDx8k

Marketing to the Affluent Chinese: Target the event, not the individual !

Targeting a specific type of consumer or client when designing a product for China can cause serious headaches. Indeed, it is common knowledge that there is no single « Chinese Consumer », but rather a multitude of Chinese consumer types. The Northern Chinese may be opposed to Southern Chinese, East Coast Chinese to Chinese from the backward central regions, New Money to Old Money, “hard-earned” money to “dirty” money. Is there a key to targeting potential clients in this extremely fragmented market?

For over six years, we have been interviewing affluent Chinese of all sorts about their lifestyle and associated product purchases, and this has convinced us of the following: there IS a common denominator among all the affluent Chinese. For all of them, social events in China are extremely codified and require the display of specific categories of luxury products.

For example:
Rich Chinese often display numerous, expensive luxury watches, which makes us smile and think that the Chinese are avid watch collectors. In fact, during our interviews, the Chinese explain (quite logically) that each watch fits a specific event and therefore multiple watches are necessary: one for the workday, which will be common / low profile i.e. a Rolex or a simple Omega; one for the Board or Communist Party meeting i.e. a premium watch such as a Patek Philippe with complications or an Audemars Piguet ; one for sports activities – a Tag Heuer or a diving watch like the Omega Submariner ; one for parties with sophisticated friends – a diamond watch from Piaget or Cartier… And as people get richer, the events subdivide, specific sports will require specific watches i.e. a diving watch for diving, a Jaeger Lecoultre Reverso for Polo, etc …

The same pattern exists in the women’s universe, clothing for example: at work (all the women work in China) a skirt and a sophisticated top, for shopping a casual outfit which may include trousers, for an evening event a evening gown, for a Charity lunch among women a very sophisticated but this time short dress, for sports – sportswear, for golf – golf apparel, for yoga an indoor outfit made of expensive fabric such as single thread cashmere…

Events are codified and the Chinese are very formal. While it is difficult to describe a « typical » Chinese, all the Chinese across the country will agree on the same attributes to wear at the same types of events. This flows from the strong influence of Confucianism, which dictates what is called Chinese « good taste », or rather the importance, as taught by Confucius, of behaving in the appropriate manner in each specific circumstance. What the Chinese call « Good Taste » today is nothing more than what Confucius called the « virtue of the gentleman ».

The key to marketing a luxury brand or product in China, therefore, is to find the related event, rather than to determine the type of client or consumer. Once you’ve identified the event, you will be able to roll out a lifestyle-marketing plan that will be simple, effective – and very lucrative.