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1、1The mystery of the Chinese consumerIn the first of a two-part series on Asian consumers, we ask what makes the Middle Kingdoms shoppers tickJul 7th 2011 | SHANGHAI | LILY LI wears a lanyard with a little plastic card around her neck, even at weekends. It is a badge of honour: it shows that she has
2、a white-collar job. (She is a secretary at Access Asia, a retail-research company in Shanghai.) She uses Apple earphones for the cheap Chinese mobile phone in her pocket, so it looks as if she owns an iPhone. And she drives to work, though it takes four times longer than public transport, just to sh
3、ow off her little car.After decades of deprivation and conformism, Chinese consumers regard expensive consumer goods as trophies of success. In public, they show off. In private, they pinch pennies. The owner of a gleaming new BMW will drive around for half an hour to avoid a 50 cent parking fee. An
4、d she will hesitate to spend much on interior decoration, because only her family sees the 2inside of her flat.By some forecasts China will be the second-largest consumer market in the world by 2015, not far behind America. Chinese people already buy more cars than people in any other country: 13.5m
5、 last year to Americans 11.6m. China is on its way to becoming the biggest luxury-goods market. The central government made an increase in domestic consumption one of the priorities of its latest five-year plan.Small wonder that Western firms are piling in. On July 4th Nestl, the worlds largest food
6、 maker, confirmed that it is in talks with Hsu Fu Chi, one of Chinas biggest makers of confectionery and baked goodies, with a view to buying the firm.If a deal is sealed, it would be one of the largest foreign takeovers yet seen in China: Hsu Fu Chi is valued at $2.6 billion on the Singapore stock
7、exchange. China is currently Nestls ninth-biggest market, with sales of SFr2.8 billion ($2.7 billion) last year. That is less than half what Nestl sells in Brazil, although China has seven times Brazils population. Hence Nestls hunger for Hsu Fu Chis distribution network, and for its knowledge of wh
8、at tickles Chinese taste buds.“Understanding the consumer is the most important thing for us,” says Paul Bulcke, the boss of Nestl. The food business is more local than almost any othertrying to sell cheese in China is like trying to sell stinky tofu in Switzerland. Nestl has been sniffing around fo
9、r takeover targets in China for the past two years. Hsu Fu Chi is not its first bite. In April it took a controlling stake in Yinlu Foods Group, a family-owned maker of peanut milk and canned rice porridge.Multinational firms trying to woo Chinese consumers have so far concentrated on the countrys t
10、hriving coastal regions. P&G, an American maker of shampoo, toothpaste and other sundries, has its Chinese headquarters in Guangzhou. Its Anglo-Dutch rival Unilevers home is in Shanghai. Yet both firms are preparing for a “second consumer revolution” among the 665m Chinese who live in rural areas. T
11、he income gap between Chinas coastal cities and rustic interior is still six-to-one, but rural incomes are rising and 665m heads could use a whole lot of shampoo.The Chinese government presents its own unique challenges. “Everything is political,” says James McGregor, a former head of the American C
12、hamber of Commerce in China. “This is a government that lets foreign companies build market share when it needs them.” Its longer-term goal is to learn enough from foreigners so it can build its own national champions. To this end, it 3pushes foreign carmakers, among others, into unhappy partnership
13、s with Chinese state-owned firms.Almost all Western consumer-goods makers have felt Beijings heavy hand. Bernard Arnault, the boss of Mot Hennessy Louis Vuitton (LVMH), a luxury-goods firm, was summoned by the Chinese ambassador in Paris in 2008 for a high-decibel dressing down after Nicolas Sarkozy
14、, Frances president, said he would meet the Dalai Lama. In the following weeks scores of women marched into Louis Vuitton shops in China with fake Louis Vuitton handbags and brazenly demanded their money back.Unilever got into trouble recently for hinting that the price of some of its products would
15、 rise. The Chinese government is terrified of inflation, which it fears might spark unrest. It accused Unilever of inciting shoppers to hoard its products, and slapped it with a hefty fine. Yet Harish Manwani, Unilevers chief operating officer, is undeterred. He is planning to increase Unilevers bus
16、iness in China four- or fivefold in the next few years.Buttering up local party bossesThe central government is not the only problem. Companies need to cultivate cordial relations with local potentates, too. Often the provincial governors say-so is needed to obtain land, employment licences and a stack of other bits of paper a firm needs to operate. Local party bosses tend to favour local Chinese firmsanother reason why tie-ups can be helpful.Another big chal