Regardless of your industry, if you’re looking to do business in China, market research is essential. Without a clear understanding of who your target audience is and what they want, you’ll quickly find yourself outpaced by local competition. In this post, we’ll take a look at some key considerations when conducting market research in China.
Conduct Market Research in China: why and how
Market research is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets
Market research helps you build a market entry strategy with:
- Actionable insights
- Data collection
- Market insights (industry trends & key drivers for instance)
- Understanding the competitive landscape
- Understanding Chinese Customers
The power of market research lies in the ability to gather and analyze information about consumers, and their needs or desires for products you offer them such as services. This allows businesses like yours access to important data that can be used when making strategic decisions on how best to serve your target audience, while also helping shape future product development plans accordingly.
Furthermore, when entering the Chinese market, conducting Market research is a key factor to get an advantage over competitors. The Chinese market is different from other Western Countries. And the only way to get a proper strategy is to research key information to identify and analyze the market need, market size, and competition.
Market Research in China: 4 Steps
Before getting started with your China Market Research, Define Benchmarks
Setting up your benchmark will help you know in which directions you are going and what type of information you need, in other words, it provides context.
Benchmarking your progress is important. This will help you identify areas for improvement and services that are negatively impacting the performance of a business
Identify the top competitors in your industry. Use their products and services as lenses through which to view how satisfied customers are with you and other companies that compare shopping for similar experiences, such as non-customers or potential new clients.
This will give a unique perspective on satisfaction levels within this niche market segment of business owners versus those who do not compete directly against them but offer related goods/services
What is your industry standard in the Chinese market? This helps you understand your position in your industry in the country you are targeting.
Compare yourself to an industry leader in China. Understand what action you can take that are similar to them and why it works. Ask yourself if it could work for you too.
Here are some of the things you can determine about the Chinese market when running market research:
Market insights:
The market research process can help you decide whether a new idea for an industry or product will fly – that is if customers find it appealing. We study how similar products have performed in the marketplace and make recommendations based on those findings. Opportunity for brand growth.
Competitive intelligence:
Can give you a competitive edge by giving accurate insights into your business. For example, it will show how well or poorly competitors are doing in comparison to one another so that the strengths of each company become more obvious as well as their weaknesses if any exist!
Competitive analysis is an important part of any business plan. Whether you’re just getting started, moving into a new market, or doing your own health check on the company’s performance
Chinese customers:
You can use market research to find out who your customers are and what they might be interested in. If a customer doesn’t want the service or product that you have available, then this is an opportunity for them to tell why not; it could also give insight on how best to reach these individuals so as to offer relevant services/products which will attract more interest from potential buyers
Pricing strategy:
A Chinese market is a tough place for businesses, with price competition being pretty tough. As such, it’s important to know how your prices compare and what customers care about most in order to be successful here! Market research should help you set competitive pricing studies as well as an optimization analysis and strategy.
Market segmentation:
The Chinese market is one of the most complex and diverse in the world. Yet it’s also a place where top the minority of customers generate the majority of profit margins-so knowing who you’re serving matters even more than elsewhere!
You need to segment your customer base by uncovering key groupings, then target those profitable clients with better precision for maximum ROI on resources spent.
Consumers Segmentation:
We just saw it, China is a diverse market in terms of geography but also in terms of demographic!
By dividing markets into smaller groups with similar traits or characteristics, your company will have better insight into what sells among different customer types and be able to make more targeted marketing campaigns that speak directly to them!
The more you understand each segment of your target market, the easier it will be to focus on delivering personalized marketing and build loyal relations with them.
It’s good market research to get done when your brand has gotten enough awareness in China and you want to work on brand loyalty.
Campaign effectiveness:
The goal of a successful campaign is to reach the right people and deliver desired results. Campaign effectiveness research can help you optimize your marketing campaign, thus selling more, and reducing customer acquisition costs by identifying targeted audiences effectively.
If you are big in communication and marketing (which you should be when doing business in China, then we strongly recommend you run campaign effectiveness analysis and research.)
In short, It is critical to research information before making any business decisions, especially in the China market where competition from both local and foreign brands are fighting for slices of the cake. China is also tricky for businesses as trends and platforms are evolving constantly and rapidly.
Types of market research you can realize when entering China
There are a few different types of market research you can do when entering the Chinese market. Market research in China includes :
- Social and opinion research
- Interpretation of data & information about individuals
- Study organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision-making
Local research agencies (like ours) realize “market survey” through well-known quantitative data collection methodologies such as :
- Consumer research: The process of identifying, understanding, and cataloging consumers’ preferences is called consumer research. It helps brands and businesses create a buyers’ persona, and define consumers’ psychology if you will.
- Interviews and online surveys will give you a better understanding of who your target customers are and what they want.
- Consumers satisfaction research: Customer satisfaction is one type of market intelligence that measures how customers feel about the products or services they have purchased, specifically looking at whether those meet expectations; exceed them in some way (whether by being better than expected) but also fail miserably when compared with what was promised.
- Focus groups: with focus groups you can get deeper insights as the participants are selected based on certain criteria. It’s expensive and can create bias
- Customers Observation: A member of our team will watch and take notes on everything they do while observing an ideal user interact with their own product (or similar items from competitors). Instead of focus groups, observation is an effective method for getting customer feedback. It’s less expensive and allows you to see people interact with your product in a natural setting without influencing each other
Market Research types in Short:
You can look at past sales data to get an idea of which products or services are selling well in China and which ones aren’t. You can also survey Chinese consumers to find out what they’re looking for in a product or service and what their preferences are.
Additionally, you can conduct competitor analysis to see what your competitors are doing in China and how you can differentiate your business from theirs. Lastly, it’s important to have a good understanding of Chinese culture and how it influences consumer behavior so that your marketing efforts are tailored appropriately.
Think Long term, Set Up Market Monitoring
The Chinese market is somewhat unpredictable. Market trends, organization, and regulations are changing in the blink of an eye and as a business, you should be ready for that. That is why research in China, should not be a one-time thing but rather constant monitoring of the consumers, the industries, technology changes, and so on.
In a country that evolves so rapidly, companies need to focus on keeping up with the pace if they want to grow their sales. This can be achieved through a smart monitoring strategy. In short, brands in China can’t be complaisant, they have to be proactive and ride the changes instead of surviving through them.
How to make your choice among the many market research companies in China?
Here are a few questions you can ask yourself when choosing your research services provider in China.
Obvious, but, Is it a China Consulting Firm?
When you’re looking for a market research firm, it’s important that they have familiarity with the area you are targeting and the geographic factors that impact it.
Especially true in a market as vast and fragmented as China. Your market entry strategy won’t be the same in China Shanghai or China Changsha 1st tiers cities vs rural areas. You’ll need deeper insights to get started.
Is the market research company you are talking with experienced in your industry?
Ask for the case studies. Multiple industries have different needs and will be looking for different data. If you evolve in B2B healthcare industries, a consulting firm that specializes in B2C e-commerce may not have the right tool or network to run market research that makes sense for your sector.
Not only that, but a market research firm that already has extensive experience in your industry, will be able to provide services at a better cost/efficiency ratio.
How much can the market research teams take on, and what is their capacity?
When working with a market research company, it’s important that you consider their ability to manage the size and scope of your project in time. If they don’t have enough experience or expertise on hand for this task then not only may results be impacted but also client satisfaction as well! They may also be working on any project at a time and yours not be a priority.
Ask for a time scope, and how many peoples will be dedicated to your market research project.
What market research tool does the firm use? Does it answer your needs?
Your business market entry strategy will be heavily influenced by the results of your market research in China, thus it needs to be adapted to your needs.
Maybe you are already in the market and need to understand Chinese consumer’s trends and behaviors, maybe you are looking to enter china market and are more interested in data such as market size, competitor scopes, pricing habits, or maybe you are developing a new product and need more insights on industry trends and so on. Market research services are broad, discuss with your firm your needs and see what they suggest.
Will my China market research be just data or data + interpretation?
Ideally, you want this market research to give you a breakdown of your sector in China. Ask the consulting firm if they provide actionable insights, maybe through white papers, customer consulting sessions, and so on. Ideally, the firm can provide an analysis and a context that will help your company take a decision in China.
For instance, at GMA, we not only run market research but because we are also focused on marketing and communication in China we will give you our interpretation of the data and suggest a marketing and business strategy.
Need to run market research in China for your company?
As a consulting firm as well as a marketing agency located in Shanghai, China. We provide you with market research, market insights, and a broad range of services to succeed in mainland china such as e-commerce, online reputation management, social media marketing, and so on.
Furthermore, we provide services to every type of company/brand and adapt our solutions to their industry, goals in China, and their budget.
Likewise, we have extensive experience helping brands enter China and have built a trusted network of collaborators over the years.
In other words, we are a full-service agency with a deep understanding of the China market.
Contact us to make an appointment!
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