To most of us, myself included, it probably makes intuitive sense to expect consumers in emerging markets to be more susceptible to traditional, in-your-face forms of advertising. After all, people in those countries haven’t had as much time to become critical or even cynical about mass marketing. In addition, they are relatively inexperienced consumers, faced with an increasing amount of choice, along with an emerging wealth to satisfy their needs and newly created wants.

As a result, we may (perhaps naïvely) think that a sector like automobiles should provide a breeding ground for successful advertising campaigns in emerging markets. Well, if you think ‘cars in China’, then think again.

According to a recent article on Forbes.com, consumers in China aren’t blinded by flashy adverts, sponsorship or dealer promotions, but influenced by word-of-mouth, especially when it comes to buying cars.

Here are a few points covered by the article:

Chinese car buyers rely on word-of-mouth, auto shows and the Internet. (Blogs have become a particularly popular means to exchange ideas in China.)

Chinese consumers seem to distrust both traditional advertising and car dealerships staffed with managers who are as inexperienced with cars as most car buyers themselves.

TNS research and KPMG found that Chinese car owners turn to family and friends to make car purchase decisions (40% said that advice from familiars was the most credible source of information; 30% said that the Internet was as a credible source).

According to Klaus Paur, Shanghai-based automotive director at TNS China, Chinese need recommendations and advice, because they are inexperienced consumers in certain categories.

The Chinese “craving for a tangible buying experience” is evident in the fact that tens of thousands of Chinese car buyers visit the international auto exhibitions in Shanghai and Beijing, as well as auto shows in smaller cities across China, in order to “compare a full array of latest models from all manufacturers, conveniently displayed right before their eyes.”

The article brings up several interesting issues:

Firstly, car buying in China provides a good example of an ‘emerging market’ in which consumers can capitalize on ‘emerging technologies’, like the Internet, to help their purchasing decisions – with the potential to “bypass” decades of traditional marketing.

Secondly, in the case of China, there may be an interesting cultural component to the relevance of word-of-mouth and personal experience in shaping buying decisions.

As a prime example of a ‘collectivist culture’, Chinese orientation towards the group, or indeed the ‘wisdom of the group’, could give word-of-mouth not only a unique but perhaps even particularly strong position in consumer culture. In addition, cross-cultural psychology comparing Western European to East Asian cultures has shown that the Chinese tend to rely on more ‘intuitive’ than ‘formal’ reasoning strategies: when concrete instances of objects they have encountered or their own sense experience are at odds with formal rules, logic or abstractions, East Asians are more likely to make decisions based on their intuition. If you add this propensity to the Chinese lack of experience as car consumers, along with the complexity and high investment inherent in buying cars, it should be no surprise that visiting car shows is another popular way of make purchasing decisions.

Posted by Alain on August 1, 2007

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