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The Yin and Yang of Market Research Transformation in China

This month’s Transform blog takes us to a nation characterized by business growth, the lure of entrepreneurship and its own radical transformation as it continues its quest to be a dominant player in the global business markets.

 

By Jeff Resnick of Stakeholder Advisory Services

 

Camir WangThis month’s Transform blog takes us outside the borders of the United States to a nation characterized by business growth, the lure of entrepreneurship and its own radical transformation as it continues its quest to be a dominant player in the global business markets.   Camir Wang, Executive Director of Ipsos’ Financial Services Practice in China discussed the transformation of the market research industry in China with me, providing an intriguing picture of an industry grappling with many of the same global forces as firms in the rest of the world yet with its own unique challenges.  Here is a sampling of themes resulting from our wide-ranging conversation.

Understanding the structure and nature of state-owned enterprises (SOEs) in China is crucial.  SOEs, while common around the world, are particularly relevant to the business landscape in China.  Many SOEs do not have a robust market research department making reliance on research partners a requirement.  As SOEs continue to become increasingly sophisticated in their market information needs, research firms in China have the opportunity to establish a relationship as a significant business partner, transforming from a vendor to a consulting partner.  Additionally, the rise of younger managers more open to paying for value rich services will reinforce the opportunity for partnerships between SOEs and the senior staff of research firms.

Changing cultural norms will cause seismic shifts in how marketers need to look at China.  As Chinese markets have opened to the outside world, new cultural elements have emerged and grown rapidly.  Market segmentation techniques as well as the integration of data from social media and other sources will become integral to driving deep insight into the changing nature of the Chinese consumer.  Current economic efforts on the part of the Chinese government to increase trade agreements and spur internationalization of its markets will only accelerate this trend and create the need for deeper insight.

Specialization and industry expertise is a growing mandate.   Buyers of market research in China increasingly value expertise and knowledge in specific industries.  Understanding the client’s business and industry is crucial to providing consultation around the impact of the insights gleaned.  Individuals who are generalists across a number of industries will become less attractive going forward.  Furthermore, in the B2B world, a premium is placed on research partners who will actively help identify actions required based on research findings and then assist in the development of action plans for implementing change; difficult to achieve without deep industry knowledge.

Consulting and MR firms will go head to head in hotly contested battles.   Clearly a global trend as well, this is driven by the rapidly changing value proposition of Chinese MR firms as they shift to a more consultative orientation juxtaposed with a drive by consulting firms to bring analytics and insight functions in-house.  Research techniques will become far less important than impacting business outcomes. In particular, highly entrepreneurial boutique MR firms will aggressively pursue this territory over the next few years.  Large global firms are already creating business units focused on providing consulting services.  A cost differential may well be a catalyst enabling sophisticated MR firms to move in this direction.

Research staff will need to evolve to meet the requirements of clients.  The forces discussed will clearly have an impact on the future skill requirements of market researchers in China.  One characteristic of the Chinese research industry is a higher staff turnover rate.  According to Camir, this provides the opportunity to continually reshape staff capabilities as the needs of clients change.  In fact, requirements for the future may well make employment in China’s market research industry “sexy” again – important if the industry wants to compete for talent against other industries – e-commerce, for example.  Requirements for big data analysis, a business outcome orientation and strong consultative skills may well define the next generation of senior market research professionals in China.

Traditions of the past must be honored while transforming for the future.  In as much as China is exuberantly embracing change, it is also a country of tradition.  Honoring traditions of “face” and the building of relationships cannot be lost during the industry’s transformational process.  Those who try to brush these traditions aside will be sorely disappointed.

Without a doubt, Camir Wang, along with other executives at Ipsos in China, believe the future for the market research industry in China is bright.   She is guiding her team down a path she believes will be successful based on the forces impacting the industry.  It is the Year of the Goat according to the Chinese zodiac, heralding promise and prosperity for all, including the market research industry.

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One response to “The Yin and Yang of Market Research Transformation in China

  1. I must be living in a parallel universe??

    The one thing that is clear in market research in China is a major disconnect between marketing strategy and market research (using the latter term loosely!). Research in China is up to the gunnels with companies that can run very good research operational functions but to expect any to delver strategic advice for research design or for brand development would be wishful thinking indeed. It will take a generational change before we ever see that in China. The Year of the Goat won’t even butt this along more than an inch or two. So the idea that management consultants and marketing researchers will go head to head is another slightly transcendental perception.

    I also don’t really believe there are any major segmentation developments that will take place in the next few years. Despite the rapid changes over the last 5 years it is now fairly static at the macro-segment level. Every marketer knows the power of social media in China and frankly it is pretty predictable, being dominated by a few players. I am sure there will be some minor side developments but the penetration of current social media platforms is quite established.

    Many companies are finding the job-hopping attitudes of Chinese staff to be so annoying and such a waste of investment that they are turning to Chinese language speaking foreigners as a sensible alternative. The problem with China’s one child policy is that it has put so much pressure on young people to achieve and live up to the expectations of parents who doted on them with money and soft love. Every graduate wants to make a quick million, buy and apartment and have a European car preferably in the first 10 years of their working life. Each child also knows that his responsibilities going forward in life will still include looking after their ageing parents. Any wonder they chase the dollar at every opportunity. The point here is most of today’s young market research executives will be out of the industry chasing an IT or financial services career. This means a cycle of low quality among research staff in China as the trained leave and new interns settle in over any two year period. I am sure some may think, why not pay them more? The answer is they are just not up to the quality expectations at the moment.

    Perhaps the missing comment in all this is “whither corruption?” in the next five year. Corruption is rife in marketing services in China with one local business magazine describing it as endemic in the marketing sector. Will there be a swing to market research quality as the anti-corruption policies of the current administration are pushed through at many levels? We can only live in hope!

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