The Yin and Yang of Market Research Transformation in China

 

By Jeff Resnick of Stakeholder Advisory Services

 

This 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.