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China: The Next Great MR Growth Market?


As anyone who has decided to invest in China will tell you, it’s not about what China has achieved to date but what it is going to become. And this is not restricted to selling cars, coal and mobiles (well…maybe it is a bit!); MR gets a major boost from this growth! An opportunity amongst opportunities – nations within a nation: “China”. I see more and more people coming and joining the growth story as it’s hard to see this pace anywhere else (except India – though let’s stick to China for now!).

Let me share some key stats on MR in China :

  • China’s MR Market size is around 1 billion dollars, while the Global MR market is 30 billion US Dollars, China is still ranked a respectable 6th.
  • Our “big brother”, the Advertising market has China sitting pretty at No. 2 with 57 billion USD.

Clearly MR is the “little brother” of the Advertising market. In fact if we look at the global MR industry – it is about half the size of China’s advertising market alone! The good news is as the smaller sibling we rarely march to our own tune, but follow in big brother’s footsteps. So expect to see China to break into the top 3 MR markets within the next 3 years and the 2nd within 5-7 years.

So if MR follows Advertising trends, what’s the potential MR market size in China? If we look at the top 5 mature (almost sounds like a bad thing these days) MR markets ahead of China (i.e. USA, UK, Germany, France & Japan), are 9.5% on average of the total Advertising market size in these markets. And in China today – MR is a mere 1.6% of the Advertising market size. Even if China achieves an average half of these markets, the potential upside is 300%.

Often when I talk China and numbers there is a lot of skepticism and an expectation that a bubble is coming. Well waiting in our own holes hoping China’s hole is potentially larger doesn’t seem like a great strategy to me. My advice will be to get in there and join the party while you can. If you are right about the bubble, when or if it does burst you would have had a good run for a while (probably quite a while). Personally I think this run is here to stay, but who knows what tomorrow brings?

What I think we can agree on is that at least for the foreseeable future, China is the next great growth market for market research suppliers. What are you waiting on?

Please share...

2 responses to “China: The Next Great MR Growth Market?

  1. Serendipity! Warc had a nice story related to this today:

    Here it is in entirety as well:

    “Chinese ad market climbs

    BEIJING: China could become the world’s second largest advertising market in 2011, as global events serve to accelerate its ascension.

    GroupM, the media arm of WPP Group, suggested Japan, whose ad market is currently behind only the US in adspend terms, will suffer major economic effects following the recent earthquake and tsunami.

    The company had previously predicted Japan would witness 3.1% revenue growth in 2011, but Adam Smith, its futures director, warned anything other than a decline is a highly remote possibility.

    “I think this event will have the most serious economic consequences of any I can remember – El Nino, Katrina, SARS, 9/11, southeast Asia’s 2004 tsunami,” he told the Financial Times.

    “The likely range of revision must surely begin in minus territory now.”

    While factors from fluctuating exchange rates to the veracity of official Chinese governmental data always make forecasting “haphazard”, Smith believes all trends indicated a shift towards the world’s most populous nation.

    More specifically, GroupM has estimated Chinese advertising expenditure should climb by 10% in 2011, after reaching $45bn (€32.4bn; £28.1bn) at the close of 2010.

    Given that Japanese adspend hit $51bn last year, essentially flat on an annual basis, the seemingly inevitable contraction of this figure might mean the country trails its Asian neighbour by the end of 2011.

    However, Smith added such a change can, at best, be seen as symbolic, as the vast majority of clients have already decided where their strategic focus lies.

    “Most people know their next billion customers are going to be coming from China,” he stated.

    Even before the devastating events in Japan, Sir Martin Sorrell, WPP’s chief executive, asserted a fundamental transition was underway.

    “The world continues to move at very different speeds, both geographically and functionally,” he said.

    Drawing on an English football analogy, Sorrell named Brazil, Russia, India and China as the “Premier League” players boasting the best prospects, joined by further fast-growth economies like Mexico and Turkey.

    The US, was, along with Germany in the second tier, described as “The Championship”.

    A third category, “League One”, primarily featured Western European countries such as France, Italy, Spain and the United Kingdom.

    This left Japan alone in “League Two”, because it has been “stagnant for almost twenty years.”

    Looking beyond advertising, trade clearing service MF Global argued the luxury industry – long reliant on Japan as a key outlet – could similarly be forced to adapt.

    “Weaker consumer sentiment, and the psychological impact of conspicuous consumption, is likely to affect luxury good sales, clothing and jewellery retailers and prestige cosmetics companies,” it said in a research note.

    Richemont, the owner of Cartier and Piaget, did not even conjecture on the sector’s outlook.

    “It is simply speculation to try to assess what the problems there will mean for the economy and business,” the company said in a statement.

    Elsewhere, automakers such as Toyota, Honda and Nissan may suffer in their efforts to gain ground in China’s premium car market.

    “The Japanese are already way behind the German brands,” said Klaus Paur, Synovate Motoresearch’s managing director, Greater China.

    “The earthquake will hurt their luxury brands further as they don’t make them here in China.”

    Data sourced from Financial Times, BBC, Wall Street Journal, Reuters; additional content by Warc staff, 16 March 2011″

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