Fig. 1: Chinese buyers in a factory outlet near Shanghai

In this chapter we will cover the basics of Chinese consumer behavior.

Definition

Consumer Behavior can be defined as

“The behavior of the consumer or decision maker in the market place of products and services”

(source: American Marketing Association)

Another term for Consumer Behavior is Buyer Behavior.

Fundamentals

After setting foot to China it does not take long to recognize that marketing stimuli such as pricing, product appearance, advertisement and promotional efforts – just to name the most visible ones – are quite different from home.

Tab. 1: The black-box model of consumer behavior

This phenomenon can be explained with the help of the so-called black-box model of consumer behavior, which describes the interaction between environmental factors, the buyer’s characteristics and his buying decision process, and the buyer’s responses resulting thereof (see Tab. 1).

Example: A company that wants to trigger a specific response in a local Chinese consumer (buyer’s response) – like buying a product that the company sells in China (e.g. “brand choice” = company’s brand) – can achieve this goal by adjusting some of the marketing stimuli (e.g. choosing a good Chinese brand name accompanied by TV ads on CCTV and in-store promotion) while taking into consideration China’s different environmental stimuli (e.g. China’s different geo-demographic situation – wider gap between rich and poor and higher average income in the East with respect to Western China) and the behavior of Chinese consumers such as the buyer’s characteristics (e.g. KFC profits from the fact that Chinese consumers prefer chicken over beef) and his purchase decision making process (e.g. in their search for information about a product which can satisfy their needs Chinese consumers pay much more attention to TV advertisement and recommendations from friends and family members than Western consumers).

Click on the following links for more information about individual items of the black-box of Chinese consumer behavior:

• Environmental Stimuli
  • Economic/demographic factors: The urban Chinese consumer
• Purchase Decision Process
  • Chinese Consumers' Information Search Habits
• Buyer's Response
  • Chinese Consumers' Brand Choice
  • Chinese Consumers' Dealer Choice
  • Chinese Consumers' Purchase Amount (price vs. brand)
    

China's consumption structure

Tab. 2: Overview of China‘s consumption structure, using the example of Qingdao city.

An attempt of a general overview (as of 2010) of China's consumption structure is depicted in Tab. 2. It shows how specific buyer responses (here "brand choice" and "dealer choice") in China (using the example of Qingdao city) depend on certain social, personal and psychological buyer characteristics (here "income/year" and "general classification criteria").