Adam Davidson’s recent article in the New York Times magazine makes clear something that every American working and studying China knows – Chinese are not Americans. They have different cultural values that manifest themselves in differing patterns of economic behavior and consumption. In many ways, these patterns are more “rational” than the behavior of American consumers, who seem to be easy spenders.
Many U.S. executives also assumed that as China got richer, its citizens would spend more of their income. But the opposite has happened: the country’s savings rate is now climbing faster than its spending. China’s households save more than a quarter of their money, while Americans save less than 4 percent.
Having done fieldwork on KFC in Beijing in the 1990s, it was readily apparent to me that distinct social pressures, cultural values, and historical experiences resulted in a Chinese consumer that would have to be treated differently from other consumers. In fact, this is the message that was emphasized by KFC corporate executives (which was then part of PepsiCo) who were responsible for achieving one of the successful penetrations of the Chinese market; you can’t sell chicken in China the way you sell it in the United States, Japan, or even Hong Kong. There were many early pioneers among American or multinational companies seeking market penetration in China (Starbucks, Kenny Rogers, Benneton, to name a few – who even sees a Kenny Rogers in the United States anymore), and those that either catered to the Chinese cultural context (whether in focusing on children as KFC did or in targeting a rising elite, cosmopolitan taste like Starbucks or Pizza Hut) have been successful. Those that had less of an understanding of the uniqueness of Chinese customers (or the particular circumstances of customers in any culture throughout the world); instead of Barbie, more educational entertainment or video games seems more likely to be purchased by aspirational Chinese parents for their children.