By Max Klein | August 10, 2010
China’s youth market captivates and perplexes brands and marketers. Chinese society places noticeable emphasis on generational gaps; I’ve heard people talk about the ‘gap’ that exists between two people born just one year apart. Others settle on a 3-year term until citing a real difference. Broader, universally recognized classifications place people into categories known as ba ling hou (born after 1980) and, take a deep breath, jiu ling hou (born after 1990). With China’s youth population swelling to a startling 500M in the next few years, reaching this elusive group is crucial for any brand wishing to succeed.
This week, I sat down with John Solomon, co-founder of Enovate China and industry-renowned guru on the Chinese youth market. After earning his degree in international relations from Duke University, John began a career in management consulting, a field that eventually shuttled him to Shanghai, where he undertook large-scale market entry consulting projects. Leveraging his experience both in the U.S. and China and satisfying his desire to work in a more consumer-related field, John co-founded Enovate China, an insights, strategy, and design firm based in Shanghai and Beijing. The following are excerpts from our conversation:
How did you get involved with the youth market in China?
When I was working in D.C., I did a master’s program and Johns Hopkins and studied a lot on China. As part of one of the most interesting classes we took, one professor taught from Washington, D.C., and the other professor went out to Shanghai to teach a similar class at Fudan. We had a video conference link set up each week, so we were actually sitting there staring at Fudan students. I think I learned a lot through that course about my Chinese peers, and that really made me interested in learning more about this.
I came out to Shanghai wanting to do something focusing on the kind of new, younger, under-30 generation, specifically all that they had gone through and how different they were than their parents or grandparents. I had the opportunity to co-found Enovate, so I’ve been doing that for over a year now. I’m really focusing on understanding these consumers, the under-30. I call them emerging consumers.
As anyone living or studying in China sees, there’s a huge generational difference between some of the older maybe grandparents to parent level than there is with youth. Anyone born after the post-1978 economic reform has had a much different China than previous generations in terms of being more globalized and having more influences from within China and outside of China. This has resulted in different consumption behaviors, different outlooks in terms of what they people want to do with their lives and dreams and aspirations and goals. I always tell myself that they are a really important group to study and understand, and whether you’re dealing in politics or in business, this group is really going to be shaping the future of China.
Are Chinese more or less influenced by their peers than other consumers?
When you’re dealing with youth around the world, and we have a partnership of other kind of Enovate-like groups in places like India and Indonesia, Malaysia, South Africa, and the U.S., there are some broad strokes you can take with characterizing youth. Trying to find themselves and wanting to gain acceptance amongst peers are the kind of general values and issues you see amongst youth in general.
But if you look at China, it’s even more a place where peers greatly influence each other. I’m from the United States, where laws like the One Child Policy don’t prevent me from having siblings or other core groups of offline friends that I’m used to. As a result of the One Child Policy, a lot of Chinese youth have had to go other places to find kind of bonds and friendships and relationships. If you examine closely, Chinese youth typically have a few university friends, no siblings, but a few other family members who play an important role in decision-making and maybe a few work friends. But generally, the friend circles tend to be a lot smaller than some other markets or countries, like Japan, as an example. But, if you look at the increasing number of online friends, friends that they haven’t met before, friends that fill that social void, I think Chinese youth fill that void with online friends.
The Chinese internet is a very powerful place for influence and word of mouth. And it’s not necessarily your closest peer or person that you’ve worked with or grown up with or known face to face; people follow someone’s weibo (Chinese micro blog) or BBS site. If you combine that influence offline and online, you see that there is a greater amount of kind of peer word of mouth influence in the China market. And I think that’s very hard for brands to understand, and it’s very elusive as well.
Which foreign brands stand out as having an exceptional grasp of Chinese youth culture?
This is something we’re constantly trying to look at. And unfortunately, I’d say that the biggest brands, the brands that have done the best with youth so far are also kind of the bigger players that usually do pretty well with youth. People point to Nike, Converse, Pepsi, global brands that have attracted males between 20 and 30. They tend to do well globally with youth, so I’m sure they have a lot of kind of resources to pull out and best practices. Generally, these are the brands that are very good about engaging at what we usually call a ‘cultural context.’ Whether it’s Nike building a snowboarding park outside of Beijing, or Converse organizing artist collaborations or a music tour with Indie bands, or Pepsi’s Battle of the Bands, these brands are allowing the youth culture to become part of their brand DNA.
Take the MG car company as an example. They’ve tried to position themselves as younger, and in the process they’ve engaged local young artists, a parkour runner, and a DJ. I don’t think they’ve leveraged these resources as well as they can, but at least they’re getting in with the youth culture. Nike does this well with skateboarding. Quicksilver has done this well in the past with sponsoring surfers in Hainan, or getting involved with skate parks. Mountain Dew, a Pepsi brand, has done a lot with the snowboarding park here in Shanghai, and with action sports worldwide.
I think it’s getting more and more saturated though, so that’s putting a premium on brands that market in an innovative way. And to date, there has not been that much innovative marketing or branding. Marketing strategy has been dominated by tailoring global approaches to the China market, but now I think we’re going to see, instead of starting a campaign in the U.S. and adapting it to China, you’re going to see more originating here.
One of our main clients, New Balance, is creating lifestyle apparel specifically for the China market instead of trying to exploit the smaller running market from the outset. New Balance has been around since 1906, and as one of the first running show companies, they have a story to tell. They had to develop this lifestyle brand not only to push sales, but to explain the brand and its history. New Balance’s president walked in the store, he’s from Boston and said, this is incredible, this is great, a history of New Balance, we never told our story like this! And this retail concept, originated in Beijing and Shanghai, is being rolled out globally. So it’s just interesting when you start to see the demands of the market are really going to cause the innovation to happen here, and then really be exported out.
What issues have you not touched yet that you’re keen to investigate in Chinese youth culture?
To date, we’ve focused mostly on the ‘80s generation, people born between 1980 and 1989, so I think we understand them pretty well as a consumer. On one end of the scale, you can investigate how these youth, who are now 27, 28, 29 are getting married and starting families, and how they are different than the last generation of newlyweds and new parents. I wrote an article for AdAge last week (http://adage.com/china/article?article_id=143527) looking at young mothers, who are different than previous mother generations in how they perceive themselves and their own dreams and aspirations. It’s not all about the child anymore; it’s about the child and themselves, and living a well-balanced life. So I think it’s interesting to look at the mothers and families that are forming and how they’re different, and eventually how those kids will be different.
On the other end of the scale, the ‘90s generation, China’s teenagers, are still a mystery to a lot of people. We use broader generalizations, like, ‘they’re spoiled, they’re crazy, they’re more out there,’ and ‘less conservative, more provocative, more risqué, an ADD generation, no discipline.’ Everyone has their own opinions about them. But I think that we need to take a harder look at what’s going on. I think we really need to understand their values, what’s driving them, what shifts are happening within that group. As they get older and their spending power increases and start to hit brands’ target zone, it will be really interesting. We’ll see bigger changes. Some of the stereotypes will be true, but we need to look at it in more depth. I’m excited to expand into this space.
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