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White Paper on Market Research In China – Part 4 of 4

Desk Research

The language issue alone makes conducting desk research into China a daunting task for Western organisations, and this issue is frequently added to with the complaint that desk sources in China are hard to come by. Whilst the language issue is beyond doubt, it is certainly not the case that there is a lack of desk resources for the researcher.

In fact, if it is industry statistics and details of regulations that you are looking for, then it is doubtful that any country makes more information available than China. The National Bureau of Statistics (www.stats.gov.cn/english/) provides economic information for free on a monthly basis. The National Development and Reform Commission puts in place regulations designed to develop different Chinese industries, and these regulations can be found on http://en.ndrc.gov.cn/. A whole host of Ministries and Administrations exist within the Chinese Government, all of which are listed on www.china.org.cn. Many of these will provide information on the industries and activities within their jurisdiction, either online or sometimes through direct contact. Increasingly, information is provided in English and other European languages.

In addition to direct Government departments, most industries within China have at least one association, which will be closely related to Government. These associations are excellent sources of market information, and indeed of potential target companies within their industries. Chinese agencies all possess the Chinese Government’s directory of Government departments, which is two volumes long and lists every single Government department.

In terms of search engines, the main tools used are www.google.cn and www.baidu.cn. As with primary fieldwork, researchers operating within China must steer clear of certain information areas, relating in particular to Government and social policy.

Data Analysis and Interpretation In Chinese Agencies

Data analysis techniques have developed enormously in recent years, with techniques such as customer satisfaction and segmentation statistics commonplace (albeit less commonplace than in the West, where there is more demand for this type of research). Agencies typically have inhouse data processing and quantitative analysis departments, often consisting of around half a dozen people. Some of these departments contain an advanced statistical analyst; others rely on outsourced labour for what is still a relatively rare requirement.

Agencies also have an increasing ability to provide strategic insights in their research projects. Indeed, the line between ‘consultancy’ and ‘market research’ is rather blurred in China, and many companies have business licences for both activities. To an extent the requirement for strategic conclusions has been driven by Western organisations, with a number of Chinese agencies stating that Western clients ‘demand more insight, whereas Chinese clients prefer to provide the insight themselves’. Whether this is true or not, it is certainly the case that many of the leading Chinese research agencies are on a par with their Western counterparts in terms of their ability to provide strategic insights.

How Do Chinese Agencies Market Themselves?

As has already been documented, the Chinese market research industry is growing rapidly, and many agencies have experienced a surplus of enquiries over the past 3 years. Add to this the fact that business in China is far more relationship-oriented than in the West, and it is easy to see why conventional marketing activities such as direct mailers and advertisements are rare. In many cases, even the websites of Chinese agencies are extremely understated. The main marketing activities conducted by agencies are registration on directories (such as CMRA and ESOMAR) and, to a lesser extent, appearances at conferences and events.

To all but the very biggest agencies, the main method of winning business has been through simple relationship building. Directors of Chinese agencies are excellent at networking in the local business community, and ensuring that recommendations are made through word of mouth. The increasing interest of Western companies in conducting market research, as well as the increasing take-up of the Internet within China, have ensured that company websites will be a key mechanism for winning business over the coming years. Companies such as PAMRI (www.pamri.com) have followed the lead of the international agencies (including the regional Acorn Asia – www.acornasia.com) in building a comprehensive website in both Chinese and English. This trend will make the task of finding out about and ‘screening’ Chinese agencies easier and easier in the years ahead.

Recommendations For Research Buyers

This paper has sought to introduce the reader to the main characteristics of the Chinese market for market research, and above all highlight the great potential for any research buyer to consider commissioning market research in this fast growing market. With the right agency, research in China is good quality, detailed, insightful, cost effective, and above all an excellent aid to decision-making. We finish this article by putting forward 5 tips on commissioning research in China:

Focus – The best quality research will be research that focuses on one, two or three areas of China, rather than attempting to research the whole country at once. Differences between regions, as well as the sheer size of target audiences, are so vast that – without a large budget – country-wide studies can risk spreading the research effort too thinly.

Go national - Choose an agency that is national (or indeed international) rather than local in scope – these are the agencies that have most resources, are most used to dealing with Western clients, and most accustomed to providing insightful analysis rather than simply interview scripts.

You get what you pay for - The good quality Chinese agencies are slightly cheaper than Western agencies, but don’t expect to pay a quarter or a third of what you pay your European or American agency. Incentives to respondents, rigorous quality checking and high level of involvement by very senior staff are all reasons why the better agencies are not ‘cheap and cheerful’. Our advice would be to think of the research cost in terms of the potential benefits to your organisation and its decision-making, which could potentially be huge.

What type of researchers are they? – It is important to check not only the client list of a potential supplier, but also the type of work that the company does. In particular, it is essential to differentiate between experience at collecting data, and experience at analysing data and drawing conclusions. Many of the younger agencies are used to working with Western organisations, but many projects have been on a ‘data only’ basis.

Keep frequent contact - Frequent contact should be kept with the agency you appoint, not only to keep track of the progress of the project, but more importantly to establish a relationship and be seen by the agency as a partner. Chinese business is extremely relationship oriented, and the closer you work alongside your agency, the more proactive you will find them. There is no such thing as pestering!

This entry was posted on Thursday, September 28th, 2006 at 9:58 am and is filed under Articles, Desk Research, International Market Research, Market Research, Market Research China, Qualitative Research, Quantitative Research, White Papers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.