Worlds Apart: A comparison of the market research industries in the USA and China

If, like me, you are sitting in the UK, running a market research business on three different continents, it can feel like you have an average body temperature but it is made up of a foot in the fire and the foot in the fridge. The fire and the fridge are the markets of North America and China.

B2B International entered the US and Chinese markets six or seven years ago. Both countries are important to our organisation; as an international business-to-business market research company, we know that we have to have a foot in each camp. Indeed, we had being doing business in both countries for many years prior to this, but always remotely. We sent people from the UK or commissioned partners in the respective countries to carry out the interviewing. However, we knew that if we really meant business in these countries, we had to set down roots there.

These nations are surprisingly similar in physical size at 3.7 million square miles (nearly 6 times the size of the UK). In population, China wins hands down with 1.3 billion compared to 314 million in the USA. In economic terms, it is the US that dominates, with a GDP of $15 trillion per annum compared to $7.3 trillion for China. However, I am just playing with figures and the fact remains that both these countries are giants on the planet and forces to be reckoned with for market researchers.

Setting up a business in each country was relatively easy. We had to be a little careful as to how we defined our business in China because market research companies are looked at with some suspicion, if only because in theory they could carry out social and political studies, which are somewhat frowned upon. In our specialised niche of business-to-business market research this was not a problem. The US had no such restrictions and establishing a business required some form filling and administrative niceties but not much more.

Once we had a physical presence in each country we began to seriously address them as local markets, promoting our services as a supplier of b2b market research. It was at this time that we were struck by the huge differences between the countries. The USA is the home of market research. It began there in the early 1800s, and by the early 1900s the fledgling market research industry had started focusing on advertising testing in one form or another. The industry arrived on the European shores in the 1920s and 30s but it didn’t make it to China until around the year 2000. Not surprisingly, the US market for market research is many times bigger than that in China and much more mature.

The attitude to market research in the two countries could not be more different. In the established market of the US, where a large number of managers have a formal business education, it is accepted that major business decisions must be underpinned with objective data. It is not unusual for a relatively small US company with revenues of only $20 million per annum to commission a market survey costing $100,000. In China it is not unusual for a company with revenues of $2 billion to thumb its nose at spending $20,000 on a market research project. No doubt Chinese companies will modify this view as they find they cannot compete on product and price alone. They will be forced to become more sophisticated in targeting their audiences and understanding them more fully. This may take a few years and in the meantime a good deal of the market research commissioned in China will be by Western companies wanting a deeper understanding of how they can build their businesses in that country.

The implementation of research in the US and China is very different. In China there is a gulf between the massive cities and the rural hinterland. People are not yet forthcoming with their views and opinions and, as a result, the answers to market researchers’ questions can sometimes be a little on the thin side. On the other hand, most Chinese people will still spare the market researcher the time of day in contrast to the US, where it is almost impossible nowadays to get anyone in a large company to answer their phone rather than let it ring through to a voice message.

Paul Hague, founder of B2B International

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