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International Direct Marketing also Gaining Ground in China
Huge potential for growth in the world's largest market
December 2006By Klaus M. Knappik and Dr. Diane Rinas (published in the trade journal DIREKT MARKETING, December 2006 issue)
The global economy is changing at a rapid pace. Markets are becoming more closely integrated and countries which only yesterday were still development regions have caught up economically within the space of a few decades. The prime example of this is China that will have a decisive influence on the global economy in the next few years.
Modernization and economic growth are progressing more dynamically in China than in almost any other country on earth. The formerly agrarian country has developed into an industrial powerhouse within just a single generation. Some key socio-economic data highlights the unparalleled market strength of the Far East's economic motor. The country's population has passed the 1.3 billion mark and gross domestic product again enjoyed almost double-digit growth of 9.5 percent in 2005.
Experts forecast that as early as 2014 the expenditure of the over 351 million private households (2005) will exceed that of households in Japan. As a result of the huge economic growth, Chinese consumers' purchasing power is also rising and with it the demand for Western products - ideal conditions for companies wishing to use direct marketing to gain a foothold in the Chinese market. International Direct Marketing Monitor, published by Deutsche Post Global Mail, impressively illustrates the Asia-Pacific economic region's catching-up process in the area of direct marketing. Whereas the 2004 issue still focused on the market in the US and Europe, the international market study conducted in 2005, which expanded its scope to include countries such as China, Hong Kong and Singapore, reflected the shift in the global economic focus. The rule of thumb of international direct marketing also applies to the Asian countries' convergence with the Western economies. Without a precise knowledge of local conditions at economic and social level, marketing campaigns will not have the desired success there.
15 percent of mailing recipients often receive advertising mailings (Asia: 35 percent), 29 percent rarely receive them (Asia: 33 percent) and 56 percent almost never receive them (Asia: 32 percent). At the same time, the surveys conducted by International Direct Marketing Monitor 2005 confirm that the prospects for mailings in China are good. They show that 45 percent of advertising mailing recipients in China read their mailings regularly, 20 percent of them respond at least once a year and seven percent respond even more frequently than that. Consumers in China also like receiving mailings and feel flattered if they are personalized. Although they respond to mailings far less than mailing recipients in developed "direct marketing strongholds" such as Sweden, the Netherlands, France or Spain, Chinese consumers' response rate is slightly above the Asian average.
In China, trust, in particular, plays a major role. 46 percent of Chinese mailing recipients like to know the sender and 35 percent would like to be targeted personally. However, less wellknown companies can definitely score points with design. The mailing's colorfulness, the look of the postage stamp and the quality of the paper, especially, meet with a great response. Good design can arouse the interest of the younger target group (under the age of 45), in particular, with 73 percent of this group considering it to be important. In most countries, men and women set different priorities for mailings and China is no exception in that regard.
Experts forecast that as early as 2014 the expenditure of the over 351 million private households (2005) will exceed that of households in Japan. As a result of the huge economic growth, Chinese consumers' purchasing power is also rising and with it the demand for Western products - ideal conditions for companies wishing to use direct marketing to gain a foothold in the Chinese market. International Direct Marketing Monitor, published by Deutsche Post Global Mail, impressively illustrates the Asia-Pacific economic region's catching-up process in the area of direct marketing. Whereas the 2004 issue still focused on the market in the US and Europe, the international market study conducted in 2005, which expanded its scope to include countries such as China, Hong Kong and Singapore, reflected the shift in the global economic focus. The rule of thumb of international direct marketing also applies to the Asian countries' convergence with the Western economies. Without a precise knowledge of local conditions at economic and social level, marketing campaigns will not have the desired success there.
The attitude to direct marketing in China
Particularly in a multiethnic state like China with 70 regions, 80 languages and 56 ethnic groups, it is enormously important to be familiar with special, country-typical characteristics. Direct marketing in China offers huge potential for growth because, both by global and by intra-Asian standards, this form of communication is still relatively undeveloped in that country. The mailing density in China is far lower than the Asian average.15 percent of mailing recipients often receive advertising mailings (Asia: 35 percent), 29 percent rarely receive them (Asia: 33 percent) and 56 percent almost never receive them (Asia: 32 percent). At the same time, the surveys conducted by International Direct Marketing Monitor 2005 confirm that the prospects for mailings in China are good. They show that 45 percent of advertising mailing recipients in China read their mailings regularly, 20 percent of them respond at least once a year and seven percent respond even more frequently than that. Consumers in China also like receiving mailings and feel flattered if they are personalized. Although they respond to mailings far less than mailing recipients in developed "direct marketing strongholds" such as Sweden, the Netherlands, France or Spain, Chinese consumers' response rate is slightly above the Asian average.
In China, trust, in particular, plays a major role. 46 percent of Chinese mailing recipients like to know the sender and 35 percent would like to be targeted personally. However, less wellknown companies can definitely score points with design. The mailing's colorfulness, the look of the postage stamp and the quality of the paper, especially, meet with a great response. Good design can arouse the interest of the younger target group (under the age of 45), in particular, with 73 percent of this group considering it to be important. In most countries, men and women set different priorities for mailings and China is no exception in that regard.
Almost half of Chinese female consumers (49 percent) put their faith in well-known companies while only 43 percent of men do the same. As far as attaching value to a well-known face as the sender is concerned, a similar difference emerges. Female consumers also place the emphasis on different things when it comes to design features. Advertising mailings that are colorful and have a high-quality look as well as attractive postage stamps are far more popular with women than with men. However, there is a high level of agreement between the sexes regarding the requirement that advertising mailings should showcase a product in order to create interest. The Chinese attach particular importance to hard facts, which is why 67 percent of those who respond to mailings ask for additional information. A good 50 percent find out more at the point of sale or redeem the enclosed coupon. However, mailing recipients in China are less likely to accept offers to enter sweepstakes.
To sum up, it is evident that, on average, Chinese consumers have a greater affinity to mailings than their Asian neighbors even though, compared to print media and TV, there is still a great deal of catching up to be done in terms of popularity, informative value and entertainment value. In advertising activities, it is also important to take into account the fact that consumer behavior can quickly change; dialog-based measures that respond to country and target group-specific requirements are generally a safe bet with the Chinese. They like receiving mailings and even feel flattered if they are personalized.
To sum up, it is evident that, on average, Chinese consumers have a greater affinity to mailings than their Asian neighbors even though, compared to print media and TV, there is still a great deal of catching up to be done in terms of popularity, informative value and entertainment value. In advertising activities, it is also important to take into account the fact that consumer behavior can quickly change; dialog-based measures that respond to country and target group-specific requirements are generally a safe bet with the Chinese. They like receiving mailings and even feel flattered if they are personalized.
"When in Rome, do as the Romans do" - mailings need to take market attributes into account
Chinese mailing recipients' response to direct marketing highlights the fact that marketing campaigns which work splendidly with domestic consumers cannot be transferred on a one-to-one basis to other countries.The reason being that even though the world is moving more and more closely together economically, regional characteristics and different mentalities continue to coexist. Advertising media, their importance and impact, legal provisions and consumption behavior differ from country to country with the result that marketing is subject to completely different laws in one's own country than international advertising activities.
Zoom image: Response behaviour to mailings
To give an example: whereas colorful mailings go down extremely well in Eastern Europe, they are less well received in Scandinavian countries. Even samples, which generate a positive response in most countries, receive less attention in Scandinavia. For Scandinavians, it is how well-known the sender is that is the decisive factor. In Asia, on the other hand, using a personal targeting approach and giving mailings a local look is extremely important.
Klaus Knappik, Chairman of the MAIL International Divisional Board, Deutsche Post World Net
Dr. Diane Rinas, Senior Marketing Manager, Deutsche Post World Net
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Klaus Knappik, Chairman of the MAIL International Divisional Board, Deutsche Post World Net
Dr. Diane Rinas, Senior Marketing Manager, Deutsche Post World Net
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