The Challenging Chinese Consumer Market

May 16, 2011

When foreign businesses such as Home Depot or Wal-Mart open for business in China, knowing the market and consumer is a good idea.

Most Chinese consumers have a different perspective than most Western shoppers when it comes to spending money. The average Chinese consumer born before 1980 prefers to pay cash and buy the best quality for the lowest price.

There’s also a difference in spending habits between younger Chinese born after 1980. Evidence suggests that younger Chinese have caught the credit card virus and are running up debt similar to the average American consumer.

Bob Schmitz writing for NPR’s Marketplace on Friday, April 8, 2011 says, “Home Depot not a hit in China.”

Schmitz talks to Raymond Chou, the CEO of Home Depot operations in China. When asked about closing five stores, Chou indicated this is not a sign of failure and said, “(Home Depot) has closed stores to focus on China’s lesser-known cities where much of the country’s real estate development is booming.”

One criticism Schmitz writes of is the fact that many of Home Depot’s products are made in China and may be bought for less from Chinese merchants.

However, one Chinese contractor says he shops at Home Depot because “It’s easy to exchange and return goods… and (he) knows the materials (at Home Depot) are safe and not fake.”

Wal-Mart critics may rejoice. According to NPR, Wal-Mart’s goals in China are to purchase a chain of retail stores there.

If this scheme will succeed remains to be seen. Wal-Mart has faced slowing business in the United States, is struggling in Japan and failed in Germany and South Korea.

Wal-Mart’s biggest challenge is to overcome its habit of fighting unions and paying low wages, which forces many workers to rely on local welfare and public-health programs. This isn’t welcome in some markets and is the reason why Wal-Mart left Germany.

For the same reasons, Wal-Mart, which is allergic to unions and paying workers a living wage, is facing a Chinese government that is strengthening worker protections and rights to organize/join labor unions.

Last summer, Wal-Mart was forced to allow its Chinese workers to join a union for the first time.

To understand the Walton family, Bizmarts.com reported, “As Sam Walton explained in his 1992 autobiography, Made in America, he didn’t believe in giving ‘any undeserving stranger a free ride’. Nor did he believe in being generous with company profits.”

Forbes reported that the Walton family was worth about 90 billion dollars or 18 billion each.

Discover how China is Holding a Vital Key to Humanity’s Future

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

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2 Comments | business, capitalism, China, Chinese middle class, cultural differences, economy | Tagged: , , , , , | Permalink
Posted by Lloyd Lofthouse

Chinese tourists Buying “Made in China” in the US – Part 2/2

May 7, 2011


I’ve been in the Number One Shanghai department store off Nanjing road and seen Chinese consumers taking TV’s from the box to insure they work.

Recently, my father-in-law and his wife were up at four in the morning walking to the Apple Store a forty-minute walk from our Bay Area house.

To buy an iPad 2 in America, they were willing to get up that early and wait in line for several hours until the store opened to buy this new Apple product.

When I asked why not buy the iPad 2 at one of the Official Apple Stores in Beijing, I was told  if you buy something in the US even if made in China, the buyer can be assured of the quality.

There is some truth to that. My father-in-law’s wife arrived with a new camera bought in China.

The camera stopped working the first week she was here so she bought an expensive Sony and loved it because it worked just as promised and kept on working.

It would seem that Chinese manufacturers have a long way to go to earn the trust of the Chinese consumer.

Meanwhile, sixty million Chinese tourists are leaving China annually and buying “Made in China” outside of China then taking those purchases home.

Ironic, isn’t it?

Start with Chinese tourists Buying “Made in China” in the US – Part 1 or discover Chinese Gold from Dead Tibetan Caterpillars.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

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Chinese tourists Buying “Made in China” in the US – Part 1/2

May 6, 2011


Shaun Rein, a CNBC contributor, reported, “China is on the verge of overtaking Japan as the world’s largest consumer of luxury good, spending $13 billion, or 22 percent of the world total, in 2010.”

However, In Who Buys Guccis and Omegas in China? Not Just the Billionaires, Rein says, “Only 40 percent of the $13 billion worth of luxury items sold to the Chinese last year were transacted (bought) in the country.”

Reign says that is because it is 30 percent cheaper to buy luxury products in another country due to taxes and tariffs.

There is another reason why many Chinese tourists buy “Made in China” in other countries.

While my Chinese father-in-law and his wife were visiting in the US, I learned why Chinese buy in the US — quality.

If you read the China Law Blog, you may know that in China there are several levels of quality that do not exist in the US.  When buying anything in China, there is always a risk you may end up buying a fake or the real thing but of a lower quality.

From what I have read at the China Law Blog, it seems there is no way to tell which level of quality you are buying when in China.

That doesn’t mean “Made in China” is always of a poor quality. The language of the contract between the foreign buyer such as Apple and the Chinese manufacturer is important.

In fact, most of the products Apple sells globally are assembled in China and many are manufactured there too (Apple has manufacturing facilities spread around the world but assembles most of its expensive electronic items such as the iPad in China).

This explains why the Chinese in China often if not always make sure a computer or a TV (along with other merchandise) works before buying and taking it home.

Continued on May 7, 2011 at Chinese tourists Buying “Made in China” in the US – Part 2 or discover the Copy Cat Middle Class in China.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

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Posted by Lloyd Lofthouse

China’s Sexual Revolution (viewed as single page)

April 27, 2011

The world’s biggest country is going through the world’s largest sexual revolution. From the Internet to corner sex shops, China is changing. However, lost in the mix, millions of single men cannot find a date much less a mate.

Changes are talking place as China goes through the West’s 60s rebellion. Mao’s Little Red Book has been replaced with a black book filled with phone numbers and date info.

Mao’s taboos against capitalism and sex are gone. With these changes comes the dark side—drugs, prostitution, HIV and STDs. Under Mao, sexuality was almost done away with. Everyone wore the same baggy colored clothes. Everyone had the same haircut. Couples that fell in love and were caught were punished. Today, cosmetics, perfume and stylish clothes have replaced Mao’s uniforms.

Millions are learning about romance and love. However, millions of others have been left with sexual, psychological problems and are very ignorant about sex. They were victims of Mao’s Cultural Revolution‘s sexual repression.

According to a 2004 survey, only twenty percent of Chinese men know where to find the clitoris, while fifty percent of Chinese women haven’t had an orgasm. Sexual ignorance and dysfunction is common. Mao’s Cultural Revolution left invisible scars.

China also has a new, popular holiday,Valentine’s Day. On February 14, cupid and roses have become fashionable. Nightclubs hold Valentine’s festivals where couples meet, drug use is common and kissing leads to sex.

Private businesses that cater to romance and sex are flourishing in China. Some shops are a cross between a sexual education center that also sells adult sex toys. In Beijing, there are an estimated five thousand sex shops and business is booming. This industry is worth billions.

When the first graphic sex Blog came online, the server crashed and was down for days. When the government censors shut down a sex Blog, more replace it.

In China today, teen girls are living lives their parents never imagined and do not understand. The teens are very open about what turns them on in a guy. Many do not care what their parents think. They only want to have fun.

Listening to the conversation between this group of Chinese girls sounds like listening to spoiled kids in the US talking.

The teens often go out clubbing and the nightclubs are equal to or better than the best in the West. The nightclub featured in the video has life-sized wall paintings from Cultural Revolution posters while teens dressed in sexy clothes dance and grind to loud music. These changes started in the late 1990s.

Even in China’s rural villages, the sexual revolution has been felt as millions of young women leave the villages to the big cities and experience what the urban Chinese are doing. The first stop is the hair salon.

The media is even climbing on board this sexual revolution. Glitzy magazines, like the Chinese edition of Cosmopolitan, feature the stylish, hot and sexy.

China’s one-child policy, created to control the growth of the population, is complicating the sexual revolution.

By ending the pressure on Chinese women to have many children, this has liberated them to do other things. Now Chinese women have the freedom to get an education and find a paying job.

The one-child policy also created another problem. Since Chinese families have always favored having boys, many women get abortions when the fetus is identified as a female. This has led to a growing imbalance between the number of men and women.

Now, millions of poor men cannot find a mate. With so many poor men unable to find women, gangs and crime have become a problem.

China now has the fastest growing sex industry in the world. A decade ago, there was little prostitution. Today, there are many brothels masquerading as massage parlors. Some are modeled after the brothels in Thailand.

Capitalism has arrived in all its guises, and the same problems the US has with sex slavery and drugs is now a problem for China too.

Most prostitutes are village girls and have no idea about safe sex. This is causing an increase in HIV. Many of the men refuse to wear condoms. Sometimes, when the girl says no, the paying customer will rape her.

The sexual revolution in China is a fragile one. While the new China supports it, the old China is afraid of these changes. Adultery and divorce are on the rise. Kids are leaving home. There is a growing generation gap.

One older Chinese man says that China is not used to this. Under pressure from the older generation, the police must crack down, raid bordellos and arrest prostitutes.

However, now that China’s sexual revolution is in the open, it will be hard to stop. At first, the government tried to stop what was going on but soon backed off. In addition, many parents, who grew up in Mao’s puritanical era, don’t want their children to experience the same repression.

These changes are talking place while women are gaining power and many families now value having female children. Few want to return to the way things were.

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Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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1 Comment | capitalism, China, Chinese Culture, Chinese men, Chinese middle class, Chinese women, economy, environment, family values, parenting | Tagged: , , , , , , , , , , | Permalink
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Predicting the Fall of a Civilization – Part 2/2

April 13, 2011


I’ve talked to enough Chinese to know that it is a commonly held opinion that if the average American eats and raises children a certain way and the US is  the world’s only super power, then if the Chinese eat and act the same way, China will become the next super power on the block.

This flawed belief may explain what my friend (in Part 1) wrote about the spoiled children of China’s middle class being “WAY fatter” with a sense of entitlement.

It might also explain the exploding popularity of American fast food in China leading to an epidemic of obesity, diabetes, heart disease and cancer, which is parallel to what has happened and is still happening in the US.

To see if America and China are showing signs of an impending collapse, I checked Wikipedia’s Fall of Civilizations where a summary of the opinions of twelve experts are on display.

I will mention three of these experts.

Edward Gibbons in The Decline of the Roman Empire wrote, “The decline of Rome was the natural and inevitable effect of immoderate greatness. Prosperity ripened the principle of decay…”

Arnold J. Toynbee in his A study of History wrote, “The cause of the fall of a civilization occurred when the cultural elite became a parasitic elite.”

Jeffrey A. McNeely suggested, “A review of historical evidence shows that past civilizations have tended to over-exploit their forests and that such abuse of important resources has been a significant factor in the decline of the over-exploiting society.”

After reading what all twelve experts said about the collapse of civilizations, it was obvious that there may be several causes that bring on a collapse.

However, when three of the twelve all have different opinions and all three of those opinions are happening in America and starting to happen in China, this is a good reason to be concerned.

Return to Part 1 or discover The Next Super Power

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

Leave a Comment » | America, American culture, Chinese Culture, Chinese middle class, economy, environment, family values | Tagged: , , , | Permalink
Posted by Lloyd Lofthouse

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