Under the sponsorship of the Organisation Support Programme of the Dedicated Fund on Branding, Upgrading and Domestic Sales, the BDC implemented "Chongqing Hong Kong Brand Week” Serial Activities. As a deliverable of the Project, the BDC commissioned the Brand Strategy and Innovation Centre of Hong Kong Polytechnic University to conduct a study on Chongqing and Western China market (the Study), which consisted of three interactive consumer panel discussions and a study tour to investigate Chongqing’s retail market and distribution channels. The Study analysed the Western China’s latest trends of economic and commercial developments, the current status and salient features of business environment, and the factors influencing consumers’ decisions to select and purchase brands especially Hong Kong products/services. It aimed to provide first-hand, in-depth market intelligence for Hong Kong companies’ reference when making their way into Western China, while helping local SMEs to adopt a systematic branding approach to exploring and developing domestic market.
With consumers in Chongqing and the Western China as the subjects of the research, the Study mainly relied on qualitative research methodology, i.e. focus group discussion, supplemented by simple questionnaire survey on the participants before the interview, in an attempt to gain insights into interviewees’ goals of life, personalities, as well as buying patterns, spending habits and perception of Hong Kong brands. The BDC also organised a business study tour in Chongqing, during which Hong Kong brand operators visited a representative shopping mall and a local enterprise that had successfully built up a renowned product brand. The tour gained fruitful results, and it in particular shed light on the strategies for Hong Kong companies to choose commercial zones and platforms when starting domestic sales in Chongqing.
The main conclusions of the Study are as follows:
1. As far as the pursuits of life are concerned, consumers in Chongqing and the Western China are relatively traditional and realistic, as the ideals that most interviewees described were neither challenging nor personalized. Consumption attitudes vary significantly among people at different ages; yet generally speaking, the four most important factors that consumers would take into account in the brand selection process are quality, value for money, word of mouth and services.
2. The post-80s and post-90s generations have become the mainstay of the purchasing power in Chongqing and Western China. Local young consumers are fond of fashionable, trendy and personalized products and services; and they are inclined to go for foreign brands rather than domestic ones when the financial conditions allow. Besides, online shopping has become a popular purchasing mode for this consumer group. On the other hand, along with the increase in household income and the improvement in retirement policies, the consumption potential of the middle class aged 50 years or over has been growing substantially; and under the influence of social media, Internet and mobile network, their consumption habits, perception of brands, as well as brand purchasing behaviours have gradually changed. Moreover, middle-aged consumers are quite generous to spending on the education of their second generation, while elderly consumers seem to have a preference for domestic brands.
3. Benefiting from the positive “country-of-origin effects”, "Hong Kong brands” as a regional brand concept is widely recognized by consumers in Chongqing and Western China. When it comes to Hong Kong brands, local consumers would usually refer to positive brand attributes such as “safe”, "good-quality”, "fashionable” and “low-risk”; and the most popular product and service categories include food and beverage, fashion and accessories, catering service, jewellery and watches, traditional Chinese medicine and health-care products. Consumers learn Hong Kong brands mainly via Internet, word of mouth, advertisement in bus stations as well as social media, while traditional media like newspaper, magazine and TV are relatively less important as channels of information acquisition. It is worth noting that most consumers in Chongqing and Western China would accept a 20% to 30% premium for Hong Kong brands as compared to similar products under domestic brands.
4. However, Hong Kong brands seem to fall short of marketing and promotion, resulting in relatively low brand awareness in Western China. Except for several brands that enjoy relatively high popularity nationwide, most of Hong Kong’s SME brands are still unfamiliar to Chongqing and Western China people. In addition, consumers have a vague impression of Hong Kong brands, and even mix up Hong Kong brands with brands from other regions.
5. The Study also reveals that consumers in Chongqing and Western China have no longer regarded “Made in China” as a negative label indicating “poor quality” and "cheap”. In regard to choosing a name for a brand, it is found that simple, easy-to-read and highly distinguishable English name would be more welcomed by young and middle-aged consumers, while helping to highlight such brand characteristics as trendiness and elegance.
6. According to the Research Team, when going to Chongqing and Western China market, Hong Kong enterprises could consider capitalize on the superior image and association values enjoyed by “Hong Kong Brand”; and they should try to match the core value and features of their own brands with such “country-of-origin effects”, while carefully determining the proper market segments, promotional modes and communication channels to fit in well with target customers. In particular, the rise of “new media” and social media should not be ignored; and Hong Kong enterprises should pay heed to the various advantages of Internet marketing such as high flexibility, wide coverage and imposing influences, and try to win the support of local consumers by integrating on-line and off-line (OTO) brand promotion and brand experiences.
(For a full report, please refer to the Chinese version重慶及中國西部市場消費者購買行為及消費模式研究報告)