Market research companies find opportunity in China

Western firms are bringing consumer polling to China.

Tourists in Tianenmen Square, Beijing, China (Photo: Ed Jones/AFP/Getty Images)

China’s manufacturing prowess has left many of the country’s trading partners wondering exactly what they can sell the Chinese in return. But there are a few industries the West is still much better at, among them consumer market research. And it’s an industry that, in China, is suddenly in demand.

With its booming middle class, China has become one of the fastest-growing markets for major global polling and data analysis firms. The demand for data about China’s increasingly acquisitive consumers has surged among multinational as well as domestic companies, and Chinese research practices are scrambling to keep up. Western specialists, including Canadians, are filling in the gaps, quietly becoming experts in Chinese tastes in everything from packaged groceries to luxury brands.

The reason China has been outsourcing some of its market research is simple, says Norman Baillie-David, vice-president of the Ottawa office of TNS, a research firm based in London, U.K., that has seen double-digit growth in China in recent years. “It’s the fact that in the Communist system, public opinion wasn’t valued until recently,” he says.

TNS—which employs Canadian staff—is looking to expand its branches in Hong Kong and Shanghai, and has opened offices dedicated to political and social research in South Korea, Vietnam and Cambodia. There is an exchange of knowledge taking place, he says, between westerners well-schooled in the art of public opinion and Asians with a better understanding of cultural nuances and local realities. “There are many Chinese expats who have studied in Europe bringing that expertise back,” he says.

Vancouver-based global consumer research company Vision Critical is following suit. Launched in 2000 by Andrew Reid, son of renowned pollster Angus Reid, Vision Critical opened its Asian headquarters in Hong Kong earlier this year and plans to have a branch in mainland China by the year’s end. The company, which builds websites and other online platforms that brands use to glean feedback from customers, maintains digital communities for Asian firms such as airline Cathay Pacific, media company Haymarket and Singapore-based telecom SingTel.

The marketplace is wide open. The number of Internet users in China rose to 538 million earlier this year, and the country’s retail sales grew 14.4% in the third quarter, nearly double the overall rate of GDP growth. While China’s political system remains undemocratic—its imminent once-a-decade leadership handover won’t require public input—its plugged-in populace is increasingly making its voice heard in various ways.

“Obviously, public opinion [in China] has been different from consumer sentiment,” says Reid. “But this ability to ask and find out why customers do what they do and say what they say is important for any brand.”

Vision Critical has worked to adapt to Asian shoppers, many of whom primarily use their phones to go online. “[Chinese] clients are requesting 100% mobile,” says Reid. Western data-mining firms have also had to account for cultural differences in various countries, says Baillie-David. That has meant making sure survey questions take Japanese standards of politeness into account, or mastering the new “languages” employed by users of microblogging site Sina Weibo, China’s answer to Twitter, which is increasingly being mined by marketers.

“Consumer issues have become an area where people feel they have a voice in a society where they don’t have a political voice,” says Professor Amy Hanser, who studies consumerism in Chinese society at the University of British Columbia. In a country where popular opinion is a sensitive topic, data does not flow freely, she says. In spite of this, domestic survey firms such as Beijing research consultancy Horizon have grown over the past two decades.

Increasingly worried about product quality and food safety, Chinese shoppers also take grievances about merchandise to the state Chinese Consumers Association (CCA). Hanser visited a CCA office years ago, where she observed a dispute between a local man and a company that sold insoles it claimed could promote children’s growth. “They didn’t make his kid taller,” she says. “He was yelling, ‘I’m going to the TV and the newspapers. You’ll never sell these again.’”

Hanser is doubtful consumer empowerment will pave the way toward citizen empowerment, however. “There’s no reason to think polling is somehow inherently democratic,” she says. In fact, there is evidence that official state opinion polls often work the opposite way—giving the public the reassuring impression that its voice is being heard, even when it’s not.