China and the Tyranny of Numbers

A foreigner I knew in Beijing said to me that he was once asked what China was like. He answered in a none-too-subtle way, "there are a lot of Chinese there."

The fact that China is the most populous country on the planet drives everything about the place. So many mouths to feed, so many workers to employ, so many consumers to buy products.

But the business world seems to regard this country with an adoration that borders on madness. They simply look at the raw numbers of potential customers and lose their collective minds.

What business leaders should be asking themselves is, does China really want what you are selling? Or would the people of China rather buy those products from a Chinese company instead?

Take, for example, the world soccer governing body, FIFA. According to an article in Time magazine about China's wish to host the World Cup football tournament:

"One thing is fairly certain: FIFA, the organization that runs the World Cup and decides the hosts, would likely do backflips if China tossed its hat in the ring, opening up the largest untapped soccer market in the world...there's an 'irresistible trend' toward China hosting the event."

Sure, China loves soccer, and that's great. But that doesn't mean enough Chinese people love soccer to make hosting the World Cup an automatic success. The marketing experts say, sure, but even if a mediocre amount of Chinese show up to buy your product, it means millions and millions more than are buying it than in the U.S., the U. K. or some other Western nation. So, they set up shop in Beijing and Shanghai, in Jilin and Jinan, in Qingdao and Chongqing, and wait in anticipation for the masses of Chinese customers to arrive.

Guess what? They aren't coming.

They are buying things from home-grown shops and stores instead. Clothes, cars, electronics, everything. There's no cachet to buying an imported brand, either. Chinese consumers were brought up to save money, not spend it, and they'll do it by increasingly buying domestic, not imported goods.

So, for those foreign companies expecting China will be their business salvation in the on-going global money crisis, maybe you should concentrate more on improving your marketing skills at home instead of taking them abroad. It will save you your shirt in the long run.

It's true, at any given moment, a million Chinese are doing something: buying cars, making widgets, eating, sleeping, spitting, something. That's a lot, but it's a very low figure on-average or by-percentage.

To paraphrase basketball coach Rick Pitino at the end of his unsuccessful run with the NBA's Boston Celtics, the Chinese consumer is not walking through that door. People in the Asian markets are a lot smarter than you think.