China: Creators and Consumers of
the Future March 2012

The following is glimpse of
our research efforts in China. Our ongoing goal is to understand the evolving attitudes and behaviors in China across a variety of topics and industries through the lens of everyday life. Cultural dynamics Automotive Healthcare Retail Mobile

There is a growing trend
of Chinese consumers choosing to customize and even produce their own products. With easier Alien access to both the raw ingredients of products as well as being surrounded by factories, there are millions of potential new Wang Chinese designers creating their own products, both for themselves and to sell to their own customers and other like- minded individuals.

Cultural dynamics
4

In China, everything from batteries
to burgers is available for home Delivery delivery. This is an inherent response to the amount of people able to work and the ability for businesses to leverage competitive advantages for new forms of convenience.

Regardless of what is being
bought online, goods are usually paid in Payment cash upon delivery. This ‘concierge’ moment opens opportunities for brands and services to create additional value.

The impact of the one-child
policy means that both parents and two sets of grand parents are focused entirely on a single child. This has Policy ramifications on a number of behaviors - from healthcare to education and retail to technology. As this policy shifts or loosens, how will behaviors change?

Gaming is an integral part
of the Chinese culture - as much for communication and relationship building as for entertainment. This is evident in the groups of young professionals playing Gaming games on weekends as much as older folks enjoying mahjong. The education industry has been able to leverage this behavior for the youth, with the creation of games that focus on the history of China.

In Western cultures, the well-being
of a child is often measured by their health & happiness. The focus is on being ‘good enough’ and Education enjoying their childhood. In Asian cultures, parents emphasize the need to compete and excel - starting from a very young age and persisting beyond adolescence.

The dynamics of 3-generational households
are immensely relevant in modern day China. The question then arises - how can we keep all Generations age groups engaged, and even more - enable better interaction amongst the family members of different generations?

The flow of people and
their physical boundaries are more dense Scale than ever before. The fastest and most massive urbanization in the history of mankind has created new norms in how people and information move through a society.

Automotive
12

1977: 1 million = 1.000.000
cars In 1977, In all of China - there were only 1 million cars

1977: 1 million = 1.000.000
cars By 2008, this had shot up to 51 million

And it only took 3
years for it to nearly double to 100 million by 100m+ 2011. 1 million 1977: This extreme exponential growth leads to questions about trafficcars = 1.000.000 Automobiles management, purchase consideration, the influence of branding, environmental concerns, and various other factors.

Given the lack of trust
within communities, people are often Safety scared of being falsely accused of causing an accident. For this reason, drivers protect themselves by using a special camcorder Records attached to their windshield or dashboard to keep a video record of their driving.

Post accident video footage. This
is a 2 hour diversion to settle “out of court” at a factory late at night after an accident in Beijing.

Given high congestion on most
roads, it is extremely difficult to drive up to the speed limits (e.g., fast) within major cities in China. Safety For this reason, experienced drivers are not too concerned with keeping passengers safe by using a seatbelt. Given the trade off with Concerns personal comfort, they buy ‘belt buckles’ that can be plugged into the seat belt holder to stop the sound of the safety reminder.

Online communities are a rich
and trusted source of information for Online car specifics. Prospective buyers turn to independent online forums to research specific details about cars before making a buying Communities Online communities decision.

Chinese consumers pay greater attention
to detail when it comes to Detailed the performance of their car. Young Chinese consumers take pride in being knowledgeable and then sharing that knowledge in their social Performance circles or online. This need for knowledge is partly driven by the large number of new / inexperienced drivers on the roads.

Healthcare
21

8.87 118 million Aging and
growing Population % over 65

American v Chinese patients USA
CHINA 8x 40 - 60 # of patients per day for junior docs # of patients per day for senior docs 10# of minutes spent with patients High Patient As doctors grow in seniority, the number of patients they are likely to see also increases. In fact, the average amount of time a doctor in Throughput China spends with his patient is just ten minutes.

There are dedicated services to
help the elderly manage Help With everyday life. China Telecom is leading the way in serving the elderly by offering special packages, more basic phones, and Daily Life phones with pre-installed services that allow people to reach out for assistance with tasks such as paying bills, managing their homes or even contacting relatives.

Extending Due to time limitations
on face-to-face interaction with doctors, hospitals and clinics use text messaging to provide pre- and post- Advice visit advice to patients via mobile phones.

New mobile services such as
名醫導航 - aka “Ming Yi Dao Hang” or Scheduling “Doctor Navigation” (114-91.com) allow advance registration for medical appointments, to help ease the long queues and hours of waiting in line.

Retail
27

In Q1 of 2012, Chinese
shoppers spent USD $5.7 billion The Rise Of overseas.This is not only more than any other country, it’s the highest amount ever recorded. In parallel, sites such as USzCN.com The Shopper have become immensely popular as Chinese look to purchase goods which could otherwise not be found in their country.

Rather than collecting and clipping
coupons, Velo allows customers Coupon to check local deals at Metro stations. All you have to do is buy a special card online and swipe it to get a coupon of their choice. This Culture model allows local restaurants to build awareness and attract new customers.

Negotiation One of the reasons
Best Buy failed in China is that their advertised premise of matching the lowest price advertised can be irrelevant in vs. Listed China. Regardless of the price tag, bargaining is an expected aspect of the purchasing process and retail assistants often keep a list of Price the final lowest prices to help guide this process.

Taobao’s Taobao recognizes that bargaining
is essential to the purchase process. One of its most popular features allows buyers and sellers Bargaining to connect and chat, in essence recreating the traditional bargaining process.

IKEA’s From the outside there
is very little to tell this IKEA apart from any of Experience their stores worldwide, but step inside and patterns of behavior differ significantly to western norms. Hack

Families often make a special
effort to dress well for the trip to IKEA, Memories taking their cameras along to take photographs of their child in an IKEA environment.

People will often take their
newspapers or other reading material At Home with them, and enjoy the comfortable environment of a display room for an entire afternoon.

Takeaway In fact the meals
at the IKEA canteen are so popular in China that it has led to the creation of a unique take away service.

Dating With free coffee and
air conditioning, there is even a thriving senior citizens dating scene at IKEA on Thursday afternoons.

Made to Another phenomenon that
is uniquely Chinese is the practice of bringing a carpenter to IKEA to help you select and measure Measure furniture that can be made for much cheaper elsewhere.

Mobile
38

900 million by May 2011
1 billion by May 2012 70 % of the population 36 % on the mobile net* *mobile is first, last, & everything

12:00am Jan.13, The launch of
iPhone 4

Xiaomi phone 100,00 Despite the
booming popularity of Apple in China, the clear The Year Of winners are the masses of people purchasing low end smartphones powered by Google’s Android OS. This is the default The platform on hundreds (soon, thousands) of cheap, low-end smart phones and subsequently the first choice for many consumers Android? beyond Tier 1 cities (whether or not they know the software is Google).

36 months 微信 (Weixin) 10
months Above: time for each product to reach Speed & Scale 50 million registered users

Products like Weixin historically have
been viewed as Western copy- cats but this reality is shifting as they gain the ability to outpace Setting New their Western counterparts in both time to market as well as a desire to experiment with interesting ideas before they’re seen in the West Standards (shown here: voice chat, shake to find someone, and message in a bottle).

Token’s work to release an
electric version of the Honda Token Zoomer, dubbed X-Zoomer, in China before Honda could launch the gas-powered version shows just how powerful one determined person can be. He’s now gone on to create a new Hu line of patented shoes based on DuPont’s Tyvek technology - United.T, the lightest shoe on record.

Kajal Vatsa (@kaj186) Brandon Berry
Edwards (@bred) special thanks to... Jan Chipchase Emily Chong Ailadi Cortelletti Shine Chu Lydia Kuo Leizhong Zhang the frog Shanghai team the Shanghai creative & tech community photography credits: Jan Chipchase Brandon Berry Edwards Token Hu Lydia Kuo Kajal Vatsa Alien Wang Leizhong Zhang © 2012 frog. All rights reserved.