U.S. Firms Face Uphill Struggle In China
What are China’s increasingly rich consumers going to buy? Everything from color TVs to eye shadow, but American and even Japanese companies must fight lowcost Chinese competitors for a share of that market, said a survey released Wednesday by The Gallup Organization.
Billed as the first comprehensive look at Chinese buying habits, the survey substantiated many assumptions about the explosive growth of China as a consumer market after 15 years of market-oriented economic reforms.
Despite reporting a median income of just $500 a year, 32 percent of households surveyed planned to buy a color TV within the next two years, and 22 percent said they were planning to buy a washing machine.
Yet in a sobering note for American, European and Japanese exporters, the survey found most Chinese plan to buy Chinese-made goods, even when they’re in the market for electronics and other sophisticated products.
“Foreign companies ought not think of China as a playing field that they have all to themselves,” said Richard W. Burkholder, Gallup’s director of worldwide operations. “They are competing with local manufacturers who have very good qual ity, good management and low prices.”
The survey of 3,400 households in every region of China except Tibet was conducted from May 20 to Sept. 15 by pollsters for Gallup, which says it is the first foreign polling organization licensed to operate nationwide in China.
Gallup said its surveyers visited homes in every situation from city to remote countryside, traveling in some cases by foot and by camel.
Tibet was excluded because it is so socially and culturally different from the rest of China.
Among the survey’s other findings:
While just 1 percent of Chinese households have hot running water, 40 percent have color TVs.
The best-known brand in China is Hitachi, the Japanese electronics maker, followed by Coca Cola. The other American brands among the top ten bestknown were Mickey Mouse and Marlboro. Six of the top ten were Japanese.
Only 11 percent of Chinese women smoke, even occasionally, compared with 81 percent of men.
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