Chinese Dream: A New Window of Opportunities
From 1776, generations of Americans deeply believed in “the American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement” (James Truslow Adams, Epic of America, 1931). Everyone deserves the opportunity for prosperity and success as long as they earn it through hard work. Just like the Statue of Liberty, the American Dream is an icon of the American spirit.
On 18 September 2014, the Alibaba Group (阿里巴巴集团) was floated on the New York stock market with its initial public offering (IPO) raising USD 21.8 billion for the company and its investors, making it the biggest IPO in US history. Only 15 years ago, the founder of Alibaba, Jack Ma, was just an English teacher, earning 20 dollars per month, currently Forbes ranks him the 36th richest person in the world. His story sounds like a typical American story, achieving the dream through his own ability and hard work; and yet it is a Chinese story.
-Alibaba founder Jack Ma interviewed at the New York Stock Exchange (Copyright: Xinhua)
In November 2012, the Chinese President Xi Jinping (习近平) articulated a vision for the nation’s future: the Chinese Dream described as “national rejuvenation, improvement of people’s livelihoods, prosperity, construction of a better society and military strengthening.” The term became a hit with the Chinese media and has gained popularity.
Xi inspired young people to “dare to dream, work assiduously to fulfil the dreams and contribute to the revitalization of the nation.” Having a better life than their parents is most people’s dream, and going beyond just purchasing daily necessities for everyday living is one of the many ways to improve the quality of life. Consumption preference can reflect living attitudes of the individual. Thirty years ago, even a TV was a luxurious appliance for most Chinese young people, but now in China, the sought-after objects of the younger generation are a home and a car. These priorities led to a 50 percent increase of SUV sales in China in 2013. (BrandZTM, Millward Brown Optimor, 2014). To fulfil dreams, people will take action in different areas of their lives, such as get a better education, or work harder at their present jobs. In the economic area, dreams can encourage people to consume, and they also drive the development of the economy.
Realising the power of dreams, WPP, the world’s largest communications services group, conducted research, and published a report titled The Power and the Potential of the Chinese Dream. After analysing the data, the WPP group gives insights about the power of the Chinese Dream and its potential impact on brands.
In the report, they compared the national dreams of China with those of the US and the UK. After comparing the answers from respondents in these countries, they found that the awareness of the national dream in China is the highest. Over half of the Chinese respondents say they are quite familiar or very familiar with their national dream, compared with 43 percent of the Americans, and only about 8 percent of the British.
The research group also compared the consumer behaviour of people from these three countries. They drew the conclusion that Chinese are both enthusiastic customers and dreamers. Encouraged by dreams, people tend to seek higher quality of life; for instance, many Chinese are not satisfied by only travelling domestically, a substantial amount of them wishes to travel abroad. In fact, many Chinese have already done so. China is expected to to rank fourth in the world in outbound travel by 2015, according to the World Tourism Organization. In 2013, two of the major international carriers in China’s flight market, Air China (中国国际航空公司) and China Southern Airlines (中国南方航空公司), added new international routes. Air China increased the number of routes to Europe, including a flight between Chengdu (成都) and Frankfurt, the first direct flight between a southwest city of China and Europe. China Southern also expanded its flights to Europe, Australia and New Zealand. Especially in the rising middle class in China, people seek to improve their personal well-being.
Every brand has a personality. In the Chinese Dream research, customers describe every brand based on the 20 characteristics from the BrandZTM research. They also use the same approach to identify the characteristics of the Chinese Dream. After analysing the data, they found that some Chinese brands share the same characteristics with the Chinese Dream. These brands come from a wide range of categories. Some brands from the area of technology, like Baidu (百度), Alibaba or Tencent (腾讯), represent the emerging industries of Chinese brands. In contrast, some brands have a long history in China, e.g. Tong Ren Tang (同仁堂) and Yunnan Baiyao (云南白药). They represent the traditional Chinese brands and share the characters of stability with the Chinese Dream. Both of the two kinds of brands have enjoyed sustained development in the last several years, for instance, Baidu’s income in the second quarter in 2013 increased to RMB 7.6 billion (USD $1.2 billion), up 38.6 percent from the same period in 2012; Tong Ren Tang’s net profits rose 29 percent to RMB 330 million (USD $53.9 million) in 2012.
According to the report BrandZTM top 100 most valuable Chinese Brands (2014), most of the brands that Chinese customers associated with the Chinese Dream increased their brand value in 2014. What other opportunities will the Chinese Dream bring to brands? In the second part of the report based on these findings, five possible implications for brands are provided: bridge the gap; believe the dream; relieve the concern; understand the expectations, and realise the development. These key points might be inspiring for emerging market players who would like to develop in China’s market.
Bridge the Gap
Compared with the US and UK, the personal and national dreams do not always coincide with each other in China. The Chinese Dream is more top-down compared with the American Dream or the British Dream: the Chinese version is published by the Chinese government. About 53 percent of Chinese people agree that being a “powerful country” is a part of the national dream, but only 19 percent add “powerful country” to their personal dreams: they feel the prosperity of the country is beyond the control of individuals.
Over two-thirds of Chinese people believe that the recognition of a Chinese brand overseas can represent the increase of China’s influence on the global market. Alibaba’s success will make the Chinese more confident in their national brands. The products and services of Alibaba allow millions of customers to enjoy a more convenient life. For example, its online shopping website, which is called Taobao (淘宝), provides its customers with a wide range of goods that are significantly cheaper than in ordinary stores, hereby helping people to improve the quality of their lives. Alibaba is helping Chinese people realise the development of China’s economy, and make the Chinese dream more relevant to individuals’ lives. Brands can help bridge the gap between the Chinese personal dream and the national dream.
Believe the Dream
Improvement of people’s livelihoods is one of the major goals within the context of the Chinese Dream, thus Chinese people tend to believe the national dream for practical reasons. The remarkable economic growth of China over the past 30 years has lifted over 200 million people into the middle class. This new middle class would like to improve their lives by buying goods, like cars, that they were not able to afford a generation ago. Now cars have become a common sight, even in smaller cities and rural areas. In 2013, the growth rate of car ownership in smaller cities in China exceeded 30 percent.
In fact, 70 percent of the respondents believe it is important to achieve the Chinese Dream. Chinese people believe that the national dream can improve their lives in practical ways, so it can have real opportunities for brands.
Relieve the Concern
When interviewed, Chinese people expressed their concern about pollution, food safety, education, health care and the retirement system. Brands have an opportunity to help improve the quality of life of Chinese people by offering products and services focused on these concerns, or at least by not causing any further concern.
The Yili Group (伊利集团), which ranked 6th in the list of Trusted Chinese Brands in China, and top of the food & dairy category (BrandZTM, Millward Brown Optimor, 2014), launched its European Research and Development Centre in cooperation with Wageningen University & Research Centre in the Netherlands. Food safety is one of the three main research priorities of the centre. Pan Gang, the CEO of Yili, said that even though it is a huge challenge for the centre to figure out what’s the better dairy food for the world, it is still a chance they will not miss. In the Chinese Dream report, Yili is in the top 10 Chinese brands that match the Chinese Dream. For the first half of 2013, Yili’s net profit was RMB 1.7 billion (USD $285 million) and revenue was RMB 23.9 billion (USD $3.9 billion).
-Galaxy SOHO, Beijing (Copyright: Du Yongle)
Understand the Expectations
Over one-third of respondents in the research say that the US currently is the most ideal country. But this percentage changes dramatically when the question is asked which country will be ideal in ten years. Then, only 14 percent of Chinese answered the US, while 42 percent answered China. Meanwhile, the Chinese have the most optimistic view on their economic growth: 39 percent of Chinese people have the expectation that over the coming 10 years China’s economy will expand 7 percent or more annually, while only 6 percent of Americans and 7 percent of Britons expect the same growth rate for their country.
During the research, a substantial amount of respondents expressed that they expect China to become a much more powerful and flourishing country in ten years. By understanding the expectation, brands can find some opportunities from the change that China is going through.
Realise the Development
In this report, most Chinese people say that the Chinese Dream is about shifting the essence of the Brand China (品牌中国) (the overall reputation of Chinese products and services) from “Made in China” to “Created in China”. Huawei (华为), a leading technology company in China, has earned a grand total of 36,511 domestic and international patents up until the end of 2013. It now is the third largest Smartphone maker in the world, after Apple and Samsung, according to the Wall Street Journal .
Many Chinese people who were interviewed by the research group believe that Chinese brands, which have influence on the global market, can contribute to their nation’s reputation and power. Brands should realise that the development of the Brand China is a part of the fulfilment of the Chinese Dream, meaning that Brand China and the Chinese Dream are positively correlated.
Dreams are like windows showing dreamers an exciting new world. In the report, 79 percent of Chinese interviewers have a belief in the idea that dreams will make life better, and over half of them said that they are familiar with their own national dream. Material wealth is correlated with personal happiness; brands can, therefore, provide the ideal products and services to help Chinese customers to fulfil their personal dreams and bridge the gap between the national dream and the personal one. For brands, the Chinese Dream is also a window showing a perpetually growing China. Opening the window is like opening China’s endless opportunities market.