Public Relations & Social Marketing Insight

For decades, Western companies have sought to understand Chinese consumers. And with market research firms now tracking every sector in great detail—from luxury goods to healthcare products to the latest trends in e-commerce—a more sophisticated picture of the market is emerging

.But companies still have much to learn about the cultural gap separating the average Chinese consumer from his or her counterpart in the West—just as they have much to learn about the distinguishing cultural features of any other market, from Brazil to Nigeria to Indonesia. Such knowledge may not have been crucial in the heady days of the 1990s, when the Chinese economy was still emerging and opportunities seemed to be endless.

But now that the market has grown and matured, expanding into China requires a deeper appreciation for the impact cultural tradition can have on consumer psychology.“In the early days, you almost didn’t need a strategy—you could make money as long as you had connections or guanxi,” says Angela Lee, a professor of marketing at the Kellogg School and an expert on cross-cultural issues in consumer behavior.

“But that’s not the case anymore. Now, those companies that have a genuine understanding of Chinese consumer culture are better placed to succeed.”...