Slideshow Transcript

1. Slide 1: 15 February, 2007 ::Brainfood:: Dragon Rising Copyright ©2007 Fallon Worldwide. All rights reserved.
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4. Slide 4: Thanks for coming. So, let’s talk about China. Dragon Rising: The New China Changing cultural and economic landscape. The role of government in today’s China. Business and the booming consumer market. A cultural evolution. A company that’s doing it right. What could it mean for you? Copyright ©2007 Fallon Worldwide. All rights reserved. 4
5. Slide 5: “The world has never seen such a sudden and sustained rise of an economy that was so desperately poor just three decades ago.” Brian Bremner BusinessWeek: Why Taming the Dragon is Tricky Copyright ©2007 Fallon Worldwide. All rights reserved.
6. Slide 6: Everyday, we read about the incredible story that is China but without a clear understanding of how it affects our lives. As a global company, it’s a topic that’s more relevant than ever. Copyright ©2007 Fallon Worldwide. All rights reserved. 6
7. Slide 7: And with the 2008 Olympics being described as China’s “coming out” party, the buzz will only increase. The event will be the most profitable in Olympic history— over $1 billion in revenue from local sponsorships. Copyright ©2007 Fallon Worldwide. All rights reserved. 7 Source: International Olympic Committee Statistics
8. Slide 8: The nation’s growth has been staggering in recent years, sometimes beyond comprehension. Annual economic growth rate over the past 25 years: +9%. Urban population: 2001-2006 annual income growth +9%. Economy will become 2nd largest market in the world this year. More than 660 cities: 49 have +1 million people. Copyright ©2007 Fallon Worldwide. All rights reserved. Sources: The Economist Money Management Feb 2007 AdMap China Supplement Feb 2007 8
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10. Slide 10: It’s a complex nation, full of contradictions and constantly changing market dynamics. Copyright ©2007 Fallon Worldwide. All rights reserved.
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13. Slide 13: At the core of everything is the people. Their culture, values, aspirations and ambitions are dramatically shifting, and understanding them is key in figuring out how we fit in. Copyright ©2007 Fallon Worldwide. All rights reserved.
14. Slide 14: The role of government in today’s China. Business and the booming consumer market. A cultural evolution. Copyright ©2007 Fallon Worldwide. All rights reserved.
15. Slide 15: The role of government in today’s China. Business and the booming consumer market. A cultural evolution. Copyright ©2007 Fallon Worldwide. All rights reserved.
16. Slide 16: Chinese consumers are finally seeing their country taken seriously on the global stage. Aspire to be political, business, and cultural trendsetters. And they know the world is watching. Copyright ©2007 Fallon Worldwide. All rights reserved. 16
17. Slide 17: We’re witnessing the rise in national desire to be a country led by innovation, not just manufacturing. Leading the charge in areas such as stem cell research and the exploration of space. By 2050, they seek to be the global leader in science. Copyright ©2007 Fallon Worldwide. All rights reserved. 17
18. Slide 18: People are optimistic about the future, and see their government as a positive force. Copyright ©2007 Fallon Worldwide. All rights reserved. 18 Source: Pew Research Global Attitudes Project July 2007
19. Slide 19: While getting softer, the realities of a communist government often impede growing cravings for freedom and creative expression. Copyright ©2007 Fallon Worldwide. All rights reserved. 19
20. Slide 20: But despite some ugly realities, Chinese people today have a government more open to Western style consumption than ever. Copyright ©2007 Fallon Worldwide. All rights reserved.
21. Slide 21: The role of government in today’s China. Business and the booming consumer market. A cultural evolution. Copyright ©2007 Fallon Worldwide. All rights reserved.
22. Slide 22: Copyright ©2007 Fallon Worldwide. All rights reserved. 23
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24. Slide 24: While the future will be led by business and consumer culture in cities like Shanghai, people across the country are following the trends. Copyright ©2007 Fallon Worldwide. All rights reserved.
25. Slide 25: “Marketers who ignore the pent-up demand of 1.3 billion emerging consumers spending more than $700 billion do so at their own peril.” Noreen O’Leary AdWeek China Series Copyright ©2007 Fallon Worldwide. All rights reserved.
26. Slide 26: Brands are being redefined through a unique cultural lens. In many ways still new to a consumption culture, people are seeking out brands that align with their aspirations. U.S. China Cheap, quick Status, “face” Copyright ©2007 Fallon Worldwide. All rights reserved. 27
27. Slide 27: An unprecedented level of freedom is spurring real world business training and education. Border restrictions continue to loosen, benefiting all of us. 6.8 million Chinese traveled to Hong Kong in 2006. 80 million Visas were granted to residents previously unable to visit Hong Kong. Influx into China as well: 2nd biggest tourist spot by 2010, world’s premier destination (will pass France) by 2020. Copyright ©2007 Fallon Worldwide. All rights reserved. 29
28. Slide 28: At the heart of this is the emergence of a culture that is fueled by its aspirations for success. The auto industry is a particularly telling example. Fastest growing auto market in the world. Number of cars sold grew 22% in 2007 (8.8 million sold). Copyright ©2007 Fallon Worldwide. All rights reserved. Source: AdWeek China Series 2007 People’s Daily Feb 2007 30
29. Slide 29: “Consumer psychology is hierarchal here. Brands are markers in this ambitious society.” Tom Doctoroff JWT Copyright ©2007 Fallon Worldwide. All rights reserved.
30. Slide 30: The role of government in today’s China. Business and the booming consumer market. A cultural evolution. Copyright ©2007 Fallon Worldwide. All rights reserved.
31. Slide 31: Years of association with “cheap” and “fake” has lead to a craving for authenticity. Copyright ©2007 Fallon Worldwide. All rights reserved. 33
32. Slide 32: We’re witnessing the rise of a middle class starved for branded consumption. Current urban population with significant discretionary spending power is estimated to be around 125 million people. Projected to grow to 650 million by 2015. Copyright ©2007 Fallon Worldwide. All rights reserved. 34 Source: AdWeek China series
33. Slide 33: And the wealth of this group is expected to grow at astronomical rates. Copyright ©2007 Fallon Worldwide. All rights reserved. 35 Source: AdWeek China series
34. Slide 34: Status brands are the new badge of honor, and in many ways have created new lifestyles. Copyright ©2007 Fallon Worldwide. All rights reserved. 36
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36. Slide 36: It’s indicative of a broad cultural shift: a historically thrifty populace now eager to spend their cash. Copyright ©2007 Fallon Worldwide. All rights reserved. 38 Source: AdMap China Supplement Feb 2007
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38. Slide 38: Driven by curiosity (and ability) to explore the world beyond China, they’ve rapidly adopted technology and new media. More than 135 million Chinese are online. 43% use message boards. 76% are on video sharing. 24% are active bloggers. 400 million mobile phone users (compared to US: 250 million). Copyright ©2007 Fallon Worldwide. All rights reserved. 40 Source: CIC Data
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40. Slide 40: Nearly 80% of Chinese Web sites have some form of bulletin board system. Daily page views across boards: 1.6 billion (10 million new posts published every day). 45% of Chinese people who use bulletin boards spend 3-8 Copyright ©2007 Fallon Worldwide. All rights reserved. hours per day. 47% of users have bought products directly through a bulletin board. Source: iResearch Consulting Group 2007 42
41. Slide 41: In such a short period of time, they’ve more or less caught up with the developed world in the media they choose to engage with. Social Networking Professional Networks Online Video Copyright ©2007 Fallon Worldwide. All rights reserved. Source: China Internet Network Information Center Jan 2008 43
42. Slide 42: Young people in particular have leapfrogged technology adoption at incredible rates. In a survey of 15-21 year olds… China (Shanghai) U.S. Used IM Yesterday 91% 59% Engaged with Virtual Worlds 64% 22% Watched TV yesterday 19% 68% Read magazines 81% 20% Copyright ©2007 Fallon Worldwide. All rights reserved. 44 Source: Harris Interactive China YouthPulse 2007
43. Slide 43: The flip side to this amazing story is that, for much of China, this is all still a dot on the horizon. Copyright ©2007 Fallon Worldwide. All rights reserved. 45
44. Slide 44: But the tides are shifting. Copyright ©2007 Fallon Worldwide. All rights reserved.
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46. Slide 46: To help put what we’ve talked about today into context, let’s look at a company that’s shown it knows how to engage people in China. Copyright ©2007 Fallon Worldwide. All rights reserved.
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48. Slide 48: What implications may arise for us? Copyright ©2007 Fallon Worldwide. All rights reserved. 50
49. Slide 49: An incredibly complex and diverse nation of people demands a China strategy just as intricate. Copyright ©2007 Fallon Worldwide. All rights reserved. 51
50. Slide 50: We’re seeing a generation of entrepreneurial and creative minds redefining what it means to be a Chinese company. Copyright ©2007 Fallon Worldwide. All rights reserved. 52
51. Slide 51: The emerging young and affluent are poised to define China’s global future. Copyright ©2007 Fallon Worldwide. All rights reserved. 54
52. Slide 52: And developing a deeper understanding of this new generation is critical for our own future. Copyright ©2007 Fallon Worldwide. All rights reserved. 55
53. Slide 53: “To be successful in China, businesses need to stop lusting after the billions, and take time to understand the one.” Sandy Thompson, Head of Planning (Asia)—Saatchi & Saatchi Author: “One in A Billion—Xploring the New China” Copyright ©2007 Fallon Worldwide. All rights reserved.
54. Slide 54: Copyright ©2007 Fallon Worldwide. All rights reserved.
55. Slide 55: Check the blog and keep the conversation going: http://fallontrendpoint.blogspot.com QQ Coins eBay Dragon Rising Google China Co-Created Customization Eco-Friendly Avatar Brands Pollution Environmentalism P&G Made in China Black Gold Telecom Chery Asia Globalization Authenticity Brandz Chinese culture Instant Message China SMS Starbucks 3D Messaging More Chinese Going Local Middle Class Little Emperor General Motors Virtual Worlds Materialism Automotive Early Adopter Broadband Copyright ©2007 Fallon Worldwide. All rights reserved. Guanxi Tier Cities New World Order Communism Superpower Income Divide Playdo Virtual Life Brand Evangelists Connections Consumerism Plan for Action Community Plannerliness Futurist Brainfood Thought Leadership Agency Culture 58
56. Slide 56: Watch for next month’s invite to Brainfood. Copyright ©2007 Fallon Worldwide. All rights reserved. 59
57. Slide 57: Copyright ©2007 Fallon Worldwide. All rights reserved. 60