The world & #BANNER1 & # is looking at two countries, India and China. Together, they contribute one-third of the total world population. These markets have experienced a high economic growth of 9 per cent and 11 per cent, respectively, in the past few years. This has led to an explosion of consumer goods in both countries. More products on the market have created a rapidly expanding need for advertising as the competition for consumer attention intensifies.
A recent study conducted by Forrester Research on the Indian and Chinese markets throws light on how drastically different the consumers in these two countries are, despite the countries having similarities and attractive opportunities for all marketers.
Although the sample is representative of less than 4 per cent of the entire adult population in either country, there exists a market of 23 million metropolitan adults in India and 52 million metropolitan adults in China.
The survey largely indicated that the ad-saturated Chinese consumers are more like US consumers and require more sophisticated forms of advertising for persuasion. On the other hand, Indian consumers make it easier for marketers by continuing to respond to straightforward, offline advertising approaches.
The Indian consumers' attitudes toward advertising were found overwhelmingly more positive than that of the Chinese. Around 61 per cent of the Indians surveyed agree with the statement, 'Ads are a good way to learn about new products.' This is the highest of the 14 countries that were surveyed.
As many as 87 per cent Indian consumers trusted ads on television and 78 per cent, ads in print (newspapers) and agreed that the ads inform their purchase decisions. Modern modes of advertising such as the Internet were found to be underdeveloped in India as compared with other parts of the world. In India's large metropolitan areas, 75 per cent of consumers say that they do not have any online access. Compared to television and print, only 21 per cent trusted advertising on the Internet.
On the other hand, the responses of the Chinese consumers were uniformly low when asked whether they trust advertisements in different media channels. Trust for advertising on television and in print newspapers was found to be at 14 per cent each, while that for direct mail and magazines was at 9 per cent each.
One of the reasons for the difference between the consumers of the two burgeoning economies is the fact that India is less economically developed and has a per capita GDP of $3,700, which is just half of China's $7,600. China also ranks higher than India on most human development indicators. For example, India's current estimated adult literacy rate is an overall 61 per cent as compared with China's high 91.2 per cent. Therefore, the reach of written advertising in print automatically becomes less in India.
The Chinese advertising market is the third largest in the world, after the US and Japan. China's advertising spends are more than nine times that of India. China spends $36.9 billion and India, just $4 billion. But compared to last year, India's expenditure has grown by 22 per cent and China's by only 18 per cent. The growth rate in both countries is five times faster than the 4 per cent growth rate in the US.
In such a scenario, it is very important for marketers to pay attention to the levels of advertising trust in each country to guide region-specific advertising campaigns.
A growing middle class with increasingly larger disposable incomes means that new consumers will be rapidly entering the market in India's urban areas, but it will take time for metropolitan Indian consumers to develop repugnance for advertising. Taking these two factors into consideration, straightforward advertising methods that were effective in the West two decades ago or in Eastern Europe 10 years ago will be successful now with Indians. Television ads that explain what the product is and how it works are a marketer's best bet, with ads in newspapers and magazines following closely.
For Chinese consumers, marketers need to focus more on sophisticated, entertainment-driven advertising and take advantage of the large amount of online activity in urban China. Simple banner ads are appropriate for the Indian market, the Chinese market calls for more advanced forms of advertising, such as search marketing and advergames.
Coca-Cola's online strategy in urban China is to use a dedicated site and a partnership which ties together interactive marketing with addictive online entertainment. Coca-Cola's iCoke site starts with digital content, such as a flash movie with branded content and games. In a co-promotion with QQ.com, one of China's largest instant messaging providers, iCoke members can upgrade to the Website's animated version by spending iCoke points collected through Coke products.
Forrester Research is an independent technology and market research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. With the current report on the attitude of Indian and Chinese consumers, Forrester will be launching an 'Understanding Metropolitan China and India' report series. Subsequent reports from the company will deal with media trust, technology adoption, PC and mobile phone brands, activities and purchase processes.