GUANGZHOU - University students, it is
said, form a major class of consumers. And nowhere
is this more true than in China, where a
15-million-strong army of undergraduates is
increasingly keen on buying the latest high-tech
products, fashionable cosmetics and clothing, as
well as other famous name-brand goods, and shaping
their future consumption habits.
And the
market potential represented by Chinese collegians
will become even more enormous in the coming years
as their number is expected to grow steadily to
reach 30 million (including undergraduates and
graduate students) by 2010.
Under the
country's "one child" policy, Chinese parents are
willing
to
spend almost anything to ensure their children are
successfully admitted by a university - and
succeed once they are there, which leads them to
support their student offspring lavishly.
Last week, a record 9.5 million
high-school graduates across China participated in
the national university-entrance examination, to
compete for 2.6 million vacancies. On Wednesday
and Thursday, when the examination was held, many
hotels in big cities rushed to cash in on the
opportunity by offering rooms to accommodate
exam-taking students.
In Beijing, for instance, a
hotel launched what it called a "Number One
Scholar" package, offering rooms at 468 yuan
(US$58) per day - and all rooms were immediately
fully booked. Some four-star hotels near
examination sites even sold out 2,800-yuan
presidential suites. Restaurants served a popular
"Passing the Imperial Exam Meal" during the two
days.
Such expenditures, the parents feel,
will surely pay off if the students succeed in
passing the exam, to join the mass community of
"heaven's favored sons" - the undergraduates
across the country. Placing great hopes on their
kids, Chinese parents, particularly those in
cities, are more than willing to foot every bill
for their children during their undergraduate
studies, despite the fact that they could earn
pocket money for themselves in their spare time.
As a result, many undergraduates,
particularly those from cities, appear to be
increasingly sensitive to fashionable products
such as the latest-model mobile-phone handsets,
famous-name notebook computers, and up-to-date MP3
players.
Ms Lin, an undergraduate from
Xiamen University, said she spent some 3,000 yuan
each month, mainly on telecommunications, stylish
clothes and food. A mobile handset, notebook
computer and MP3 player have become "daily
necessities" for students nowadays, which enable
them to establish their personality and identity.
"On campus, students usually assess one's
[social] status by his or her dress, possessions
and manner, [and] nobody wants to be looked down
upon," she said.
Lin is by no means alone.
"I own, therefore I am" rather than French
philosopher Rene Descartes's "I think, therefore I
am" seems to be the popular mode of thinking among
China's status-conscious undergraduates.
A
recent study on the consumption trends, conception
of value and lifestyle of Chinese undergraduates,
and the effect of brand names on them underscores
the great consumption potential in colleges and
universities in major Chinese cities.
"The
China Undergraduates Consumption and Lifestyle
Study 2005", or CUS-2005, is the second of an
annual study initiated in 2004 and co-sponsored by
Sinomonitor, a Sino-Japanese independent market
monitoring company, and China Youth Zeitgeist
Cultural Co Ltd, a domestic media firm
specializing in university students. It sampled
9,000 undergraduates from 125 colleges and
universities with a total of 4.4 million
undergraduates in 31 major cities across China.
Apart from comparing the data with 2004 to
describe the change in consumption power and
spending breakdown in 2005, the report stresses
the study of the market popularity of various
commercial brand names and their selling venues.
The research shows that the top two items
of consumption of Chinese undergraduates are
information-technology (IT) and digital
communication products. And the undergraduates'
chasing after famous name brands originates from
their anticipation to become part of "the newly
well-off" class after graduation.
From a
business standpoint, a crucial issue is the
question of how specific brand names become more
or less favored during the four-year undergraduate
period and how this might affect actual
consumption.
Lin said she started to know
brand names during her freshman year. During the
four-year period, "I [assessed] brand names and
their price, even though I [could not] afford to
buy them at that moment." She said undergraduates
learn much about the brand names of sportswear
makers such as Adidas, Nike, and so on. Their
spending on clothes and cosmetics usually surges
in the last two college years, as undergraduates
started to look for good jobs after graduation.
According to the CUS-2005, the top 10
products whose brand names Chinese undergraduates
care about the most are: coffee (81%), digital
video recorders (77%), chocolate (65%), facial
makeup (64%), hair/skin cosmetics (61%), digital
cameras (58%), mobile handsets (57%), sports shoes
(49%), shampoo (49%), and desktop computers (48%).
One piece of good news for marketers is
that the research shows Chinese undergraduates
have strengthened their faith in the advertising
of consumer products. In 2004, less than half, or
48.9%, of the students agreed that "products that
are being advertised are more reliable". Last
year, the percentage increased to 69.1%.
The cultivation of customers loyal to one
or two brand names is an important strategy for
building a long-term customer base. Statistics on
the first four product categories show that the
first three brand names have remained basically
unchanged. Compared with 2004, increases in
spending on mobile phones, MP3 players and
cosmetics in 2005 ranged from 10% to more than
20%. For example, in 2004, 61.9% of undergraduates
had mobile phones, while in 2005, the figure rose
to 76.7%; in 2004, 11.8% of undergraduates had MP3
players, while the figure rose to 34.8% in 2005.
The CUS-2005 concludes that the four-year
period of undergraduate study constitutes a golden
time for the shaping and establishment of
commercial brands. Once the offered prices are
within their buying power, the undergraduates will
be driven by their yearning for and admiration of
the brands toward actually buying them.
It
can be seen from the comparison of the case
studies of the various trades that just as the
thirst for certain brands can quickly push them to
the top of the market, their being frowned upon
could let down with equal ease some once-popular
brands in a matter of just one year.
Two
"shining points" in marketing and sales last year
as revealed by the published data are the rise of
the market of cosmetic products for men plus the
extension of the market for women's makeup and
body-care products and the subdivision into finer
sub-markets of the specialty sport-products
sector.
On the sales side, campus media
and the Internet have shown outstanding
effectiveness as marketing channels. Such things
as new sports items, which the undergraduates are
fond of, also help to offer high-value sales
contact points.
With the seven main media
formats (newspapers, magazines, television, radio,
the Internet, cinema advertising and outdoor
advertising) in harsh competition, media are
ranked by undergraduates based on their
information content and credibility.
The
Internet, as a tool for time-killing and
entertainment, does imperceptibly affect the
undergraduates' buying behavior, while the
gradually maturing campus media figure
significantly in collegians' attachment to brand
names.
Moreover, public praise and the
powerful influence of "opinion leaders" play a
role in exerting an influence on undergraduates
through, for instance, the students' social lives,
community forums, and other means outside the
media per se.
The research also shows that
on average a Chinese undergraduate spends 9.3
hours a day on his study (10.6 hours for students
from the poor western provinces). This seems to
stem from the increased consciousness on the part
of these undergraduates that their educational
background (or, more accurately, knowledge
background) largely decides their fate nowadays.
The time spent on sport or physical
education is recorded to be about one hour per
day, mainly engaging in the four sports
traditionally most popular in China - basketball,
badminton, table tennis and soccer. However,
students also invest some enthusiasm in watching
and enjoying four newly popular sports:
volleyball, street dancing, Formula One auto
racing and tennis.
As regards the attitude
toward life of the undergraduates, one can clearly
see an upsurge in a sense of independence rooted
in their cherished "independence worship". The
collegians' strong sense of social participation
is manifested in their concern for the bigger
environment (ie, politics and current events) and
their activities within their social circles.
Finally, behind the group's fervent consumption of
technology stands a rational outlook that values
science and technology for their own sake.
David Pan is a freelancer based
in Guangzhou.
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