Tom H. C. Anderson - Next Gen Market Research

As the US economy slows, looking for opportunities in other economies with high growth rates may become even more attractive.

For market research, one of the countries with highest growth last year was China, 12.7% vs. 3.4% in the USA (Net after adjustment according to IR 10/2008). Just before I left for Canada last week, my colleague Jesse Chen left for China on his second two week trip this year. We have been asked to conduct more and more international research projects, and worked very successfully with a partner company in China earlier this year.

It’s been some time now since my last visit to East and South East Asia and specifically China. I first visited the region in 1994 and subsequently decided to study the region as part of my graduate program in economics. This included attempting to learn Mandarin Chinese and in 1999 conducting field research among several joint venture companies in Shanghai and Beijing. Unfortunately this was also about the same time as the Asian Crisis. Ironically, the following year I returned to the US to also experience the Dot-com bust in 2000.

In any case, Jesse has been sending me feedback during the past couple weeks, including some of the pictures which I thought I would post today. As you can imagine, things look quite different as China has been changing very rapidly, especially the last few years prior to the Olympics. Below are a few of Jesse’s recent consumer observations.

Bruce Lee’s Chinese Food

Apparently, Bruce Lee is alive and well and selling fast food in Guangzhou?

We assume the franchise below obtained the permission to use his likeliness legally since it is a large chain. According to Jesse the food here is better than the average Chinese takeouts in the states. Yet they don’t have anything bizarre that would turn a westerner’s stomach. Perhaps we may have this chain in the US soon? Would be a lot better than Panda Express in shopping malls.

KFC Local Flavor

KFC, though still known as a fried chicken fast food restaurant, does not sell fried chicken meals as their main items. The KFC menu in China consists more of Subs/burgers than the menu we are familiar with (2 piece combo, etc).

I don’t think many people in the US would consider KFC for breakfast. In China, they have a unique breakfast menu. How about some “rice congee with pork and black eggs”?

Interestingly in Singapore, the KFC menu is similar to that of the US. It would be interesting to see the marketing study/report that led to the drastic change of the KFC menu in China. Though the menu in China seems to offer slightly healthier items than fried chicken, along with a variety of Chinese food, it is hard to believe that being healthier is the basis for menu alteration.

More likely it has to do with profitabiliy. In my opinion, KFC’s food choices here are very generic, I would think the US style menu with fried chicken as the main offering would be more distinct. But perhaps the lack of fast food (US style) competition here gave KFC the opportunity to offer more food choices than just banking on fried chicken. KFC is present on almost every other corner, so is McDonald’s.

Pizza Hut Upscale

Pizza Hut on the other hand is not targeted to the same market (it’s more upscale in China).

Chinese & Swedish Meatballs? 

IKEA in Guangzhou is exactly the same as everywhere else in the world, even the cafeteria. In fact the IKEA cafeteria is so popular it’s nearly impossible to get a seat.

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