China Consumer Behaviour

How do Chinese consumers act abroad?

In the past three decades, Chinese consumers’ shopping habits have changed dramatically as incomes have risen and new products and concepts have entered the China market. Consumer habits continue to evolve today, and examining generations of consumers can reveal certain shopping trends. Planet Retail has found that the older generation generally maintains “traditional” spending habits, middle-aged Chinese oscillate between tradition and new trends, and the younger generation is becoming more Westernized and quality conscious.

Generally, Chinese consumers develop shopping habits in their youth and keep these habits through adulthood. Though increased wealth can change some preferences, such as beverage and snack food preferences, most Chinese consumers’ habits are identified by their objective living conditions and limited earnings. The current Chinese consumer population can be separated into several groups with distinguishing characteristics.

Traveling to and from China has experienced in explosive growth. More and more tourists know where to find China as adventurous and mysterious country to travel around. Meanwhile, more Chinese people travel around the world.

However, the presence of Chinese people does not remain unnoticed everywhere. They are noisy, spitting everywhere on the street, defecate and urinate anywhere on the street. But not everyone is happy with the massive arrival of the next generation world travellers. Chinese tourists have different behavior than Dutch people.  They scream, throw everything on the ground, urging for and are rude. Especially in cities like Amsterdam and Rotterdam are the complaints growing about the Chinese tourists.

Trade risks China

What are the different possible areas of risks you could expect in relation to trading with China?
While the business climate and consumer confidence continue to decline in the West, China with its dynamic labor market, higher incomes and growing consumer demand has become an attractive market. However doing business to China involves a number of risks.

Not all goods can be imported freely into China. China classifies goods into three categories: prohibited, restricted and allowed. Some goods, such as toxins, may not be presented in the public interest or for the protection of the environment. The importation of certain goods is strictly limited, especially goods for which quotas or permits are required.
Just like in any other jurisdiction, the importation of goods to China governed by the local customs and tax regimes. Several factors affect the clearance requirements and the time required for clearance, including the valuation of the goods, the product code and their description. In practice, it is advisable for both parties to retain all documentation relating to the transaction because customs authorities may require all relevant import documentation and often very thorough and formalistic terms of clearing imports.
Explain in what way culture and understanding of the country as a whole play a role in increasing potential trade risk with China. Use examples to make your point.(this was also partially a preparation question)
People who decide to do business in China and to work with Chinese companies should take into account that the cultural behaviors are very different from what Western countries are used to. It is important in order to be successful to take this into account and adapt into Chinese culture. This can avoid misunderstandings and embarrassing situations, which could have an adverse effect on the business relationships.
In China hierarchy plays an important role in the daily life and certainly in business. It is important to find out who makes decisions within the company with which it cooperates and that is not always immediately apparent. The hierarchy determines a large part of who takes the decisions, but also matters such as who sits where at a dinner party, whose enter the meeting room first, etc.
An important item when starting a business in China is to build a circle of relationships. In China, as in many countries, relationships are important than knowledge. In China this principle known as 'Guanxi'. When one has developed such a network, things will be much easier and faster. One is introduced to new business relationships; bureaucracy suddenly becomes easier, etc. Of course guanxi has its negative sides, your relationships will also ask you for a contribution and it may be possible issues that you would rather not have to do. (Upton-McLaughlin, 2013)
What is in your mind the most important aspect to take into account when considering trade risk (in general terms)? There can be more than one answer to this question, argument your answer.
Despite the recent slowdown of the economy in the country, China is still a major trading partner of Europe. However, it does require a different approach to doing business.
There are unreliable companies all over the world, and China is no exception. If a deal seems too good to be true, which is usually the case, caution is therefore required. It is always important to know exactly who your potential business partner is. Depending on the kind of business you want to do, such as purchasing, sourcing, distribution agreement, technological cooperation or a joint venture, there are several issues that must be addressed.