BOOK REVIEW

Submitted By:

Rahul Rai

PGDM-RM

ROLL NO.- 37

Tom Doctoroff

Tom Doctoroff is the Northeast Asia Area Director and Greater China CEO for J. Walter Thompson, the author of Billions, and a leading authority on marketing in China and Chinese consumer culture, with more than thirteen years of experience in mainland China. He has appeared regularly on CNBC, NBC, Bloomberg, and National Public Radio and is frequently featured in publications ranging from the Financial Times and Business Week to The Wall Street Journal and The New York Times. He is also a columnist for the China Economic Review and the Chinese magazine Global Entrepreneur. .

What Chinese Want is an comprehensive exploration of the Chinese people — and more

specifically the different cultural, political and economic forces that shape their behaviors both as

business leaders and consumers. Author Tom Doctoroff, who has lived and worked for 14 years

in China as the regional CEO of the J. Walter Thompson agency, helps to understand the various

facet of this nation.

The Rules of Entrepreneurial Success

Doctoroff introduces readers to two entrepreneurs that illustrate the potential of Chinese business despite the seeming constraints of the Chinese culture. Cai Hua is the founder of Always, China’s most extensive field marketing operation. Ding Shizhong is the founder of Anta, China’s largest sports shoe and apparel manufacturer. "Between 2000 and 2010, both Always and Anta emerged from practically nowhere to dominate their domains," Doctoroff writes. How did they achieve such success? According to Doctoroff, their strategies and the leadership styles of their founders are quintessentially Chinese. For both men, scale is important; both have built enormous well-oiled networks. Scale prevents chaos — and begets security, Doctoroff explains.

Also, neither Anta nor Always have any interest in going global. However, they are very interested in learning from abroad to acquire a competitive advantage. Likewise, Anta and Always don’t want to create the breakthrough innovation of the future; they prefer incremental progress. Both companies are led by men who may be physically unimposing and softspoken, but who rule with an iron fist.

A Guide to the EastDoctoroff makes a fitting guide for China, having spent 14 years heading up JWT’s mainland

operations. International media (including China Economic Review) regularly look to him as an

expert on Chinese consumerism.

Chinese shoppers are a new breed – the average annual disposable income for an urban resident

is roughly US$3,000, more than ten times what it was in 1990, according to 2010 data from

China’s National Bureau of Statistics – and their habits have yet to be fully analyzed. What used

to be a country of subsistence farmers has rapidly become home to a middle class that drinks

Heineken and watches “The Big Bang Theory.”

What do these new consumers want? One of Doctoroff’s key assertions is that Chinese struggle

with two contradictory forces when it comes to consumption: the need to spend conservatively to

protect themselves and the desire to project their social status.

Essentially, China’s lack of a comprehensive social welfare system, product safety standards and

rule of law force Chinese at all levels of wealth to save much of their income in case of large

unexpected expenses. At the same time, however, Chinese value status symbol brands that can

convince those around them that they are ascending the socioeconomic ladder – being perceived

as an up-and-comer can help an individual personally and professionally.

Doctoroff applies his attuned marketing mind to showing the many ways this contradiction

manifests itself and how certain brands have positioned themselves to appeal to both of these

conflicting forces. Take, for example, BMW and Audi brand SUVs, which are immensely

popular despite China’s relative lack of soccer moms and opportunities for off-roading.

That’s because these models are viewed as both status symbols and pragmatic purchases.

They’re expensive, with buyers generally spending more than a year’s salary on the purchase,

but they are not frivolous like sports cars. The roomy back seat may show the driver is on his

way to having a family – the bedrock of Chinese society and hallmark of success, according to

Doctoroff. The cars are also large enough in case the driver someday climbs the corporate ladder

and needs to be chauffeured around in the backseat.

These kinds of generalizations feature prominently in “What Chinese Want.” Consumers value

safety in products first and status second; they mostly buy premium brands if they can be used in

public; and they prefer the reliability of giant corporations to small outfits. Doctoroff answers the

book’s titular question with bullet points rather than a cohesive theory: Youth want to live

double lives online, CEOs seek gradual growth rather than major innovative leaps, and parents

are willing to spend more on products that are both good for kids and enjoyable.

Experienced China hands may find some of his analysis a bit obvious. But such generalities are

unavoidable, and Doctoroff meets potential criticisms head on. Presented with hundreds of

millions of watchers, a Western adman can only proceed by making some basic assumptions,

Doctoroff writes.

There are also chapters where Doctoroff transcends such simplifications. In a stellar chapter on

marketing to aging Chinese consumers, he points out that only 10% of products are aimed at

seniors 50 years old and up. Yet this demographic makes up 21% of the population and will

climb to roughly one-third by 2025.

Doctoroff suggests that companies market to seniors as “wise elders,” emphasizing family and

allaying their insecurities about becoming socially irrelevant. Some companies, including HSBC,

have already begun to target this under-tapped demographic. “In one droll HSBC ad, a silver-

haired father wields a credit card to restore family harmony while paying for an expensive meal,”

Doctoroff writes.

But despite his often lucid analysis, Doctoroff fails to answer one big question that many China

watchers will want to know: Can China complete its desired transition to a more consumer-

driven economy? And if so, what will that new consumer in the revamped economy look like?

Doctoroff alludes to the question when he discusses the stunted service sector and high savings

rate, but he does not rigorously engage the question or attempt to present an answer.

Regimentation and AmbitionThe paradox of regimentation and ambition is reflected in the Chinese people themselves. "On one hand, the Chinese are cautious and self-protective. They are rule-bound, fixated with order, tentative in implementing change, obsessed with preserving face, understated in expressing opinions, and supremely hierarchical," Doctoroff writes. "On the other hand, they are ambitious and like to boldly project status, as evidenced by an obsession with luxury brands as tools of advancement." This "unifying Confucian conflict" between regimentation and ambition, self-protection and status projection, fear and confidence, leads to the philosophical driving force that keeps the nation moving forward, Doctoroff writes. In short, he explains, the Chinese "want to succeed by mastering convention." Maintaining stability is how you win. This overriding attitude leads to three timeless truths for the Chinese. First, everything is interconnected — which means that harmony rules. Second, chaos is evil and the only good is stability. And finally, the family, not the individual, is the basic productive unit of society. The Chinese, Doctoroff writes, are fiercely anti-individualistic.

My Learning

Though the country's economy and society are evolving rapidly, the underlying cultural blueprint

has remained more or less constant for thousands of years. Chinese at all socioeconomic levels

try to "win" -- that is, climb the ladder of success -- while working within the system, not

against it. China is a Confucian society, a quixotic combination of top-down patriarchy and

bottom-up social mobility. Citizens are driven by an ever-present conflict between standing out

and fitting in, between ambition and regimentation. In Chinese society, individuals have no

identity as they put up in a collectivist society, western individualism -- the idea of defining

oneself independent of society -- doesn't exist.

For me, the power of the book is how the author presents a comprehensive analysis of the culture

of China and its influence on the behavior of the Chinese consumer. The author presents the

various, and often perplexing traits of the customer, within the overall context of Chinese

society. He even breaks down the various markets and industries, and offers in depth

explanations of why the Chinese consumer acts as they do, and why those actions are so different

from customers in the West. The author dispels the most commonly heard myths about China, its

politics, and its economy.