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Understanding to invest: new challenges and opportunities of the Chinese market for Italian companies. Interview with Francesca Hansstein, marketing and sustainable business expert

Francesca Hansstein teaches international marketing and sustainable business courses at Italian and foreign universities and higher education institutes. She also deals with market research and is co-founder of Le Palette, a project that offers strategic consultancy to Italian and foreign companies that want to expand their reach into other markets.

In the book Consumer Behavior in China – New challenges and opportunities for Italian companies operating in the B2C sector, published by McGraw-Hill Education and published in November 2023, Francesca treasures the ten years she spent in China to describe the evolutions that have occurred in the tastes and purchasing behaviors of Chinese citizens living in urban areas, exploring how recent events have profoundly influenced consumer values, preferences and expectations. I took the opportunity to understand how our region fits into this context, especially from a tourism point of view since, after an extremely positive 2023 from a tourism point of view – we are in fact talking about 7 million presences and over 2.6 million arrivals – Umbria confirms itself as a reality of great appeal, both nationally and internationally. Opening up to new markets, addressing a series of problems deriving from the pandemic, wars, the problem of cybersecurity, environmental sustainability and so on, constitutes the real challenge, but also, if we want, an opportunity that our region and in in general our Italian peninsula will have to grasp to play a fundamental role in the next developments of the international panorama. And one of the most interesting realities is precisely the Chinese one.

 

Francesca Hansstein

 

So, Francesca, first of all, what drove you to write this book?

Thank you, Eleonora, for this interview. What drove me to write this book? Two main reasons. The first is of a personal nature. I spent almost ten years in China, working at Chinese and international universities between Shanghai and Suzhou. Both are cities considered first tier, that is, very developed and rather wealthy. I had the opportunity to directly observe the evolution of modern consumer behavior in various age groups. As a teacher, I have closely studied young Chinese people and their way of being and expressing themselves through purchasing choices. After the Covid pandemic, I settled in Umbria with my family, and here I brought with me all these memories of lived research. Wrapped in this special tranquility, I often found myself retracing in my mind the period of Chinese life and the experiences it brought with it. Here I decided to write this book, putting in black and white what, in my opinion, are the most interesting dynamics of consumer behavior in this large and complex country.The second motivation is instead linked to a desire to inform. I realized that the image of the Chinese community in Italy, especially in less urban contexts such as Umbria, can be quite distant from the reality of Chinese people living in modern metropolises such as Shanghai. I therefore decided to write this book also with the desire to tell the facets of China from a different perspective.

 

Puoi parlarci della metodologia che hai scelto per elaborare i dati? 

Il libro riporta sia dati qualitativi sia quantitativi: la maggior parte di esso si basa su dati secondari, cioè dati non raccolti direttamente da me, ma da altre fonti di diversa natura come, per esempio, quelle accademiche, o report di istituzioni italiane o europee operanti sul territorio, tra cui ad esempio l’Istituto del Commercio Estero. Ho arricchito poi il manoscritto con dei dati primari raccolti con l’aiuto dei miei studenti e dei casi studio aziendali.

 

 

How is it organised?

The book consists of seven chapters. The first is introductory and describes the evolution of the socioeconomic and political context in recent years. The aim is to transport the reader into the Chinese context. The other chapters are each dedicated to a specific theme in the consumer sector, therefore food, fashion – with particular attention to luxury fashion – cosmetics, home and furnishings, and free time. In the final chapter of the book, I outline a series of operational strategies for companies interested in entering the Chinese market. I offer practical advice on how to take your first steps in the Chinese market. The book is also enriched by the contribution of communication experts. In particular, Graziana Maellaro and Federica Caiazzo explored some issues of luxury fashion, while Lucia Gentili tells a testimony of hers in the final chapter.

 

Why did you focus on these topics?

Here too for two main reasons: the first because they are sectors in which we observe the most interesting changes and closely linked to technological development. They are the ones that are changing at great speed and that also offer food for thought and opportunities for growth.Secondly, these topics are key for Italian exports. If until about ten years ago Chinese consumers perceived Western brands as having superior quality and safety, in recent years they have instead tended to reward domestic brands. Since the latter are increasingly sophisticated and qualitatively advanced, the competitive landscape is now much more complex for foreign companies. All brands that want to enter the Chinese market must know how to communicate with the end consumer and it is no longer so easy to be successful compared to a few years ago. For this reason, in the book I decided to focus precisely on those sectors which, in my opinion, based on the research conducted and what I have had the opportunity to observe directly, are most promising for Italian companies.

 

 

These aspects are found in a concept that denies many stereotypes or slightly updates the image that we Westerners have of the Chinese. The topic I am referring to is the great effort – also in terms of communication and marketing strategies – to combine the past and the present. Can you explain to us what it is and why it is so important for those approaching the Chinese market to take it into consideration?

The Chinese today look for a mix of innovation and tradition in their products. The product must be innovative and offer something more in terms of added value. The latter must be immediately identifiable by the consumer, therefore communicated simply. While this is true everywhere, it is even more essential for the Chinese market due to the great competition that characterizes it. However, brands, especially international ones, must also demonstrate that they know how to strategically and effectively engage with local culture. Today, many include guochao elements, which literally means national wave. Therefore, I repeat, it is important to create a connection with the Chinese feeling, both from the point of view of crafting the product itself and for the construction of storytelling. Despite being a difficult challenge, thanks to the help of the many consultants or research agencies that operate on site and help create cultural bridges, these challenges can now be faced with good knowledge and strategy. A very recent example is the Valentino campaign launched on the occasion of the Chinese New Year, mentioned in Federica Caiazzo’s Moda in China newsletter. Chinese New Year represents a time of great celebration and family reunion and is the most important celebration of the year. To welcome the year of the Dragon, Valentino created videos in which there is no mention of clothes or luxury fashion. The videos focus on creating a connection with the color red, symbolically very important for this holiday and clearly also for the fashion house. A color that, for example, tells of traditions such as that of the red ravioli made in Quanzhou, a specialty that recalls the simplicity of the traditions of hidden places. Valentino therefore wants to communicate, on the one hand, a great respect for local traditions, and on the other a very in-depth knowledge of Chinese customs.

 

I suppose all this can turn into a boomerang if not used well. I’m thinking for example of the Dolce and Gabbana campaign of which you give an example in the book.

Exactly, it dates back a few years now, but the D&G case was perhaps the first most striking and demonstrative sign of how we now need to know how to communicate in the right way with Chinese consumers so as not to be offensive. A feeling of strong national pride has spread among the population and the Chinese consumer is today more attentive, more demanding, and with a very specific cultural sensitivity. Just like the market, consumers and their preferences have also evolved towards ever greater complexity. The speed with which this happened had negative externalities including counterfeiting, the spread of black markets or even those that were not exactly safe. Chinese consumers know this well, and this has made them very attentive and capable of distinguishing an original, safe and high-quality product from one that claims to be but in reality is not. However, authenticity is not enough and must be accompanied by respectful and prudent marketing. Perhaps if today brands like Valentino have learned to expertly communicate with the Chinese consumer, it is precisely thanks to the communication errors made in the past by other brands.

 

In this regard, another thing that you write in the book comes to mind, which is the issue of copies. A very controversial topic, especially for us Westerners.

Even if this is a legitimate fear for many Italian companies, for the Chinese copying is also an emulation aimed at learning. Trying to replicate a certain product as faithfully as possible is actually a sign of great skill, often of a manual nature. It is the same logic of apprenticeship, I am thinking above all of what happened in the artistic and artisanal fields, where we start from the reproduction of something that has already been created. It must also be said that today giant strides have been made in terms of copyright and there is much more stringent and effective legislation against counterfeiting than in the past.

 

 

Francesca Hansstein

 

Another aspect that struck me a lot is the fact that technology is extremely pervasive. I am thinking for example of testing cosmetics or rather colors using artificial intelligence. This is a situation that on the one hand is fascinating, but perhaps it could generate a little fear for some. In my opinion, all this reveals the characteristics of a society that is quite ready to accept the stimuli of technology, therefore I imagine that entrepreneurs should also consider these aspects. Is there any advice you could give to entrepreneurs who want to correctly use technological tools for their marketing strategies?

Yes, innovation and digitalization permeate Chinese society in every aspect. This is also thanks to the objectives that the Government has set itself, such as the Made in China 2025 program. Any company that today wants to enter the Chinese market must already have a clear and precise operational strategy in mind, especially in marketing and online sales . Indeed, digital is the first, and for some even the only, approach for entering the Chinese market, thanks to the widespread diffusion of e-commerce platforms. Now all large companies have an official account on WeChat, similar to our WhatsApp, but with a vast amount of features and where today you can do absolutely everything, from shopping to booking a sports lesson, and even doing a home tour before rent or sell an apartment. In general, the Chinese digital ecosystem is completely different from the Western one. Some applications are banned, such as Google, YouTube, Instagram or Facebook. Therefore, another important step before entering the Chinese market is certainly to study and understand how the digital market works, identify the target you want to reach and what type of digital tools it uses, and therefore structure a targeted campaign.Setting up strategic partnerships and alliances can also be of great help and this helps to share good practices and mistakes to avoid.To conclude, my advice is therefore to open up, to understand the differences without having to give up your own way of being and feeling, but also being willing to take a step further, and therefore take risks, to get closer to this world. After all, many entrepreneurs are also a bit reckless, there must be a bit of a sense of adventure. China is definitely one of the main places to experience it.

 

 

Since we opened with those data on tourism in Umbria, would you like to tell us about the different types widespread in China that you also analyze in the book? I am referring primarily to virtual tourism, but also to international and national tourism.

Let me start by saying that I started writing the book in the summer of 2022: we were in the midst of post-Covid, especially in China. Tourism, especially international tourism, had suffered a major decline and the Chinese themselves were afraid to travel, particularly abroad. So creating augmented or virtual reality experiences could compensate for the lack of being able to physically move to another place. The evolution of virtual tourism is still difficult to predict, it will probably be difficult for it to completely replace the real one; if anything, it could address or develop for those segments of consumers who do not have the economic possibility of undertaking an international trip, which clearly remains the prerogative of a few.Also because international tourism, starting from the second half of 2023, has experienced a strong recovery, so there is great hope. However, what we need to work on is preparing the local market to welcome the Chinese tourist, because he is a tourist who also needs to feel safe in the territory he visits. Just as we, going to China, can experience a culture shock, the same thing clearly happens in reverse. Maybe even the fact that technology is less dominant in our reality can be shocking to them and at some moments they can feel scared. It is important to work so that we can also guarantee assistance, if we want, in terms of linguistic and culinary help, to welcome not only young or very young consumers, i.e. between 20 and 30 years old, but also more senior ones, who among other things have also greater economic possibilities for travel. Being able to welcome and make Chinese consumers feel at ease is something that can certainly be worked on. National tourism, i.e. within domestic borders, is the prevalent one today. To further this, they also drew inspiration from our beauty. In a city called Changsha, for example, a mini-version of not only Venice but also Assisi was reproduced. The choice, in the eyes of a Westerner, may seem a bit kitsch, but for them it is a tourist experience that denotes a passion and interest in Italian architecture. This is significant especially when compared with the design, on the one hand modern and functional of the metropolis, on the other to the typical traditional one widespread especially in rural areas and smaller cities. It is a way to travel without straying too far from home and, at the same time, to get closer to the idea of ​​what a trip to the West could be.

 

Do you plan to return to China soon?

Surely. I don’t think I’ll live there again, but I hope there will soon be an opportunity to spend periods of work, study and, why not, even holidays in China.

 


«Comportamenti di consumo in Cina-Nuove sfide e opportunità per le aziende italiane che operano nel settore B2C» (IT) can be purchased on Amazon, Mondadori Store e Hoepli. 


Translation made by an automatic tool