Market Intelligence for China
China has seen unprecedented levels of growth since it started on its market-led economic development and offers many untapped opportunities across its 32 provinces, autonomous regions and municipalities, and 600-plus cities. How does one best conduct market intelligence (MI) in this huge market, in order to create practical strategies with real business impact?
Nicolas Pechet, Vice President of GIA China and Josephine Loo, Vice President of GIA Asia Pacific Intelligence Services and Consulting, speak candidly about Market Intelligence in China, the topic of a white paper they co-authored. Together, they have over 20 years of experience in the field of research and advisory.
How would you describe the present MI landscape in China?
Nick: “In China, executives across all levels increasingly appreciate the value of rock solid and incisive industry intelligence and see it as a vital component of the strategic planning process. We work very closely with senior level executives over the course of our engagements, as they feel a strong need to deepen their understanding of local market dynamics based on first-hand engagement with the project team members. That collaboration is extremely beneficial to the value creation process."
Jo: “China is one of the hottest countries for research among multinational clients who are planning regional strategy and expansion. It is obviously an attractive and relatively high growth market. The amount of readily available information in China however, continues to be low, making MI as important as ever for companies requiring info that is accurate and actionable. At the same time, investing in MI in China continues to offer high returns. Strong results can be achieved through structured research, and the strategic facts and insights from dedicated MI are essential to companies hoping to gain competitive edge and operate successfully in the country.”
Do you see this landscape changing?
Nick: “The most significant change has been the growing interest in competitor intelligence and related analysis, particularly in the areas of benchmarking competitors on specific attributes and key success factors, and developing an effective competitive strategy. This ultimately requires in-depth competitive intelligence, and can be very demanding.
Perhaps over 70% of our strategic analysis projects now have a competitive intelligence and analysis component. These types of projects are less demanding from an analytical perspective, but require a lot of tenacity and creative problem-solving to address obstacles that inevitably arise. The process is never linear and is very iterative. These factors equate to an extremely challenging, but rewarding environment for consultants in the industry.
Regarding information transparency, things are improving in China but there is still a long way to go. Published data continues to be typically unreliable and becomes obsolete very quickly."
Jo: “In addition, there is also a lot of interest in business-to-business customer intelligence; not just in terms of which segments to target, but how best to target and market to them. As domestic consumption in China grows, this trend will only become stronger.
Primary research will continue to be the main source of info for actionable intelligence, as secondary information will take a long time to reach levels of availability and reliability seen in the West.”
Any interesting stories to share about conducting MI in China?
Nick: “In one project, we were supporting a Fortune 500 client to identify and benchmark acquisition targets in China. The results of the engagement would substantially affect the outcome of the acquisition process, and the accuracy of insights on the M&A targets was vitally important. Beyond the extensive benchmarking analysis we completed for the client, the single greatest factor contributing to the success of the project was our on-the-ground network in China and our ability to engage executives at companies throughout the value chain to gain a deeper understanding of the acquisition target. That kind of intelligence is incredibly valuable.”
Jo: “Adapting research design and structure to local reality is particularly important in China. There are often a number of local idiosyncrasies and characteristics that need to be taken into account in China.
For example, establishing the number of companies in a given industry is fairly straightforward in most countries but almost impossible in China, due to the size of the country, wide variation in modes of business and lack of comprehensive structure for capturing the real number of registered and un-registered operations serving the market.
Flexibility and openness to having your assumptions challenged are also important. Attention should also be paid to adequate and well organized regional coverage.”
What can participants expect to learn from the white paper?
Nick: “Readers, particularly those who are somewhat new to China, can expect to gain a much stronger understanding of the country’s various regions and the idiosyncrasies that define them. In addition, executives will acquire more insight into the challenges inherent in undertaking MI and strategic planning in China, and some pragmatic techniques that can be used to address those.”
Visit GIA White Papers to download:
> Market Intelligence for China
> The Chinese Wind Energy Market
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Global Intelligence Alliance
Global Intelligence Alliance (GIA) is a strategic market intelligence and advisory group. GIA was formed in 1995 when a team of market intelligence specialists, management consultants, industry analysts and technology experts came together to build a powerful suite of customized solutions ranging from outsourced market monitoring services and software, to strategic analysis and advisory.
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