4 Steps to Conduct Market Research in China

4 Steps to Conduct Market Research in China [Best Practices]

Last Updated on June 11, 2024

With over 1 billion people in the country actively surfing the internet, foreign brands planning to venture into China can make informed decisions, acquire a competitive edge, and gain deeper insights by simply conducting market research properly.

However, it’s worth noting that the China market is a competitive landscape. Its industry sectors have a broad range of Chinese consumers with distinct needs. Because of this, your business decisions should be made with a suitable research tool and advanced analytics to prevent wasting resources and launching ineffective marketing campaigns.

In this post, we’ll detail the step-by-step process of conducting China market research and the tools you can use to maximize brand growth.


How to do Foreign Market Research in China?

Conducting a market research project in Mainland China requires more than simple data collection. Given that the local market runs with multiple industries, your research capabilities should include the following steps to ensure successful entry into the Chinese market. Here are some pointers you must remember:


Step #1: Identify Your Industry Competitors and Target Market

Identify Your Industry Competitors and Target Market for China

Like it or not, competitive analysis is one of the most crucial parts of conducting market research in China. Foreign companies must establish well-defined benchmarks that will serve as navigational guides to provide direction and context to their research efforts.

Identifying your brand position in the Chinese market will help you determine which type of information you need to succeed in the industry regardless of its market size.


●      Establishing Context and Direction

When you conduct market research in China, outlining the key performance indicators (KPIs) will clarify your goals and objectives. It will also measure your progress and success in the Chinese market.

By identifying these KPIs, marketing professionals can track the brand’s performance and make informed decisions to achieve desired outcomes for entering China.


●      Identifying Areas for Improvement

Whether your brand aims to provide services or sell consumer goods, comparing your performance against established industry standards and competitors is a good practice. Through this market research technique, foreign companies can pinpoint areas that require improvement and determine the actionable insights that will benefit the brand.

Conducting market research in this area will enable you to identify potential weaknesses in your products, services, or strategies. On top of that, having competitive intelligence will allow you to take corrective actions to enhance your market presence ahead of others.


●      Understanding Customer Satisfaction

To gain valuable insights into customer satisfaction, consider using your top competitors’ products and services as a reference point. Examine how satisfied customers are with their experiences and compare them with your offerings.

It’s essential to understand the satisfaction levels of Chinese customers and consider alternative options to gain a unique perspective on your niche market segment.


●      Uncovering Industry Standards

For brands to navigate the Chinese market effectively, it is vital to be well-versed in the industry standards prevalent in the country. Remember that Asian markets have distinct norms and cultures that companies must consider if they want to appeal to their target audience.

Understanding the norms and expectations specific to your industry will help you position your business appropriately and tailor your products or services to meet local demands effectively.


●      Learning from Industry Leaders

While it’s true that some Chinese customers developed a distrust of a few local brands in the country, many online surveys still suggest that the consumers’ preference for local brands is coming back due to their improving quality. Because of this, it’s always wise for foreign companies to identify an industry leader within China and study their strategies and actions.

Through the China market research, you can analyze why their approach works and assess how you can apply similar principles to your business.


Learning from successful companies can provide valuable insights and inspiration for your growth and development. Ask yourself whether their strategies align with your goals and if implementing similar practices could lead to positive outcomes for your business.


Step #2: Determine if Your Business Needs Market Research Services

Determine Market Research Services for China

Conducting market research in China isn’t a simple job that one or two marketing professionals can execute whenever or however they like. So before you decide to hire a strong research team to help your business, here are a few questions you must ponder upon:

  • Do you want to learn more about the local companies in your industry?
  • Are you launching new products and services within the China market?
  • Are you expanding to a new market (e.g., rural areas) in China?
  • Do you want to increase your sales in the Chinese market?
  • Are you a foreign company thinking of launching your brand in China?


If your answer to one of these questions is yes, seeking market research services can be a worthwhile investment. With a consulting firm performing data collection on your behalf, your business can fully take advantage of the following perks:


Market Viability and Growth Potential

Most consultancy services have extensive experience determining the viability and growth potential of a new industry or product idea in the Chinese market. They can conduct market studies about the performance of similar products or services in the marketplace so that your company can gain valuable insights into consumer behaviors and make data-driven recommendations.

Understanding the market’s receptiveness to your offerings can open up brand growth and expand business opportunities coming your way.


Gaining a Competitive Edge Through Market Intelligence Solutions

As previously stated, competitive intelligence obtained through market research provides accurate insights into your business landscape. These research services include assessing the performance of your competitors and understanding their strengths and weaknesses.

Whether entering a new market or evaluating your company’s performance, competitive analysis arms you with valuable data to gain an edge over other competitors.


Formulating an Effective Pricing Strategy

Since the local business landscape is highly competitive, consumer behavior within the China market also changes rapidly. Because of this, your market research strategy should include competitive pricing studies to strike a balance between attracting customers and maintaining profitability.


Harnessing the Power of Market Segmentation

Identifying key customer focus groups allows you to pour your resources into profitable segments, maximizing return on investment.

Your China market research strategies should assist in unraveling the unique characteristics of different customer types, empowering you to deliver targeted marketing campaigns that resonate with specific audiences.


Optimizing Campaign Effectiveness

Conducting market research on campaign effectiveness is vital to ensure that your marketing efforts reach the right audience and deliver the desired results. By effectively identifying and targeting specific audience segments, you can sell more and reduce customer acquisition costs.

Running campaign analysis and research is strongly recommended if your brand invests significantly in communication and marketing.


Step #3: Utilize Different Types of Market Research Tools & Methodologies

Utilize Market Research Tools & Methodologies China

When investing in a China market research firm, you can tap into a trusted network and execute different data collection approaches to gather a comprehensive understanding of the dynamic landscape. These methodologies can be broadly categorized as follows:


●      Primary Research – In-Depth Insights

Primary research involves gathering first-hand, bespoke data to gain unique insights into the local market. Western brands seeking a deeper understanding of the landscape may commission research services for quantitative data collection.

You may not know, but quantitative research can help your brand acquire relevant data sets that strengthen your digital marketing plans. Critical components of primary research include:


  1. Qualitative Fieldwork or Interviews with Industry Experts

Engaging in qualitative interviews with experts within the Chinese industry provides valuable perspectives and knowledge. These insights help brands comprehend the intricacies of the local market, consumer behaviors, and emerging trends.


  1. Competitor Interviews for Strategic Positioning

Conducting competitor interviews can help you identify market gaps and refine the brand’s positioning and overall strategy. It highlights the strengths and weaknesses of rivals, which helps in crafting effective marketing tactics.


●      Secondary Research – Tapping into Existing Data

The secondary market research approach is less about the fieldwork services but more about analyzing readily available or published data that provides an overview of the industry, competitors, and products.

Western brands may utilize this method to gather initial insights into the Chinese market before diving deeper into primary research. The sources of secondary market research include:


  1. Government Reports and Organizations

If you’re not yet ready to collaborate with a China market research consulting firm, you can access relevant reports and data from government sources. Some agencies, like the National Bureau of Statistics of China, the Organisation for Economic Co-operation and Development (OECD), and the Chinese Ministry of Commerce, provide this information through their websites.


  1. Industry Reports and Publications

Examining industry reports and publications provides insights into trends, consumer behavior, and competitor activities. These sources help build a foundational understanding of the Chinese market landscape.

Common Research Methods Businesses Can Utilize in China

  1. Focus Groups

Some research services in China involve in-depth discussions with selected participants who meet specific criteria. Focus groups provide deeper insights into consumer opinions and preferences.

The only problem with this quantitative research method is it can be expensive and may introduce biases in the findings.


  1. Social and Opinion Research

Another way to go about your China market research strategy is to employ statistical and analytical methods. You can hire research services to collect data and information about your target market to understand social trends, public opinion, and consumer behavior patterns.


  1. Consumer Research

The geographic segmentation in Mainland China also extends its influence on consumer behavior within the country’s digital channels. For example, the market needs of consumers in Beijing and Shanghai, China, differs from the ones in the countryside.

Consumer research aims to identify and understand those differences through interviews and online surveys to create detailed buyer personas and delve into consumers’ psychology.


  1. Customer Satisfaction Research

Understanding customer satisfaction is crucial for competitive intelligence. This research measures how customers perceive their purchased products or services, assessing whether they meet, exceed, or fall short of expectations.

By analyzing customer satisfaction, businesses can identify areas for improvement and enhance customer experiences.


Step #4: Stay Up-To-Date with the Market Trends

Stay Up-To-Date with the Market Trends in China

Navigating the ever-changing Chinese market demands a forward-thinking approach. With rapidly evolving trends, regulations, and industries, businesses must be prepared for the dynamic landscape.

Instead of treating market research in China as a one-time event, it should be an ongoing process characterized by constantly monitoring consumers, industries, technological advancements, and more.

Businesses can leverage various tools and technologies to effectively monitor the dynamic Chinese market. These tools provide real-time insights and data-driven analysis, enabling companies to stay ahead of the trends and consumer behaviors. Here are some essential monitoring tools to consider:


●      Social Media Listening and Analytics

Social media platforms are immensely popular in China, making social media listening and analytics tools essential for monitoring consumer sentiments, trends, and feedback. These tools allow businesses to track brand mentions, engage with customers, and gain valuable insights into market preferences.


●      E-commerce Data Analytics

China has a thriving social e-commerce ecosystem, and monitoring e-commerce platforms provides crucial data on product performance, customer behavior, and market trends. E-commerce data analytics tools offer in-depth information on sales, customer reviews, and competitor activities.


●      Web Analytics

Web analytics tools track website traffic, user behavior, and conversions. By understanding how Chinese consumers interact with their websites, brands can optimize their online presence and user experience.


●      Mobile App Analytics

Given China’s high mobile adoption rate, mobile app analytics tools are invaluable for monitoring app usage, user engagement, and user feedback. These tools provide essential insights for app optimization and marketing strategies.


Why is China a difficult market to enter?

China’s vast population of over 1.3 billion comprises diverse demographics with varying attitudes, needs, and preferences. Western brands must adopt a highly targeted approach by focusing on specific demographic groups and localized territories to cater to this market.


Here are some challenges new brands may face in the industry without the help of professional research services:

  • Chinese customers have distinct shopping habits and preferences compared to Western markets.
  • Specific industries in China may already be saturated, making it challenging for new brands to gain a foothold.
  • Local consumer trends can evolve rapidly, requiring continuous monitoring and adaptation by businesses.
  • China’s vast geography and regional differences require tailored strategies for different markets.
  • Navigating legal and compliance requirements can be daunting and time-consuming for new entrants.
  • China’s regulatory environment can be complex, especially for foreign businesses.
  • Competing in this digital landscape requires adeptness in e-commerce platforms and online marketing.


How to Choose Market Research Companies in China?

It’s no secret that there are many market research companies worldwide. However, when entering the Chinese business scene, finding a market research firm familiar with your industry and target customers is crucial.


Here are vital considerations you must check out to ensure that you’re collaborating with a reliable market research firm:


●      Extensive Experience & Industry Knowledge

Select market research services with extensive expertise and experience in the Chinese market. Look for firms with a proven track record of successfully conducting research projects in China and a deep understanding of its unique cultural, economic, and regulatory aspects.

Choose a firm that specializes in your industry or has a dedicated team with expertise in your field. Industry-specific knowledge allows the research company to comprehend the nuances and challenges unique to your business sector, providing more tailored and actionable insights.


●      Target Market Specialization

The market research company should demonstrate a clear understanding of your target audience in China. It includes familiarity with local consumer behaviors, preferences, and cultural nuances. A research partner that accurately identifies and engages your target consumers will yield more relevant and reliable data.


●      Multilingual Capabilities

Conducting market research in China requires effective communication in the local language, especially for interviews, surveys, and focus groups, as well as interpreting and translating data accurately.

Keep in mind that this process is more than desk research, so you need a market research company with multilingual capabilities, particularly proficiency in Mandarin Chinese and English.


●      Local Presence and Network

A China market research company with a local presence and a vast network of contacts locally can access hard-to-reach populations and offer deeper insights into regional variances. An established local network facilitates efficient data collection and enhances the quality of research outcomes.


●      Effective Data Collection Methods

Evaluate the firm’s data collection methods to ensure they align with your research objectives. Whether through online surveys, face-to-face interviews, social media listening, or mobile app analytics, the chosen methods should suit the unique demands of your research project.


●      Customization and Flexibility

Seek a market research company that offers tailored research solutions and is adaptable to your needs. Avoid one-size-fits-all approaches, as the Chinese market’s diversity requires custom research methodologies to yield valuable results.


●      Data Security and Privacy Compliance

Given the sensitive nature of market research in China, you must prioritize a firm that follows strict data security protocols and complies with privacy regulations.  Ensuring data protection instills confidence in both your business and your target audience.


●      Past Client References

Request references from past clients who have worked with the research company in China. Insights from previous clients can provide valuable information on the firm’s performance, reliability, and ability to deliver actionable results.


●      Budget and Timelines

Obtain detailed project proposals and assess whether the market research company’s budget and timelines align with your expectations and business requirements.

The market research industry isn’t as affordable as other marketing ventures, so transparency in costing and adherence to deadlines is crucial for a successful collaboration.


Your Trusted Market Research Partner in China!

Avoid squandering your resources on ineffective digital marketing endeavors. Instead, prioritize investing in extensive market research strategies to gain a profound understanding of your target audience.

Don’t let the complexities of the Chinese business landscape hold you back! Our team is here to guide you through every twist and turn, transforming your brand’s potential into a resounding success.


Sekkei Digital Group Services


Whether it’s for conducting a market study, crafting compelling paid advertising campaigns, harnessing the power of SEO and social media, or making waves with PR, we have the digital solutions you need. Contact us today to unlock your brand’s potential in China’s thriving business landscape!


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