Yu Chunyi is just about the luckiest person in the China – according to her.

The 24-year-old teacher has a job “financed by the central budget,” she told Beijing Review.

In other words, she has a secure job.

“It’s less challenging and fulfilling, but surely quite stable, especially when the economy turns bad,” she told the Review.

Her monthly salary just doubled to 2,000 yuan (US$293).

Given the fact that Ms. Yu clearly values financial security – even to the detriment of higher earnings – guess how much she saved in January.

Nothing. Her expenses hit a record high: 3,000 yuan (US$439) for items like stylish clothes and premium cosmetics.

“I do not see anything wrong with luxury since I can afford it,” Ms. Yu told the review.

To an untrained Western observer, Ms. Yu might be very nearly delusional feeling financially secure and affording luxury on a $300/month salary.

This is precisely why the Western businessman in China should be adept at cross-cultural consumer psychology. Poverty is relative, as is luxury. Add Chinese characteristics to these concepts, and you’ve got a very complex consumer mind to diagnose, then treat with your products.

A new article in the Handbook of Consumer Psychology, titled, “Cross-cultural consumer psychology,” suggests the ways in which Chinese approach consumption and other choices are very different than in the West.

Note the following:

• When presented with a choice of candy, those with an interdependent makeup (i.e. Chinese nationals) rather than independent makeup (U.S. nationals) are likely to choose two different candies rather than two pieces of the same candy to reduce the risk of social embarrassment and post-choice regret. The same is true when choosing a shirt to wear at a family gathering – or even when playing truth or dare: interdependent people choose the safe option.
• However, interdependent people are more likely to choose the risky option when making a decision regarding a lottery or parking ticket. It appears the Chinese are more willing to gamble, especially when it comes to tossing parking tickets out the window.
• In another study, Chinese were found to be more willing to invest money in the stock market than in savings accounts than Americans. Chinese consider financial investment options as less risky than Americans, overall, and are willing to pay more for them. However, Chinese are more risk averse in academic and medical domains.

“Taken together, these results suggest that while individuals with a dominant interdependent self-construal are more risk averse than those with a dominant independent self-construal in general, they are less risk averse when their decision involves financial risks,” reported article author Sharon Shavitt, Walter H. Stellner Professor of Marketing, University of Illinois at Urbana Champaign. “Members of collectivist cultures can afford to take greater financial risks because their social network buffers them from financial downfalls.”

In other words, certain aspects of Chinese society – like guanxi – may insulate Chinese during the purchasing process from certain fears. In Ms. Yu’s case, it appears that her social network – which includes the central government for which she works – allows her to feel confident enough to spend money relatively extravagantly despite her meager earnings. She knows she will be taken care of thanks to her secure relationship with her employer.

Dr. Shavitt’s article notes a few other important points:

• Independent-minded consumers are less patient in waiting for delivery.
• Interdependent-minded consumers have less self-control (when say, considering the purchase of something tempting). According to the article, in one study:
  

  Participants were asked to imagine that they were on a tight budget shopping for socks, and were tempted with an expensive sweater. The approach to the self-control strategies of the promotion-primed participants, which tended to focus on achieving their goal (e.g., “socks are more important right now”), were more effective than the avoidance strategies employed by the prevention-primed participants, which tended to focus on the temptation (e.g., “I don’t need this sweater”).

That means Ms. Yu probably isn’t too concerned about overnight delivery for those luxury cosmetics she bought online – the one’s she purchased while she was supposed to be buying her mom a birthday present.

So maybe Chinese buying habits are more similar to our own after all – as long as we understand them in the context of the China situation.

    Channel: Local Wisdom     |