From Overseas Press

The Internet can make or break a brand in China

(Agencies)
Updated: 2010-07-21 09:36

With 420 million people now online, the Internet can make or break a brand in China, a new report released Monday said, as far more people use the web to help decide what to buy than in the west.

Online buzz has the power to build up-or significantly damage-a brand very quickly, according to the report by Roland Berger Strategy Consultants.

Chinese people are sharing their opinions and experiences about brands by the millions on online bulletin board services and local social media channels such as Kaixin.

Around 13 million consumer comments, for example, are published every month on automobile bulletin boards alone.

"Proportionally, Chinese consumers rely on the Internet in making purchase decisions much more than their counterparts in the West," said Charles Edouard Bouée, Roland Berger's Asia President,

Online chatter is crucial, the Chinese Consumer Report 2010 study found, as there are more people online and more places to talk. Plus, those who are talking are more engaged than in any other market.

Almost 60 percent of Internet users in China said that consumer review sites, as well as discussion forums and blogs, influence their purchasing decisions, compared with less than 20 percent in the US.

But it's not just talk, according to the report. Consumers are organising themselves for group purchasing discounts and even online and offline "protests".

Every link in the chain is discussed on the Internet, from deciding what product to buy to the crucial after sales service-which can turn on, or turn off, potential new customers.

"The Internet aspect in China represents both an opportunity and a challenge," Alain Lecouedic, a partner in the consultancy firm said.

"Companies need to raise the bar of their products and anticipate their strategy. If things go wrong, it can quickly damage a brand."

Chinese consumers are also "displaying more individualism than before, striving not only to be fashionable but to be able to express their individual style and personality through the products they use," the report found.

And it is not just in the big cities. Consumer sophistication is rising just as much-or perhaps even faster-in the less developed smaller cities than in the booming economic centres, the report found.