Mainstream business slow to recognize opportunity

A few years ago, I was invited by the American Marketing Association and the International Institute of Research to speak about Canada's Chinese market to prominent Canadian marketers and manufacturers.Until then, my main source of business was Chinese-owned companies or mainstream...

A few years ago, I was invited by the American Marketing Association and the International Institute of Research to speak about Canada’s Chinese market to prominent Canadian marketers and manufacturers.

Until then, my main source of business was Chinese-owned companies or mainstream businesses, including advertising agencies, with Chinese executives.

This was my big chance to introduce the lucrative Chinese market to more mainstream businesses. I was sure they would spot this golden opportunity. I was wrong.

My presentations were well-received, but nothing followed. In fact, it took another two years of hard knocking before business from mainstream Canadian clients started to pick up.

Believe it or not, when it comes to decision-making, Canadian businesses and marketing professionals spend far too much time dithering. Show them a new idea or market opportunity, and most of them shy from being first.

Benefited tremendously

This brings us to Canada’s constantly growing Chinese market. The ‘doers,’ businesses which were quick to recognize its potential and got off the mark early, have benefited tremendously already. Fortunately, there is still plenty left for the ‘waiters.’

There is an old Chinese saying, ‘Don’t paddle against the current. Paddle with it.’

Your advertising dollar goes a lot further in the Chinese market. Let’s use cars as an example. What is the cost of advertising needed to convince a two-car family to buy a third one?

Now compare that to the cost of advertising for an immigrant family with no car or only one car. It is clear why the return on advertising investment is a great deal higher in a growing market (immigrant Chinese) than in a saturated and highly competitive market (mainstream Canada.)

Interestingly enough, conservative investors prefer to follow rather than lead the crowd.

As a result, a great deal of advertising/promotion budgets, $10 billion annually, are spent fighting over that same ‘pie.’

It is a tough war, costing huge sums of money that most businesses can ill afford.

Soldiers die

This costly way of doing business reminds me of another ancient Chinese saying: ‘One general win war. Tens of thousands soldiers die.’

Fortunately, in Canada’s Chinese market, your soldiers do not have to die for you to win the war.

It is still a rapidly growing market segment in which most consumers need to buy and can afford to buy. And competition, so far, is still not serious in most product/service categories.

Financial institutions are a good example of a sector ripe with unexplored opportunities. During the last five years, immigrants from Hong Kong have each brought an average of $200,000 into Canada.

Because of unfamiliarity with Canadian financial products, most of them simply park their money in low-interest saving accounts, such as Guaranteed Investment Certificates (gics).

However, with proper education, these affluent immigrants can be motivated to consider less conservative investment tools, such as mutual funds.

A number of financial institutions have made attempts to capture this market by printing brochures about their products in Chinese.

Small part

Unfortunately, printed matter can touch only a small part of a potential market, usually involving consumers with some knowledge or interest in the product.

To reach those consumers who are totally ignorant of a marketer’s product, a well-orchestrated educational advertising campaign is needed.

Such a campaign can generate awareness proactively, and motivate more people to find out more about previously unfamiliar products.

In other sectors, some companies have already made very smart inroads into the Chinese market. Since 1988, Acura’s mainstream advertising agency Ambrose Carr Linton Kelly and I have started to transcreate, as opposed to translate, Acura’s mainstream campaigns into Chinese

The same advertising concept could then be delivered simultaneously in English, French and Chinese.

Volvo has a commercial on Chinese tv which looks high quality but was actually produced at minimal cost. This was accomplished with existing footage, but with an original audio script strategically written to appeal to the hearts of Chinese immigrants.

One bmw dealership aggressively goes after affluent Chinese visa students by advertising 48-hour credit approval in a Chinese newspaper.

Simply translate

Now compare these examples with other auto ads which simply translate a mainstream message from a current ad campaign, without considering its relevance to the target ethnic group.

If these advertisements work at all, it is because of brand awareness, or the visual appeal of the car, and not because the strategic selling message was tailored to the target consumer.

During the last recession, while mainstream advertising suffered, the total advertising budget in the Chinese market has mushroomed. Smart marketers know where to put their money.

Canada has undergone dramatic and irrevocable changes in recent times. Through successive waves of immigration (more than 200,000 per year from all over the world), we have become a multicultural society.

Canada’s Chinese market has also undergone some major changes. These are changes which should be of great interest to marketing and advertising professionals.

Before 1984, the Chinese population in Canada was relatively small.

On a cost-per-thousand basis, it was simply not efficient to specifically target this market. Look at the demographics now.

The Chinese population in Canada has doubled in the last 10 years to more than 600,000.

Over one million

By 2001, according to a study commissioned by the Canadian Advertising Foundation, it will exceed one million.

Most Chinese live in Toronto or Vancouver. This concentration of population works in favor of advertisers and marketers.

This is also an immigrant market over-represented in high-income professionals and investors with significant personal wealth.

You need only to stroll through a popular ‘Chinese’ mall in the Toronto suburb of Scarborough to see the thriving businesses, the jam-packed parking lots, to be convinced of the dynamism and buying power of this consumer group.

This is a market that is truly recession-proof. By the way, check out the licence plates while you are there. You will see the Chinese favor the number ’8′. In Chinese, ’8′ means prosperity.

Charlie Chan movies, chop suey houses, laundry shops – for a long time, this was Chinese culture in Canada.

For Chinese immigrants and their Canadian-born children, they had a choice of identifying with this limited and distorted version of their heritage or assimilating into mainstream Western culture.

It was not a choice many immigrants relished. And from a marketing and advertising standpoint, it was difficult to identify a sizable target group based on a similar cultural mind-set and behavior.

Thriving culture

Today in Canada, there is a thriving, easily recognizable Chinese culture. It is one that all overseas Chinese can subscribe to and be proud of, whether they are from China, Taiwan, Hong Kong, or Southeast Asia.

This phenomenon has developed as a result of Hong Kong’s economic power and cultural influences. Over the last 30 years, Hong Kong has developed into a world-class cosmopolitan city.

Music and movies from Hong Kong now routinely top the charts throughout Southeast Asia and China, in addition to huge followings in overseas Chinese in North America and Europe.

Cantonese, the most dominant dialect in Hong Kong, is now the most widely spoken dialect in overseas Chinese communities throughout the world.

The entrepreneurial spirit, which drove Hong Kong from light cottage industries into a major international manufacturing and financial centre within one generation, is alive and well in overseas Chinese.

Although they may have reasons for residing abroad, overseas Chinese now have a dynamic heritage culture they can relate to and be proud of.

In many business circles, ‘Hong Kong style’ now denotes good quality, good service, and an aspirational value that says success. Assimilation into Western culture is no longer the only viable alternative.

Ten years ago, marketers could base their long-term communication strategies on the assumption that ethnic immigrants would eventually assimilate into the mainstream.

This is no longer true for the Chinese-Canadian population, with its alternate dynamic culture.

For advertisers, a mass medium is not just an information provider, it is an effective selling vehicle.

For overseas Chinese, a medium in their own language also represents their culture. Unfortunately, in the past in Canada, the Chinese mass media were limited in quantity and quality; and as a result, had a following only among those with difficulties understanding English.

Today, the Chinese mass media in Canada is a beehive of activity and dynamism. There are now four tv stations, six radio stations, six locally produced daily newspapers, more than 10 magazines, weekly and monthly.

On top of that, add video rentals, imported books, magazines, newspapers, movies, tv programs. All of them accept, in fact, compete, for advertising. All of them have huge followings and subscriptions in the Chinese population.

The Chinese mass media are changing so rapidly that new developments appear every few months.

Tele-Classified Advertising recently launched an entertainment and information hot-line in Toronto. Consumers have access to the latest local, international and Hong Kong news, in Cantonese, 24 hours a day.

Ming Pao, a highly popular and successful daily newspaper in Hong Kong, launched its Canadian edition in Toronto last month. Its slogan? ‘The Canadian Newspaper that Speaks Chinese.’

All these media developments will form new media habits among Chinese-Canadians.

Media planning is now the name of the game. Once, the largest selling newspaper was the preferred norm. Now advertisers need media recommendations.

Unfortunately, most Canadian businesses and mainstream advertising agencies know little about the ethnic markets and ethnic media. This has created enormous opportunities for professional Chinese ad agencies.

Some of these agencies have guided many Canadian businesses through this lucrative market to capture a good slice of it.

In the past, ethnic immigrants had more incentive to assimilate into mainstream culture.

Their numbers were small. Economic development in their origin countries was relatively weak.

But even with a strong preference for assimilation, the process was slow and less than total.

For Chinese immigrants now, there is much less incentive to assimilate. Its population has reached a critical mass.

Its infrastructure is so well-developed that an immigrant can function economically and culturally, without conforming to the mainstream. And for many, staying within one’s cultural sphere is the easier and preferred choice.

Ethnic advertising is booming even in the u.s., which ascribes to the melting pot version of society, versus Canada’s multiculturalism.

The reason is simple. Business aims to maximize opportunities within social reality, not to preach social ideology.

Ethnic marketing is a reality that Canadian businesses cannot afford to ignore.

Patrick Fong is president and creative director of Toronto-based Can-Asian Advertising.