How Chinese stereotypes could influence your business

“Shanghainese only care about money.” “Beijingers are really pretentious.” “People from Shanxi are really cheap.” These are a few of the numerous stereotypes I have heard Chinese people say about other Chinese people while living in China. I even often hear Chinese people use these stereotypes to explain their own views: “Of course that’s how I see it; I’m from Beijing.”

I used to just get frustrated and think of how detrimental stereotypes can be since, as an American, I have been trained to find them abhorrent in any form.[1] However, I have recently been considering how these stereotypes could affect businesses operating in China, whether foreign or domestic. Even if the stereotypes don’t apply to every individual, when people from a given area believe a stereotype is a cultural trait then it may just turn into a self-fulfilling reality as they play the cultural role expressed in the stereotype. This is something businesses need to be acutely aware of as they formulate their strategies in China.

Turning the volume down to save electricity

One of my wife’s closest friends, who is affectionately known as Little Fatty[2], is originally from the Shanxi province. My wife recently told me a story about when Little Fatty from Shanxi was visiting her cousin back in their hometown. They were all watching TV together after dinner when Little Fatty asked her cousin for some gum. The cousin tore off half a stick, gave half to Little Fatty, and put the other half back in the pack for later. They only ever eat half a stick of gum because a full piece of gum would be a waste of money. Little Fatty then noticed that she could barely hear the TV, so she asked her cousin to turn the volume up. Her cousin’s response was “We can’t turn it up, that would be a waste of electricity.” (I’m not making this up, that really was her response, though I have translated it into English.)

While Shanxi is a very poor province, and this is likely the historical root of the impressive thriftiness for which the people from there are renown, Little Fatty’s family is certainly not living a life of economic hardship. Compared to the average Chinese family, they are quite well-off. However, part of the culture in Shanxi is to be very thrifty. Shanxi people expect other Shanxi people to be like this, so incredibly thrifty acts are quite common.

“That’s not expensive at all” in Beijing

We can contrast this with a phrase frequently used by another of my wife’s friends. This friend lives in Beijing and is married to a middle-manager at a European company’s Beijing branch. Although they aren’t filthy rich, they certainly have plenty of money. Because they are both part of the new middle class in Beijing, and she is a proud Beijinger, the most frequent phrase she utters when talking about the price of a product is “That’s not expensive at all.” This is true whether she’s talking about a $500 pair of high heels, or a $12,000 Rolex.

There are two different aspects of this couple’s situation that leads to this aversion to ever saying anything is expensive. The first is that the wife is a proud Beijinger, and feels like she should emphasize her position whenever possible. This is true when she’s with other Beijingers, but is even more important when she’s talking to someone who is from a different city. Another contributing factor is that, with a middle-management position at a foreign company, they need to act the part of being well-to-do, whether that is actually true or not.[3] While you may be thinking that this type of response is unique to this couple, or even to people in their station in life, I’ve heard similar sentiments expressed frequently enough that I’m comfortable stating that they are quite common, though certainly not universal.

What this means for you

My objective in writing this isn’t to try to propagate, or even encourage the continued use of Chinese regional stereotypes. Doing so would go against everything I had ever been taught while growing up in America. Obviously, there are individual differences, and I’m not trying to make a generalization that applies to any one individual. What I’m talking about is a regional (frequently provincial) culture that will affect how a subset of the Chinese populace will react to something. It’s this common reaction among this subset of the populace that could affect businesses in China, whether foreign or domestic.

For example, if you are planning to sell luxury goods in China, then deciding to expand into Shanxi might require additional consideration since the regional culture likely leads to people being highly price sensitive in that province. In this case you could maintain the single base price you have set for China, but you may find that you need to offer more discounts so that people in this region feel like they are getting a deal. On the other hand, in Shanghai, where people are often very brand and status oriented, you wouldn’t want to discount your products because that would make them seem cheap and would lower the brand’s status among the Shanghainese. Indeed, you may even want to offer special limited edition releases that are only available in Shanghai and carry a hefty price premium to cater to the Shanghainese who crave status symbols.

China is a complex country filled with surprising nuances. As I discussed in an earlier post, thinking of China as a market of 1.3 billion homogenous individuals is very dangerous. However, if you understand the regional differences, and approach China as the mosaic that it really is, you could find yourself with a lot of happy customers.

  1. Of course, when we call “stereotypes” “demographic characteristics” they seem to be very acceptable. But I’ll save that for a different post.  ↩
  2. Ok, I know “Little Fatty” sounds really bad in English. However, in Chinese it’s actually pretty cute. Please don’t blast me for the Little Fatty thing. That’s really what everyone calls her, and it’s even how she introduced herself to me!  ↩
  3. There’s much more I will be covering on the importance of status symbols, and the opportunities that this presents for companies, in future posts.  ↩

What do you think?