The Rolls Royce Special Edition Year of the Dragon Phantom comes in a distinct maroon color. There are ornate golden dragon details. You can, if you can foot the bill, have your Phantom fully customized, with special embroidery on the upholstery, drinks cabinet, and on an optional picnic basket.
The price for the Year of the Dragon Phantom? $1.2 million.
Don’t bother saving your pennies, though. You can’t get one of these beautiful cars to park in your driveway. They’ve all been sold—Rolls Royce’s entire production run—in less than 2 months.
Connecting with the Chinese Market: The Rolls Royce Approach
The success of the ultra-luxe Rolls Royce is only one of the many signs that the Chinese market should no longer be considered emerging. It has emerged, flush with the power that relative economic stability conveys in this turbulent world. Luxury brands are actively pursuing this market. We see Estee Lauder, Harrods, British Airways, and Hilton going to tremendous lengths to court the Chinese consumer.
What are the determinants of success here? Is there a way to tell which brands will be welcomed with open arms by the Chinese? We’re going to see these questions dominating our national discourse now, and for years to come. To find the answers, we must begin by deconstructing the myth that there is a monolithic Chinese market.
The Chinese market is vast. There’s no doubting that. We’re talking about 1.3 billion people, who have recently transitioned from a largely rural existence to a more urban way of life. This has been a significant period of cultural change within China, with a tremendous impact on how individual Chinese people view themselves, each other, and the world beyond their borders.
With this change comes a great curiosity. The Chinese, it seems, are fantastic travelers. In the first six months of 2011, Chinese people made over 30 million overseas trips—approximately twice the number Americans are likely to make. While on these trips, the Chinese tourist is spending. Research tells us that a Chinese tourist will spend up to 8% of their annual disposable income while on a vacation. It’s important to note what types of products, and more importantly, what types of experiences, the Chinese are buying.
This data will reveal that there is no one-size-fits-all approach to the Chinese market. Instead, the companies that will be most successful in China are those that do what dominant organizations have always done: identify the pivotal emotional and psychological factors that choose the brand’s best customers (Brand Lovers) to favor one brand over all others, and deliver products, services, and especially experiences that satisfy the consumer’s emotional and psychological needs. Doing this allows an organization to connect quickly and meaningfully with their customer base, enhancing overall profitability and increasing market share.
This is a challenging endeavor when we attempt it with consumers who have a common cultural background with ourselves. When you consider a consumer base that has been raised with markedly different experiences, iconography, cultural narratives, values, and mores, it becomes more complex.
Context matters. Rolls Royce did an admirable job connecting with the Chinese marketplace, but that doesn’t mean that Toyota can start painting golden dragons on all of their Highlanders and see sales go through the roof. We need more than a surface level understanding if we’re going to reach and compete in China effectively. This will be one of the greatest challenges—and the greatest opportunities—that we ever face.
Are you ready?