Retail

The Brand Divorce

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In 2013, 3.5 million Chinese couples filed for a divorce – an increase of 12.3% over the previous year. With more and more Chinese choosing to part ways with their partners and live on their own, the Chinese marriage is in crisis. In addition, many more, particularly educated women (often referred to as shengnu – “leftover” or “victorious” women, depending on the character for “sheng” and your point of view) are choosing not to cast their lot with anyone at all.

Statistics are hard to come by for the number of Chinese consumers who “divorce” the brands they have been using, often after years of loyal relationship. However it is clear that the trend in Chinese consumers’ personal lives is also reflected in their purchase behavior and brand choices. Today, Chinese purchase behavior is characterized by promiscuity and flirtatiousness, with a decided resistance to settling down in a faithful and long-lasting relationship.

Why do so many Chinese marriages end up in a divorce? Do similar reasons prompt them to cast aside the brands they once loved? Research shows that there are four main reasons that prompt Chinese couples to part ways; and these same reasons have important implications for brands in the Chinese market.

Erosion of Trust

Lack of trust can take many forms – concerns about the spouse’s fidelity, or financial conduct, or the single-mindedness of the devotion. A brand marriage can also be rocked by a lack of trust. Chinese consumers are prompt in divorcing a brand that they feel cannot be trusted – whether in terms of safety, quality or honesty. Of special note here is the aspect of safety, with many consumers feeling let down by brands that offered products that could harm the health of the consumers and their families. Examples of this are frequent and not hard to find- with the latest scandal to hit KFC, McDonald’s and other fast food restaurants who bought expired meat from Shanghai Husi Food Company.

Financial Differences

Who should pay the mortgage or the maintenance; where and how savings should be invested; and who should command the household finances – these are all major causes of marital discord and lead to break-ups. Brand marriages can also be undermined by financial differences. Chinese consumers decide to divorce a brand if they feel it is charging them too much and is not really giving them a good value for their money. Value assurance is a perpetual challenge for brands, and they need to continuously monitor their perceived worth in the consumer’s mind.

Interests and Needs Diverge

Marriages also crumble when the couple’s interests and needs start diverging. In brand marriages, too, consumers’ interests and needs can change, and brands sometimes fail to adapt to these transforming needs. Consumer expectations are evolving and becoming more sophisticated. Brands need to sharpen and contemporize their proposition to keep up with this evolution.

Loss of Emotional Bonds

Finally, marriages flounder when the love starts to disappear and the relationship becomes a functional dependency, devoid of the emotional bond that brought the couple together. Couples keep their relationships vibrant and fresh by tender touches, emotional gestures, and meaningful communication. Brands in China also need to learn to sustain the romance and keep the marriage healthy and long lasting. CRM, or customer romance management, needs to play a major role here by making the customers feel special and desired.

Managing consumer brand relationships becomes so much easier when we try to understand them with the metaphor of human relationships. Is your relationship with your consumers healthy and stable – or is it a marriage-on-the-rocks?

 

For more information please contact Ashok Sethi, Managing Director for GfK Custom Research in China, at ashok.sethi@gfk.com.

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