Wednesday, September 26, 2012

Book Review: What Chinese Want: Culture, Communism and the Modern Chinese Consumer by Tom Doctoroff

By Professor Jeffery Atik

In this unabashedly pop business book, Tom Doctoroff, head of the J. Walter Thompson advertising firm in China, tells us What Chinese Want. Yet the implicit question is complex: what do the Chinese want for themselves? For their children? For China? And to answer the question coherently involves considerable psychological framework. Doctoroff is an ad guy -- so the question that lies squarely within his expertise might be: what does the Chinese consumer want to consume? And this question he begins to answer. He is less certain -- and less convincing -- when applying the insights he draws from Chinese consumption habits to the more mysterious nature of Chinese culture, politics and foreign policy.

I suppose we can learn something meaningful about the Chinese from studying their patterns of material consumption -- even using the tools of an advertising executive. In some sense, Doctoroff's inquiry is an exercise in applied cultural anthropology -- though his ends are more instrumental than scientific. So which firms are doing well in China -- and what do their successful adaptations suggest?

Starbucks, Doctoroff tells us, has configured larger stores in China which serve as group meeting places. The Chinese consumer would not pay the equivalent for $4.00 for a cup of coffee for private consumption (this may reveal the inherent cross-elasticity of Starbucks coffee and ubiquitous hot tea). The consumer will do so, however, when observed by others; the Starbucks customer's extravagant expenditure for a latte is justified by a gain in social standing. And so by facilitating the prospect of mutual observation -- by providing large, welcoming meeting spaces -- Starbucks sells coffee in China.

The Starbucks example typifies a more general tendency Doctoroff observes: a uniquely Chinese form of conspicuous consumption. Luxury goods are avidly purchased by Chinese consumers -- from Starbucks coffee to Cartier watches -- if their consumption is observable. But when consumption is hidden -- in the home for example -- the Chinese eschew unneeded expense, preferring cheaper products that are weakly branded and of domestic origin. Doctoroff would likely predict tough going in China for an importer of high thread-count sheets.

So the Chinese are, says Doctoroff, and so they will remain. For one of the keys to Doctoroff's presentation of the Chinese is his sense of their sense of timelessness. The Chinese remain the way they are; new experiences, through consumerism, exposure to technology and increased contact with the outside, will not change them.

Doctoroff has lived in a China for many years. Indeed, he tells us of moving into a picturesque and resolutely Chinese neighborhood in Shanghai -- admirably, he does live in post-colonial isolation. And so, no doubt, there is a significant stock of observation behind his construction of Chinese character. But I remain suspicious of Doctoroff's generalizations. Perhaps this is precisely what an advertising professional is tasked to accomplish -- form generalizations that can serve to inform marketing plans. Yet there is little distance between broad cultural generalizations and misleading stereotypes. I wonder whether this book will embarrass Doctoroff's grandchildren 50 years from now.

Doctoroff teaches us that the Chinese have a notion of 'face' that may not be offended. That they are intrinsically pragmatic. That order is the paramount value. That the Chinese are ambitious in a perversely contained way. That their sense of cyclical history leads them to be fatalistic, yet assured of China's return to glory.

Chinese society is built from the foundation of the family, and not from the individual, Doctoroff observes. As such, it is the social that is essential. Larger and larger social units are built outward from the family -- extending from clan to all China -- with attenuating yet meaningful identification and allegiance. The state, however, is distrusted. The Party's legitimacy depends on a fragile bargain -- its continued exercise of power depends on the maintenance of order and rising material conditions.

Doctoroff argues that the Chinese are afflicted with a weak civil society. This leads to a general insecurity. The Chinese are uncertain about preserving what wealth they may acquire, they fear dependency (beyond the family) and they are haunted by possible breakdown of social order. Doctoroff sources Chinese defensiveness to these anxieties.

And he includes, as a characteristic manifestation of Chinese defensiveness, its reactive national alarms to challenges to its sovereign territory. Doctoroff's 'foreign policy' prescriptions are fairly simple. China is not to be feared, as it is not aggressive. But neither is China to be threatened, for it will defend itself.

Doctoroff may be right about all this, but if so, it may be his intuition that correctly guides him and not his deep knowledge of Chinese consumerism.

What Chinese Want is longlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award.

See my reviews of these other longlisted books for the 2012 FT/GS Book Award:

Philip Coggan, Paper Promises - Debt, Money and the New World Order

Michael J. Sandel, What Money Can't Buy - The Moral Limits of Markets

Daron Acemoglu and James Robinson, Why Nations Fail - The Origins of Power, Prosperity, and Poverty

Luigi Zingales, A Capitalism for the People: Recapturing the Lost Genius of American Prosperity

Follow me on Twitter @jefferyatik

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