Bain & Company: 3D model, key to success in Chinese market

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05:05

Design for China, decide in China and do it at China speed -- the 3D model will be the key to success in the Chinese market, according to a report released by a top management consulting firm Bain & Company.

The report shows that China's consumer goods industry picked up pace in the first half of 2018, among which urban shoppers' total spending grew by 3.3 percent.

Analysts say that the strong performance reflects the successful entry of local insurgent brands, which gained share from local and foreign brands.

"The way they compete is very different from traditional competitors. So we believe there is a lot to learn from those in insurgent brands," said Bruno Lannes, the partner of Bain & Company Shanghai office.

Bruno Lannes, partner at Bain & Company Shanghai office. /CGTN Screenshot

Lannes said that the 3D model is a principle that companies can implement to take a bite of the Chinese market.

He pointed out that China's consumer market is quite different from decades ago. Today, it is more like "China for China", or even "China for global".

"So you develop products for China. You have local companies make most decisions," said Lannes. " (China for global) is what we will see in the next 10 years. That's what we [are] starting to see now."

But some multinationals find it difficult to apply the 3D concept. Lannes said that is because they rely too much on the global scale, which is not enough in Chinese market.

"Multinational is rolling out country after country with benefit of global scale, the same product, process and experiences across the world. It has made them very successful. But in China, competing with the insurgent brands, global skill might be not enough," said Lannes.

"You are slowing down against the local player. What you did in the past is not enough for China now."

00:49

China's consumer spending in the first half of 2018 confirmed the recovery observed in the second half of 2017. The sales performance reflects China's "two-speed" growth trajectory, with personal and home care growing at a rate much faster than food and beverages.

According to the Bain report, the personal care categories rose above all in the first half of 2018. Average prices grew a whopping 11.5 percent on average to contribute to 9.3 percent value growth, nearly three times the Fast-Moving Consumer Goods' (FMCG) average.