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January 29, 2003

Selling American-made to label-conscious China

American manufacturers wanting to cash in on China's clothing market might be better off preaching to the choir than trying to convert the masses, according to a study by CSUS family and consumer sciences professor Dong Shen.

Her sizable survey of Chinese consumers found the "Made in the U.S.A." label is a better sell to those who already appreciate American culture. More traditional Chinese shoppers prefer garments manufactured in the People's Republic of China.

The results were published in the September issue of Family and Consumer Sciences Research Journal.

The study, which was done prior to China's inclusion in the World Trade Organization, or WTO, found most Chinese consumers are very interested in U.S.-made clothing and in fact prefer it. Shen notes that this is consistent with research done in other developing countries that shows consumers prefer products made by companies from developed countries. "It's a good time for American companies to go into China," she says.

The 3,000 residents of Beijing, Shanghai and Guangzhou who responded to the survey represented a variety of occupations, from business people to factory workers.

Their support for American-made clothing was closely associated with their level of exposure to and acceptance of American culture, which has implications for business. "If you want to promote American clothing in China, you need to create a lifestyle to convince them to buy rather than focus on a particular line of clothing," Shen says. "If they are open to the lifestyle, it will be easier to sell to them."

With today's global communication, even without visiting, people have access to other cultures. The Chinese have ready access to American movies and fast food. To determine if that exposure translated into interest in American brands Shen used two sets of scales to measure cultural acceptance.

One measured belief in traditional Chinese values such as having at least one son. The other, a cultural behavioral measure, related to events or behaviors such as celebrating only Chinese traditional festivals or celebrating American festivals like Christmas. "If a person has a high rank, they strongly believe in Chinese culture and you would expect them to favor Chinese clothing," she says. "That hypothesis was supported."

One topic that surfaced that may make American companies hesitant about the Chinese market is that respondents said that even if they like American clothing and had access to it, they wouldn't buy it because it's too expensive. But, as Shen points out, that shouldn't be enough of a barrier. "The answer is 1.4 billion people. If you just target five percent, it's still a huge market."

Another way to solve the problem is for U.S. companies to hire contractors and facilities in China but carry the American brand, she says. Some companies are already in the Asian region, such as Levi, Calvin Klein and Nike. "Chinese people will buy the American brand, even if it's made in China," she says.

Now that China has joined the World Trade Organization, Shen expects dramatic changes, which represent a wonderful opportunity for America. An upcoming research project will have her working with business professors Craig Kelley and Joseph Richard to study the Chinese market after China's entry into the WTO.

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