Gallup heats up market research competition in China

By Tiffany Bown

BEIJING (AFP): With foreign manufacturers queuing up for a slice of the tempting Chinese cake, U.S. market research leader Gallup is maneuvering to ensure it is on hand to provide the juiciest mouthful.

While not the first foreign market research firm to spot the potential of the booming Asian giant, Gallup Research Ltd. is confident its famous name and top-level official backing will help it push aside its two main Hong Kong-based competitors.

"The Chinese people know of Dr. Gallup, they know the Gallup name -- equity in the trademark is quite high here," said Lance Tarrance, president of the China joint venture, which officially began operations on Jan. 1.

He dismissed comments by competitors, the Survey Research Group (SRG) and Frank Small Ltd., that the "Gallup name" was best known for public opinion polls on political and social issues -- unlikely to be welcomed by China's autocratic leadership.

"We're not going to be asking political questions," he said, reiterating a pledge that persuaded leaders such as Vice Premier Zou Jiahua to throw their support behind the Gallup venture, hailing it as vital for China's shift to a market economy.

Since signing its contract last year, business has been brisk. The U.S. Chocolate Association, the Washington state Apple Growers Association and China's agricultural trade office provided the venture with more than US$100,000 worth of work before it even opened its doors officially.

Contracts for surveys worth much more have been signed since January, says Tarrance, playing down the difficulty of providing a high-quality service in a country of 1.2 billion people with no tradition of investigating consumer tastes and a dubious record in gathering statistics.

The venture has found eight "excellent" Chinese researchers so far for its Beijing office and established 23 work stations nationwide headed by "celebrated professors," he said.

Communist China's network for monitoring its population has proved a boon for research operations, with household details supplied by urban "neighborhood committees" providing the basis for random sampling lists, said Gallup China's general manager Ren Qimin.

A spokesmen from SRG -- which did its first surveys here in 1984 and now has some 200 China researchers expected to do business this year worth more than seven million dollars -- said Gallup was underestimating the difficulties of building up effective operations.

"They have a lot of groundwork to do," he said, predicting SRG would maintain its leading position in China.

Gallup's arrival has nonetheless heated up competition for the business of the thousands of foreign ventures eying the Chinese market.

Domestic clients will be slower in coming, with the SRG spokesman saying few had yet understood the importance of market research for boosting sales.

Tarrance said the research industry in China was some 20 to 30 years behind the United States, but believed it could "get to where America is now in about eight years."

Development will however be restricted by several factors, not least the difficulty of targeting rural areas, the emergence of a huge unregistered "floating population" and the scarcity of telephones even in cities.

Surveys will in the foreseeable future focus on some 100 million city dwellers with big enough disposable incomes to make them attractive to foreign manufacturers, leaving three-quarters of the urban population and 800 million farmers unrepresented, said Tarrance.

"People talk of going to China because of its one billion consumers. That's not yet the reality," he said.

But, he added, "it will be in the future." And like all the world's biggest multinationals, Gallup intends to be ready for that day.

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