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"In the past, Chinese consumers have displayed little loyalty for brands in the beer segment," says Ari Mervis, managing director for Asia for SABMiller, speaking from Hong Kong. "They bought on price and that meant few takers for premium beers.”

China is not just "one homogeneous country," adds Nigel Fairbrass, head of media relations for SABMiller in London. "There are huge cultural and language differences. There are vast differences between north and south."

Getting the lay of the land

Successful companies gather information - often through good local partners who show them the ropes - then they build strong domestic operations, Accenture's Teo and Matheis agree.

That was key for Nokia, which faced little domestic competition when it entered China 23 years ago. "Then, in 2001, about 40 or so domestic players entered the market," says Giles.

Nokia tapped local partners for advice. "It's difficult to get data, especially in rural China. We went from working with eight national distribution partners to working with over 35 provincial distribution partners," Giles says, speaking from Beijing.

Nokia had 300 marketing people putting up point-of-sale materials in Chinese stores; some domestic competitors had 10,000 workers selling in the stores.

"When customers came in to a retail outlet to buy, they were greeted by the manufacturer's promoter," Giles adds.

Nokia boosted its sales force to 6,000 people and decentralized away from Beijing and into 400 cities, covering 55,000 outlets.

Nokia also developed a tool on its own phones used by its sales force. Supervisors map out each sales representative's territory for the week, with the data downloaded by general packet radio service (GPRS) to that salesperson's phone.

The sales reps enter data at each store visited, which is uploaded back to the central office.

"It gave us daily knowledge of market share, market size, bestselling products and best-selling shops," Giles says. 

Building a brand

He explains that branding in China is straightforward due to the dominance of the China Central Television network, though it is expensive.

Teo says that ads need to focus on explaining products. In countries like the United Kingdom, advertising is almost a form of entertainment, and products are mentioned subtly.

She points out that that does not work in China, where "people tend to focus on product attributes”.

Meanwhile, standard marketing techniques such as direct mail show far lower response rates than in the West, while electronic kiosks and other media not yet common in the West are more effective.

"China has a lot of technology around advertising media that has leapfrogged Western Europe or North America," says Matheis.

SABMiller bought the local Snow brand in 1994, taking it national in 2002 and making it the No. 1 brand in China by mid-2006.

"Snow was the first national beer brand," says Fairbrass. "Until then, it was very much regional brands. We took a regional approach as well, with regional pricing and playing to regional strengths - areas with relatively high market shares where you can influence price."

Reaching the consumer

When SABMiller entered China, it skipped the biggest cities and started in the second tier and rust-belt industrial cities, buying 56 local breweries.

"We bought breweries at good prices. Our footprint now goes up China's east coast and down its rivers, where most of the population is," Fairbrass says.

"Beer is a local business," says SABMiller's Mervis. "The closer the brewery is to the customer, the more successful the brewery."

The game for winning in China isn't playing out in just Beijing and Shanghai, echoes Prof. Williamson of Cambridge University.

"It's not just in major cities, not just the top 30 cities, but in the 600 cities most people haven't heard of. That's where growth is, where people look for new products as they move from rural life to urban life," he adds.

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