Ferrari: Chinese Consumer Psychology & Preferences

How is the expectation of the product and service different in China, versus the West?

One difference is that, it being the first purchase, there is no background. Having no background means you have to regain your reputation, in a way. You are a brand, they know you, you are famous worldwide, but this is their first purchase. At the first purchase, you must be able to give it all. This is a little different because in other countries, especially Western developed countries and places such as Japan, which is a very well-developed country, they know what they are buying. To a certain extent it’s easier to satisfy them because they know that they are buying a set of values, behind the brands. The moment they buy the brands, they are much buying much more than the product; they are buying a status, as well. In China, they are buying a status, but the consistency and the quality of the product must be up to standard. Sorry if I am underlining this but, for us, this is a big challenge. We do this regularly because we are selling excellent products, excellent cars. But at the end of the day, sometimes, there is a scratch on the bumpers that happened during the transportation and nobody actually noticed or a small problem in sewing. Maybe a very few, small defects that, if you had them in Milan, they would go back and say, come on, I have these problems and they will say, sorry, I will repair it now. In China, this will damage your reputation in a much larger way. The net effect of a small defect is amplified in China, because it’s the first purchase and they are looking for perfection.

Sometimes perfection is not possible. You must be perfect when you approach a new market. You must be really perfect and this is a challenge, for every brand.

You mentioned how Japan is a well-developed country and, obviously, Europe and the US. Is that because of the culture and the heritage and the values of Ferrari are well-known, but also because the consumer knows and watches F1 where China is a younger demographic there? What is the reason?

The reason is, simply, the exposure of your product to the market. China opened up in 1979 and we entered China in the late 80s, early 90s. We have less than 30 years of experience in China. While in Japan, we entered with the first model, 60 years ago. It’s mainly a matter of time and a matter of exposure of the Chinese consumer to all the Western values and iconic brands. Of course, it’s not because of ethnicity. The Chinese living in Europe or living in the US will have the same approach to the brand as an Italian or an American. It’s the matter of the people living in this country that, for a few decades, have been isolated from the rest of the world. The experience of the brand and the experience of the background behind the brand is limited.

Do you see any major differences in the vehicles they prefer? The type of vehicle or the willingness to customize or personalize the vehicles more than the West?

Again, I’ll go back to the difference between well-developed and developing countries. When you are in a developing country – and this is true for other markets, not only China, but South East Asia, India and other areas, such as Russia – when you buy a Ferrari, you want the typical, iconic Ferrari. So it must be a sports car, mostly red and, I would say, highly recognizable as a Ferrari. This is particularly true in these countries and, in other countries, there is a lot of sophistication. We have quite a broad range, with five or six different models; even more, sometimes. It depends on the special series. But, at the end of the day, we have a sports car, an extreme sports car.

The main difference is that, although we do have a very sophisticated client in China, broadly speaking, as a perception of the overall market, the Ferrari is red and it is a very typical sports car. To a certain extent, they are less sophisticated in choosing the model and they have less requests for segmentation. From a producer and selling point of view, it’s more difficult to explain the segmentation of the different cars. They tend to perceive the Ferrari as a typical Ferrari. When I propose a GT that is, maybe, more drivable, less flashy, with a different color, mostly they tend to say, yes, okay, but this is not really a Ferrari. It is. The only difference is that it’s not the typical Ferrari that you see on movies. So it’s a slightly different approach, in terms of segmentation.