Chinese Consumer Report 2010
The Internet is more and more important for Chinese consumer behavior
Preferences and behavior of Chinese consumers are growing more sophisticated. Non-price factors such as brand are increasingly important in determining a purchase, and consumers are drawn toward brands by high quality, international origin, good service, and value for money. In addition, consumers' growing individualism is reflected in their buying choices as they seek to differentiate their personal style from others. These are some of the findings of the new Chinese Consumer Report 2010 called "Brands and Buzz: Understanding How to Reach Today's Chinese Consumers".
Approaching China as a homogenous mass market is a thing of the past, Chinese consumers are growing increasingly sophisticated and individualistic. Consumers are growing more diverse through their differences in values, as the younger generation along with people in the middle income level often seek brands associated with fun and excitement and care more about product design, while older people and higher earners lean more toward efficiency and performance when looking at certain consumer goods. Price, once the determining factor in a purchasing decision, is now just one of several factors alongside brand, quality, and personal style. These are some of the key findings of the new Chinese Consumer Report 2010 called "Brands and Buzz: Understanding How to Reach Today's Chinese Consumers".
Brand is the frontrunner in determining a purchase
In specific industries like automotive, brand is the frontrunner in determining a purchase for both imported and domestic cars. Also quality awareness is increasing among Chinese consumers, especially in the wake of quality deficiency incidents that have been seen as threats to public health and safety. 84 percent for example of car consumers in China identified quality as the main reason for purchasing imports. Value for money is another important component of brand. While price in itself is not the foremost factor, customers still want to get the most out of their purchase. But: 74 percent are willing to pay more for the sake of quality, 82 percent for good service.
Personal style and fashion is more and more important
Chinese consumers are placing more emphasis on personal style both through their attraction to the latest fashions and their growing individualism. More consumers are staying up-to-date on trends, and roughly half consider a product's style to be more important than function. According to the study more than a quarter of consumers across all city tiers purchase new phones simply because they feel their current phone is not in style anymore. The average mobile phone purchasing frequency in China, about one phone every 1.5 years, is on par with mature markets.
China's internet user population is growing
China's internet user population has seen explosive growth over the past decade, reaching 384 million users in 2009 from around 23 million in 2000. The growing volume of online chatter generated by Internet users, also known as Internet Word of Mouth (IWOM), is especially powerful in China. It is worth noting that in China, "Brand awareness" and "Purchasing decision" are the stages most influenced by IWOM, with 56.3 percent of consumers first learning about a brand through IWOM and 58.7 percent deciding to purchase based on IWOM.
Chinese consumers increasingly use online channels
Chinese consumers are not only generating and studying IWOM about products, but increasingly use online channels to make purchases. The amount of online shopping transactions has grown at an average annual rate of over 100 percent in the past several years. While e-commerce in China is still low in absolute terms compared with online shopping in the US, the former is growing five times faster than the latter, and high growth is expected to continue, particularly as online payment mechanisms and security improve. Effectively managing online communication with customers has significant implications for companies' resource planning and marketing organization structure. The quality and professionalism of staff who interact online is a priority for many companies given the potential for both improvement and damage to the brand.
Preferences and behavior of Chinese consumers are growing more sophisticated. Non-price factors such as brand are increasingly important in determining a purchase, and consumers are drawn toward brands by high quality, international origin, good service, and value for money. In addition, consumers' growing individualism is reflected in their buying choices as they seek to differentiate their personal style from others. These are some of the findings of the new Chinese Consumer Report 2010 called "Brands and Buzz: Understanding How to Reach Today's Chinese Consumers".
Approaching China as a homogenous mass market is a thing of the past, Chinese consumers are growing increasingly sophisticated and individualistic. Consumers are growing more diverse through their differences in values, as the younger generation along with people in the middle income level often seek brands associated with fun and excitement and care more about product design, while older people and higher earners lean more toward efficiency and performance when looking at certain consumer goods. Price, once the determining factor in a purchasing decision, is now just one of several factors alongside brand, quality, and personal style. These are some of the key findings of the new Chinese Consumer Report 2010 called "Brands and Buzz: Understanding How to Reach Today's Chinese Consumers".
Brand is the frontrunner in determining a purchase
In specific industries like automotive, brand is the frontrunner in determining a purchase for both imported and domestic cars. Also quality awareness is increasing among Chinese consumers, especially in the wake of quality deficiency incidents that have been seen as threats to public health and safety. 84 percent for example of car consumers in China identified quality as the main reason for purchasing imports. Value for money is another important component of brand. While price in itself is not the foremost factor, customers still want to get the most out of their purchase. But: 74 percent are willing to pay more for the sake of quality, 82 percent for good service.
Personal style and fashion is more and more important
Chinese consumers are placing more emphasis on personal style both through their attraction to the latest fashions and their growing individualism. More consumers are staying up-to-date on trends, and roughly half consider a product's style to be more important than function. According to the study more than a quarter of consumers across all city tiers purchase new phones simply because they feel their current phone is not in style anymore. The average mobile phone purchasing frequency in China, about one phone every 1.5 years, is on par with mature markets.
China's internet user population is growing
China's internet user population has seen explosive growth over the past decade, reaching 384 million users in 2009 from around 23 million in 2000. The growing volume of online chatter generated by Internet users, also known as Internet Word of Mouth (IWOM), is especially powerful in China. It is worth noting that in China, "Brand awareness" and "Purchasing decision" are the stages most influenced by IWOM, with 56.3 percent of consumers first learning about a brand through IWOM and 58.7 percent deciding to purchase based on IWOM.
Chinese consumers increasingly use online channels
Chinese consumers are not only generating and studying IWOM about products, but increasingly use online channels to make purchases. The amount of online shopping transactions has grown at an average annual rate of over 100 percent in the past several years. While e-commerce in China is still low in absolute terms compared with online shopping in the US, the former is growing five times faster than the latter, and high growth is expected to continue, particularly as online payment mechanisms and security improve. Effectively managing online communication with customers has significant implications for companies' resource planning and marketing organization structure. The quality and professionalism of staff who interact online is a priority for many companies given the potential for both improvement and damage to the brand.
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