Chinese consumers are increasingly opting for quality goods at higher prices and adopting on-line shopping and social media to gather product information, according to a report jointly released today by the American Chamber of Commerce in Shanghai (AmCham Shanghai) and Booz & Co.
2013 China Consumer Market Strategies
, the third annual report based on a survey of nearly 90 Chinese and multinational companies (MNCs), measured how companies rank seven major trends by importance and the approaches they take to respond to them. For the second year in a row, companies ranked the evolution of consumers - from price-driven purchasers to value-driven consumers - as the top trend driving their China market strategy.
The rise of e-commerce and social media was named as the second most important trend in the report, but the majority of companies declared that they are not yet adequately prepared to convert growing online interactions to a sales advantage.
“The report highlights that the use of mobile devices, online shopping and social media is a disruptive business trend,” said Robert Theleen, AmCham Shanghai chairman. “Companies must develop targeted strategies and China-specific capabilities that enable them to respond and beat out competition.
“China’s rising middle class have high expectations of consumer products and also a need for product verification. With the rise of e-commerce and social media, online marketing channels and Internet forums offer a platform for consumers to gather the intelligence they need to make informed purchasing decisions,” he added.
The report identified value as a key differentiator, with consumers seeking greater reliability, consistency and integrity in the products they purchase, a major shift from what has largely been a price-driven market.
“As China’s consumer market matures, Chinese consumers in developed cities and regions continue to trade up in their purchasing choices,” said Adam Xu, director for the consumer and retail practice at Booz & Co. “This presents companies with opportunities to build products and brands that could deliver great value. However, to capitalize on this trend, companies will need to strengthen their capabilities in innovation and branding.” - Eric Johnson