March 22, 2016
China (in particular, Hong Kong) has long been one of the world’s premier financial hubs and one of the most forward-thinking markets with the highest innovation adoption rate of 29%. As a leader in fostering a competitive environment, China has largely opened up its market for FinTech startups to disrupt the country’s e-commerce giants Baidu, Alibaba and Tencent that took advantage of the sector.
While industry professionals are mostly looking at the players to complete for the customer, the attention is rarely given the customers themselves. Yet, it is an important matter for companies both operating in and planning to enter the market. This time, we will discover the hallmarks of China’s e-commerce consumer market.
Chinese shoppers are known to be eager to embrace innovation in e-commerce and favoring the digital experience. A survey performed by a management consulting firm Bain & Company has revealed what motivates China’s consumer market to shop online and what keeps them away.
One of the hallmarks of China’s consumer market is the tendency to choose from multiple brands to satisfy one need. Moreover, China’s digital shoppers are not loyal to a particular e-commerce store. Instead, they shop through different channels and different websites to make sure they score the best deal.
This leads to the next hallmark – tendency to hunt for a bargain. According to the results of the survey, the number one reason Chinese customers go online is to compare prices among an array of e-commerce sites as well as physical stores. Before making a decision, customers usually look through two to three websites on average.
Promotions can come in handy in China’s e-commerce consumer market. Chinese customers seem to be motivated by promotions, regardless of whether or not it is actually the best deal.
China’s shoppers are a great target for mobile-first solutions and mobile-friendly e-commerce players. About 60% of those surveyed rely on smartphones to browse or buy products. When it comes to higher-income consumers, the number reaches around 75%. Digital retail is the industry to benefit the most from the accelerated mobile technology adoption.
China’s e-commerce players are not the only ones to benefit from the shopping hunger of Chinese consumer market as they are massively ordering products abroad. International shopping has seen an outstanding growth in the past years, doubling annually. The trend is related to the desire of Chinese customers to find the best bargain. E-commerce giants like Taobao and Tmall present such an opportunity. However, the preferences differ depending on the product category. When it comes to health matters, Chinese customers tend to their turn preferences to foreign produce. In fact, Chinese consumers buy 10% of all infant formula and 7% of all cosmetics and skincare products through overseas purchasing agents.
Some of the categories of the most interest to Chinese online customers include inexpensive apparel. However, once online, they extend the cart and tend to move towards bigger ticket categories. In fact, apparel, consumer electronics and cosmetics have the deepest digital penetration, but categories like groceries and automobiles, which have supply chain challenges, have been slow to take off and are expected to lag behind other categories.