2 hours ago | By Martina Rocca
Jan 25, 2018
By Nigel Taylor
China’s consumers are among the world’s most connected and their browsing device of choice is increasingly a smartphone.
Some 84% of consumers in the country used a mobile phone to shop last year, that was up from 71% two years earlier and helped online sales grow 28%, according to a new Nielsen report called What’s Next for China’s Connected Consumers – A Roadmap for Driving Digital Demand.
Interestingly, the proportion of consumers that shop on overseas websites increased from 34% in 2015 to 64% in 2017- an important statistic for global brands and retailers.
And they’re not only buying the obvious consumer products that are strong sellers online globally. Nielsen said 54% of Tier One consumers now invest in online financial products and a further 38% say they will increase their spending on such ‘products’ over the next 12 months.
This online-focused view of the world makes the Chinese consumer more open to digital advertising than ever before with the research showing that between 2016 and 2017, confidence in mobile advertising increased by 3%. And while a smartphone is the key device, trust in PC ads also increased.
This trust means that many consumers aren’t going out of their way to avoid digital advertising and, in fact, 38% consciously watch the ads they see on their phones and 30% do the same on their PC.
This kind of digital-first attitude is carrying over into consumers’ physical interactions too. Its no coincidence that China’s Suning managed to get its cashier-less store concept open to the general public in China faster than Amazon did in the US. And it’s also no coincidence that China is the world’s leading market for physical store payments using smartphones.
“In recent years, Chinese consumers have shown an insatiable appetite to integrate digital technology into their lives,” said Vishal Bali, managing director of Nielsen China.
“Connected devices, social media, e-commerce, online payments and digital advertising are now firmly woven into the fabric of society. Looking ahead, China’s digital ecosystem will only expand, with emerging innovations like robotics, virtual reality and machine learning creating further disruption to consumers’ habits and behaviours,” he added.
The report shows that the impact of fast tech advances is likely to intensify as the market grows fast. More rural households will come online over the next 10 years. coinciding with machine learning, robotics, virtual and augmented reality, frictionless payments and big data/analytics seeing mass adoption.
It won’t be long before Chinese consumers are demanding faster delivery times via robotics, drones and autonomous vehicles, while new routes for engagement via VR will help marketers make deeper and longer-lasting connections, Nielsen said.
The report also offered up some interesting insight into how Chinese consumers live their lives and how this can affect the way marketers reach them. For a start, the report shows 65% of digital advertising impressions seen by women are on mobile while 62% seen by men are on PC.
At the same time, women aged 25-29, with low-to-mid incomes and without children, prefer historical dramas on TV. But women aged 25-34, with high incomes and without children, prefer reality shows.
And as Chinese households have an average of four internet-enabled devices, marketers need to be aware of them all. Nielsen’s research showed that when a brand owner only invested in PC advertising or smartphone advertising, sales increased by 0.6% and 5.5%, respectively. But when it targeted both devices, sales increased by 7.1%.
It also said that 52% of Chinese consumers prefer advertising that runs for less than 15 seconds. By comparison, just 11% prefer ads that are 30 seconds or longer.
“Against a backdrop of digitalisation in China, consumers are becoming increasingly comfortable with digital advertising. Executed well, it can help uplift brand awareness and sales. But many brand owners are failing to harness the right measurement solutions to evaluate which investments deliver the best ROI and which are wasted. Without this, communication activity will remain ad hoc and brand owners will fail to realise the full potential of China’s digital revolution,” said Bali.
Keen to understand more about the Chinese consumer? Read our Chinese Consumer Outlook 2018.
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