Chi­nese shop­pers op­ti­mistic about econ­omy, new sur­vey finds

China Daily (Canada) - - ACROSS AMERICAS - By AMY HE in New York amyhe@chi­nadai­

Chi­nese con­sumers are op­ti­mistic about their coun­try’s econ­omy de­spite a rocky stock mar­ket turn­down this past sum­mer, but they will be chang­ing their shop­ping habits and turn even more to­ward e-com­merce, ac­cord­ing to a study.

The sur­vey by con­sult­ing firm McKin­sey found that fre­quent on­line shop­pers in their 20s and 30s who live in firsttier ci­ties are op­ti­mistic about the econ­omy af­ter the mar­ket tur­moil, about 10 per­cent more than con­sumers in other age groups with dif­fer­ent shop­ping habits.

More than 50 per­cent of the re­spon­dents in McKin­sey’s sur­vey of 1,200 con­sumers in Septem­ber said that they ex­pe­ri­enced a loss in their in­vest­ments be­cause of the stock mar­ket de­cline, but many said they re­main op­ti­mistic about the coun­try’s broader eco­nomic growth. About 70 per­cent ex­pect wages to in­crease this year, the sur­vey showed.

The re­port — China’s Eco­nomic Dip Is Mov­ing Shop­pers On­line, re­leased on Tues­day — also showed that shop­pers are look­ing to make more pur­chases on­line. The vast ma­jor­ity of re­spon­dents, 84 per­cent, said they will buy more on­line in the next six months, pri­mar­ily be­cause it’s the “smarter way to spend,” and 62 per­cent said that price was the No 1 rea­son to pur­chase on­line.

“The bar­gain hunter par­adise that is the In­ter­net in China still ap­peals to con­sumers, but not sig­nif­i­cantly more than in the past for th­ese items,” the McKin­sey re­port said.

Con­sumers said they will spend more on food and bev­er­age, as well as leisure travel and en­ter­tain­ment (such as din­ing out), but will cut back on cat­e­gories like elec­tron­ics and gad­gets, and if they in­crease their dis­cre­tionary spend­ing, they will buy more ex­pen­sive brands.

Avery Booker, part­ner at con­sult­ing firm China Lux­ury Ad­vi­sors, echoed sim­i­lar sen­ti­ments, say­ing that young con­sumers’ mo­ti­va­tion for buy­ing on­line is not just price-based, but con­ve­nience-based, which is also re­sult­ing in an in­crease in mobile pay­ments. “Some of the more dig­i­tally savvy brands are giv­ing them the abil­ity to use th­ese pay­ment meth­ods to re­serve or pur­chase items,” he said.

Chang­ing con­sump­tion pat­terns mean that com­pa­nies need to adapt their prod­uct and pric­ing strate­gies to ac­com­mo­date shop­pers who will be mak­ing pur­chases less fre­quently and who will be pay­ing more at­ten­tion to qual­ity, the re­port said. It sug­gested that com­pa­nies re­vise their busi­ness mod­els from sell­ing one-off de­vices to cre­at­ing on­go­ing rev­enue streams for users who hold on to the same de­vice for a longer pe­riod of time, for ex­am­ple.

Com­pa­nies in the en­ter­tain­ment and travel sec­tors need to of­fer the best web and mobile shop­ping ex­pe­ri­ences, McKin­sey said, and they need to “ac­cept the chang­ing rules of the game and col­lab­o­rate to stay rel­e­vant and top-of-mind for con­sumers.”

China Lux­ury Ad­vi­sor’s Booker said that a strong mobile pres­ence is needed, either via so­cial me­dia plat­forms like WeChat, or through a mobile-op­ti­mized web­site.

The bar­gain hunter par­adise that is the In­ter­net in China still ap­peals to con­sumers, but not sig­nif­i­cantly more than in the past.”

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