Chinese consumers are increasingly wary of untried products and ever more likely to make purchase decisions at the last minute. Recommendations from family and friends remain very influential. And television advertising is still a prerequisite for entering the market, but its punch is weakening. Meanwhile, print ads are losing ground, while sponsorships and the Internet are becoming more influential. Amid the growing din of Chinese marketing, connecting with consumers continues to be difficult and frustrating
McKinsey just released an update on their findings of Chinese consumers research. If you are one of those interested in the world’s biggest market, you should have a read. Here is a summary of the key findings:
The importance of the brands
- On average, Chinese consumers are willing to pay a premium of about 2.5% for a branded product they purchase regularly, compared to 20% in developed markets.
- Rising inflation is making Chinese consumers more price sensitive and less loyal to their preferred brands.
- 63% of the shoppers studied still enter a store with a shortlist of favorite brands or a single preferred one and don’t stray from it when making purchases.
- Only 18% of the respondents indicated that they were always willing to try new packaged foods, compared with 29% two years earlier.
- Once Chinese consumers recognize a brand, they are likely to assume that it offers better quality and are willing to pay a premium for it.
- Brands in China are powered mostly by their functional characteristics, such as quality and taste.
- Chinese consumers are sensitive to value for money and generally have a clear idea of which functional features merit a higher price.
- 30% respondents said they trust only Chinese brands, down sharply from 44% in 2007.
- Chinese consumers don’t always have a clear idea about a brand’s nationality.
Reaching Chinese Consumers
- Recommendations from family and friends is the most popular way Chinese consumers get product information
- Television is indispensable and its impact score is second only to that of word-of-mouth recommendations; the impact of ads on television and in the print media was mixed, while indirect approaches (sponsorships, the Internet, and articles in the print media) are gaining strength.
- Sports and cultural sponsorships can also help build interest.
To build a brand and get connected to Chinese consumers in China, being on TV is a must but not enough. With word of mouth campaigns via Internet, you stand a higher chance.
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