China is a difficult market to currently crack for international businesses, but a shift appears to be happening, driven largely by e-commerce.
In association with Toluna, Econsultancy has carried out a survey of online consumer behaviour in the region to try to understand this further.
Historically, China has been problematic for online retailers and marketers, not just because of the language barrier, but also because of political and social issues. However, the internet seems to be rapidly having a visible impact on this.
Various analyst reports indicate that last year, e-commerce was worth some $83bn (£50.4bn) across the country. Although this only accounts for around a tenth of total retail sales, this is actually an astounding 95% increase from 2009.
It’s currently being suggested that the Chinese market is rapidly beginning to mirror the maturing models of established e-commerce in Western countries such as Canada, the USA, UK, France and Germany, where e-commerce value is high.
Although comScore data from last year shows that China didn’t make the top 15 countries with retail site penatration, there is widespread consensus that this will dramatically change in the future.
A number of reasons have been cited for this. The first is that offline retailers simply can’t keep up with the pace of urbanisation, where residential development is vastly outgrowing the localisation of physical stores. Why make a long trip to a distant shopping district, when you can have items delivered directly to your front door?
Researchers have found widespread dissatisfaction amongst shoppers with their offline experiences in-store and this is ultimately damaging in the long-run. In line with this, Chinese consumers believe websites to be more reliable, a huge contrast to the attitudes found across Europe and North America.
Online shopping in China is seen to be a far more comfortable user experience, not least because many individuals employed in offline stores lack the experience or knowledge to properly supply consumers with information about a product before they make a purchase.
Consequently, large numbers of consumers are taking the hybrid approach of researching products and services through the internet, before purchasing in-store or directly online.
With Toluna, Econsultancy undertook some topline research to collect insight about Chinese online behaviour and this supports much of this extended theory.
Over a thousand consumers were polled, with roughly 60% being male and 40% female. It’s worth noting that, as with most online surveys, respondents are more likely to be digital-savvy.
Consequently, although this isn’t representative of the country’s population as a whole, it’s a good indication of the behaviours amongst those who are digitally literate and active online.
Do you use the internet for the following activities on a daily basis?
72% of Chinese consumers research or shop for products online on a daily basis.
Have you ever used the internet to look for products or items to buy, or to research something you plan to purchase?
Only 3% of consumers surveyed have not ever used the internet to research or purchase products online.
Do you regularly purchase products or services online?
74% of respondents regularly buy products online.
What have you purchased or paid for online?
Clothes (75%), books (73%), household/electrical products (69%) and groceries (62%) are the most popular items purchased online.
Which of the following, if any, has prevented you from buying something online?
Poor internet connection (46%), unsuitable payment options (42%) and a current lack of local online retailers (38%) were cited to be the largest barriers to e-commerce.
Overall, this gives some great insight for marketers looking to reach Chinese consumers, but crucially shows the gathering pace of e-commerce in the region.
For retailers, a major appealing factor of having an online store is the lower overhead costs and although China is no exception, consumers seem to be fuelling the speed and need to have an online presence. Notably, though, there is still a lack of local online retailers.
Currently, it seems that an ongoing war between physical stores and virtual ones is raging, with arguments for each having individual strengths and weaknesses.
I believe it’s not one or the other, as retailers should try to have as many different consumer touchpoints and purchase facilities as their resources will allow, but in the long run, China looks to be developing a very strong e-commerce marketplace.
[Image via rakugo]