Still trying to figure out Chinese customers?
At this point, everyone knows that Chinese customers have a high use of technology on daily basis. No breaking news. But just how much they rely on tech for their day-to-day consumption? Let’s unveil some facts.
The question comes inevitable from most of brands that get excited over positive numbers in China: how loyal are Chinese millennials towards brands? Brand loyalty is something that differs a lot depending on the generation, and in this case, where you can have any brand at the point of your fingertip, loyalty doesn’t come easily. Yes, the young Chinese population is far more connected than their Western counterparts to social media platforms, but do they validate brands from this platforms? Surprisingly, when millennials look for the latest fashion trends, social media is the most cited channel in all countries except China. For Chinese millennials, fashion magazines and a brand websites are the most important. It shows that even though Chinese millennials live and breathe social media, when it comes to the authority of fashion, brands and publications still hold the status.
They don’t use multiple apps for socialising, searching pictures or videos and looking for bargains online. They often stick to one single app. As WeChat and Sina Weibo are the most popular, let’s explain how they work. With WeChat, you can do one-to-one texting or send messages to groups. You can send text, photos or saved images from your phone, just like in WhatsApp. You can also video call your friends in real-time, just as in FaceTime. And the « Moments » function can be compared to Facebook’s actuality feed, where you can share images, text, sound, videos, but you can also post links to other websites. So, why bothering changing apps all the time when you can have it all in one? And, plus, shop directly on it? According to the 2016 WeChat Data Report, 200 million users of the platform have linked payment cards with their WeChat accounts and 34 percent of users spend about $72 per month.
However, the fact that they spend a considerably amount of time in the Internet means that they follow each and every recommendation they see from the Key Opinion Leaders they follow (KOLs)? KOLs are mainly active in social platforms such as WeChat and SinaWeibo, and can drives considerable sales if they engage into a partnership with a brand. Keep in mind the collaboration between Mr. Bags and Givenchy, where the Chinese fashion blogger drove $500,000 in sales to the French luxury brand through his WeChat account in less than 6 minutes. Wealthy Chinese consumers are heavy buyers, spending on average RMB 71,000 annually on luxury goods (€ 8,957), and this number has been increasing by more than 5% a year since 2010, while one in two of their purchases are decided within a single day. As they have become more impulsive, the role of word of mouth has gained in importance. 30% of luxury purchases are directly influenced by word of mouth, up from only 14% in 2010. Word of mouth from friends and family is now the number-one factor influencing purchase decisions, ranking above the in-store experience. Round up: even though Chinese young customers are constantly scrolling their phone screens and receiving tons of amounts of branded content, they don’t necessarily rely on tech’s advice to make their purchase. And the wealthier the consumer is, the more this rule applies.
Last, but clearly not least: cash is virtually non-existant in China today. Chinese millennials just do not use it. Even for small daily things such as the newspaper or the morning coffee. Mobile payments with the WeChat pay app might be mandatory in order to get you some fresh fruit from the street market. The mobile payment revolution in China has happened in breathtaking speed and scale. It has transformed daily life in Chinese cities and created the foundations for the country’s financial tech industry, which last year generated revenues of 654.1 billion Yuan ($ 98 billion), according to iResearch. Just to balance with a Western reference: the value of mobile payments in China overtook the worldwide totals of both Visa and Mastercard.
Still need some more precise information on Chinese Millenial customers? Or maybe looking for further insights on a specific consumer profile in China? Don’t hesitate to drop a mail through hello@retailfactory.fr or visit our website at http://retailfactory.fr
