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Accenture’s latest study reveals consumer insights and strategies that can help accelerate growth for consumer packaged goods (CPG) companies and retailers in China.
China’s ecosystem is evolving quickly in terms of demographic changes, rapid pace of urbanization, and fluctuating buyer preferences and behaviors.
China’s consumer market today is actually a collection of many different consumer archetypes—groups of consumers with different preferences and behaviors. Companies need to adapt their value proposition and target these unique preferences of each archetype.
To do that, you need to understand the complexity of these consumer archetypes leveraging insights to customize offers and experiences. To win in China’s digital market, companies need to understand and engage consumers in new and dynamic ways.
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Accenture launched our China Consumer Study in 2013 surveying 3,500 consumers in 27 cities across China.
For the purpose of this study, we focused exclusively on the urban consumer as China’s urban areas already comprise 70 percent of China’s consumer market. We also focused specifically on consumers in 27 Tier 1, Tier 2, Tier 3 and Tier 4 cities, with populations ranging from 1 million to more than 20 million. Survey respondents were aged 18 to 55, with household income levels below ¥600,000 (US$97,500) and above the income level attained by the top 70 percent of residents in a given city, or approximately ¥45,000 (US$7,400).
Through detailed analysis of responses to our comprehensive survey of mainstream Chinese consumers, we have produced insights that we believe accurately reflect the complexities of the Chinese market.
The rules are changing in the vast China consumer market. Our research identifies four learnings to help inform CPG companies and retailers.
A “me” culture is prevailing: These consumers are aware of what their purchasing power represents. They increasingly set themselves apart and assert their social status through what they buy.
It is difficult to drive loyalty: More than two-thirds of respondents indicate they are willing to try new products. This is good news for companies leveraging digital technologies to offer new products, services and experiences.
Life is digital: Digital channels are pervasive in China and digital consumption continues to grow in popularity. Creating smarter, seamless and secure experiences at every point of interaction is what defines expectations in the digital world.
Pragmatism still rules: China’s urban consumers remain very pragmatic shoppers, leveraging multiple channels before purchasing and they expect an omni-channel experience.
We applied an advanced analytics-powered segmentation model to generate more granular insights of consumer patterns from the perspective of the consumer packaged goods and retail industries.
A detailed analysis of our survey results reveals eight consumer archetypes in urban China:
At the lower income ranges, two consumer archetypes—aspirational wage earners and price-sensitive families—dominate, together making up about 30 percent of the urban Chinese consumer market.
To win consumers in a changing digital marketplace in China, CPG companies and retailers must leverage digital channels to drive growth.
Invest in technology platforms to increase visibility and responsiveness
Build analytics capabilities to understand high-value consumer archetypes
Develop a consumer engagement blueprint to deliver personalized shopping experiences
Identify opportunities for unconventional growth
CPG companies can differentiate themselves further:
Pursuing consumer-driven innovation by engaging consumers, encouraging collaborative design or crowd-sourcing.
Eliminating the complexity, cost and time inherent in analog processes and channels.
Building new marketing and sales capabilities based on a digital foundation.
Rethinking and adapting to a new digital operating model.
June 11, 2014
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