Capturing growth in China: New consumers
June 28, 2018
Consumption has been the leading driver of economic growth in China, accounting for 58.8 percent of China’s growth in 2017. The shift from an investment-driven to consumption-driven economy has been spearheaded by a new breed of consumer—one that is digitally empowered, richer and more sophisticated than ever.
Approximately 40 percent of consumers now earn extra income by selling products online through platforms such as Taobao and WeChat; providing ride-sharing services via Didi Chuxing (which acquired Uber’s China operations in 2016); or streaming live broadcasts on the internet.
China is rapidly entering a new age of consumption. As digitalization continues, new spending power is emerging. So are new consumer behaviors and expectations, new consumption models, and new opportunities to deliver differentiating products, services and experiences. To thrive in the years ahead, companies must have an understanding of the economic drivers, generational differences, and trends shaping China’s complex and changing consumer market. Only then can they effectively pursue opportunities to drive growth and competitive advantage.
We believe three opportunities in the areas of customer experience, fitness and sustainability hold particular potential. There are many more.
Regardless of the engagement strategies companies choose to pursue, certain universal principles apply. In China, as in other markets, it is brand trust, convenient experiences and differentiated value propositions that will win consumers in the New.
Mobile payment platforms have revolutionized how Chinese consumers carry out purchases, making it to a $16 trillion mobile payment market.
Other leading countries = average of the other eight countries with the highest online shopping volume in 2016, including the United Kingdom, Japan, Germany, South Korea, France, Canada, Australia and India.
Source: eMarketer, Digital in 2017 Global Overview, by We Are Social & Hootsuite, Accenture Research.
Consumer credit and financing products are gaining in popularity, too. As with mobile payment methods, credit and financing options make it easier for consumers to spend without having cash in hand. They encourage more impulse buying and higher levels of spending (see Figure 1). Companies clearly need to meet consumers’ demand for cashless transactions.