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How the digital lives of its consumers will shape China’s mainstream consumer market

An extensive consumer base and a vastly improved technology presents a great market opportunity and a daunting challenge for enterprises.

Overview

People are adopting digital technology at an exponential rate. Internet and mobile devices make it easy to engage in a wide-range of activities including travel, shopping, reading, working remotely, socializing, and entertainment. Life without these digital activities seems inconceivable.

The Accenture China Consumer Insights project surveyed and studied the digital behavior of consumers across a wide range of industries. It is evident that the massive disruption to people’s lifestyle due to digital activities is accompanied by several changes in the consumer market.

Considering the statistics that disseminate transactions ranging from 900 billion yuan for Alipay to two and 200 billion yuan for online tourism, it is clear that the age of fully-fledged Chinese online consumerism has arrived.

With an enormous consumer base and a vastly improved networks, smart devices, applications and services, the new generation of digital consumers is set to become China’s mainstream urban consumer base.

The situation, however, leaves enterprises with the daunting task of surviving and thriving in this flourishing market.

Key Findings

The Accenture China Consumer Insights project survey revealed four major insights, based on analysis of the survey data, regarding digital consumers. These insights will help enterprise develop their digital offerings, strategy to meet consumers’ needs and achieve sustainable growth.

Insight 1. Emerging digital consumers: fully digital and smart. Smart devices are gaining popularity, with as much as 70 percent of urban citizens using smartphones and 60 percent using tablets. These devices have become an essential part of their daily lives.

Insight 2. Demanding digital consumers have created a switching economy. Digital customers now have extensive choices and feel empowered as never before. They place a higher premium on the product’s quality than on its price, and value experience over utility. Brand loyalty has therefore greatly decreased while the tendency to switch between vendors has greatly increased.

Insight 3. Blue ocean market: low-and middle-end products. Mainstream global brands carry a price tag of approximately 2,000 yuan compared to the Chinese domestic brands that are lower-end and available at half the price. Only a couple of brands have been able to position themselves in the mid-range segment, making it the go-to option for consumers considering a change or upgrade.

Insight 4. Multi-screen consumers–a battle for attention. Chinese consumers like to use multiple digital platforms such as computers, mobile phones and tablets. Smart devices change the way consumers watch TV, with more consumers willing to use their TV screens and try out smart features such as internet browsing, information search, online shopping and entertainment.

Recommendations

China’s digital market presents abundant opportunities. However, only those enterprises that can adapt to the new digital trends and can commit to providing products and services that exceed the highest expectations of consumers can fully benefit from these opportunities.

Based on Accenture’s in-depth digital consumer research and rich experience in China over the past two decades, four recommendations for communications, media and technology companies have been identified:

  • Gain insights into urban digital consumers’ behaviors, preferences, habits and characteristics.

  • Meet changing consumer needs and secure customer loyalty by personalizing experiences.

  • Focus on creating products that cost less and have greater functionality.

  • Seek competition across traditional industry borders to increase their value chains.

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