Decades of economic growth, rising incomes, more than 1 billion consumers fueling booming consumption: CPG companies can ill afford to ignore the Chinese market. However, while the opportunities appear limitless, so does the extent of change—making it tricky to know when, where and how to jump in.
In fact, China’s consumer market is a collection of several consumer archetypes—socially and economically coherent groups—that have distinct preferences and behaviors. Therefore, a one-size-fits-all approach will not work. By customizing their approach and targeting the unique preferences of each archetype, CPG companies can begin to connect with the hearts and minds of these consumers.
Accenture surveyed 3,500 consumers in 27 cities across China to better understand these consumer archetypes and gain insight into what growth strategies CPG companies should consider to more accurately target the urban consumers they want to reach. Here’s what we’ve learned.
The culture is more about “me”
Chinese consumers are purchasing products and experiences that previously would have been considered luxuries. They are also spending more on goods that are perceived to be of higher quality—with food/restaurants, clothing and electronics at the top of the consumption list. They are also spending more on leisure activities, such as travel, and personal products related to health. Combined, these trends represent a new “me” culture where Chinese consumers are asserting their social status through what they buy.
Buyers may come and go
When it comes to consumer loyalty, China offers good news and bad news. The good news is that Chinese consumers are innately curious. CPG companies can tap this curiosity by using digital technologies to offer entirely new products, services and experiences. More than two-thirds of survey respondents said they were willing to try new products. The bad news is that the same consumers are also willing to turn on products. Brand switching is prevalent in all cities and all age groups, according to our research. CPG companies that have historically relied solely on their brand or reputation to lure new shoppers will be at a disadvantage.
It’s a digital life
Digital channels are pervasive in China and digital consumption continues to grow in popularity. However, Accenture’s survey findings suggest that the digital surge has done little to purge the need for marketing basics in China. Even in the digital space, CPG companies need to know their target consumers and how to reach them—online and offline. The way to do this is by creating smarter, seamless and secure experiences at every point of interaction.
Pragmatism still rules
Chinese consumers are digital shoppers, but they’re also traditional shoppers who frequent supermarkets and department stores. Urban consumers use both online and traditional retail channels—and they expect a seamless omni-channel experience from CPG brands. Hence, you cannot afford to ignore either channel in your marketing and sales efforts.
Those CPG companies that know their target Chinese consumers best will have a distinct advantage when it comes to defining their consumer archetype strategy and succeeding in this evolving market.