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Chinese consumers increasingly choose value over price
By Wang Yanlin |
June 13, 2012, Wednesday
|
Online Edition
Online Edition
CHINESE consumers increasingly choose value over price as the top criterion when they purchase products, making the Chinese marketplace more complicated but at the same time, healthier and more vibrant, a survey showed today.
More consumers in China seek value and are prepared to pay more for products and services that they believe offer greater quality, safety and utility, said the latest China Consumer Market Strategies report released by the American Chamber of Commerce in Shanghai and Booz & Co.
The ascendance of value is a sharp departure from the past when many purchasing decisions were driven primarily by price. The survey called people leading this trend "value consumers."
The survey, which is based on interviews of more than 150 Chinese and multinational companies, found 83 percent of respondents took value as a major differentiator that can drive brand loyalty, and 87 percent expect an increase in consumers' willingness to pay more for quality products and services.
"Value consumers are a critical component in the growth of a vibrant consumer base," said Joni Bessler, director at Booz & Co. "It is because their buying behavior, or their focus on quality instead of cost, encourages companies to develop new and better products."
Bessler said the trend is a good for companies as they can get a return on their investments if they come up with offerings that are useful, attractive and compelling. It encourages companies to spend more on innovation.
Also, the gap between multinational companies and their Chinese counterparts is narrowing.
"Both Chinese and multinational companies view the opportunities, challenges and trends in the China consumer marketplace similarly, which leads to heightened competition for the same market segments," Bessler said.
The report forecast the Chinese consumer market will become the world's second largest by 2015, behind the United States, and will have enough purchasing power to buy 14 percent of the world's products.
E-commerce will also become more popular in the Chinese market, the survey said, with a sizable increase among multinational companies saying they will pay more attention to online sales in China.
To succeed in China, the report suggested companies focus on four priorities: product innovation, marketing and branding, sales and distribution, as well as retaining skilled people.
More consumers in China seek value and are prepared to pay more for products and services that they believe offer greater quality, safety and utility, said the latest China Consumer Market Strategies report released by the American Chamber of Commerce in Shanghai and Booz & Co.
The ascendance of value is a sharp departure from the past when many purchasing decisions were driven primarily by price. The survey called people leading this trend "value consumers."
The survey, which is based on interviews of more than 150 Chinese and multinational companies, found 83 percent of respondents took value as a major differentiator that can drive brand loyalty, and 87 percent expect an increase in consumers' willingness to pay more for quality products and services.
"Value consumers are a critical component in the growth of a vibrant consumer base," said Joni Bessler, director at Booz & Co. "It is because their buying behavior, or their focus on quality instead of cost, encourages companies to develop new and better products."
Bessler said the trend is a good for companies as they can get a return on their investments if they come up with offerings that are useful, attractive and compelling. It encourages companies to spend more on innovation.
Also, the gap between multinational companies and their Chinese counterparts is narrowing.
"Both Chinese and multinational companies view the opportunities, challenges and trends in the China consumer marketplace similarly, which leads to heightened competition for the same market segments," Bessler said.
The report forecast the Chinese consumer market will become the world's second largest by 2015, behind the United States, and will have enough purchasing power to buy 14 percent of the world's products.
E-commerce will also become more popular in the Chinese market, the survey said, with a sizable increase among multinational companies saying they will pay more attention to online sales in China.
To succeed in China, the report suggested companies focus on four priorities: product innovation, marketing and branding, sales and distribution, as well as retaining skilled people.
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