The study, based on an online survey of more than 1,000 consumers in urban and suburban areas in China, identified six distinct customer segments in China, including three that have a stronger preference for foreign brands and the brand characteristics they value most.
According to the findings, the consumer segment most likely to purchase foreign brands is the “Young Royals,” which consists of young college-educated adults, mostly women, who are more affluent, free-spending and keenly interested in foreign brands. This segment was twice as likely as any other segment to buy newly introduced brands (28 percent vs. 14 percent or less for other segments) and the most likely to say they want to be the first to test new brands (43 percent vs. 32 percent or less in other segments).
Two other segments likely to purchase foreign brands are: the “Aspirationals” -- young male and female consumers who, like the “Young Royals,” are highly brand-conscious and aspire to have the “latest and greatest,” but whose low income makes them unable to buy what they want; and the “Established Money” segment – higher-income men and women who, like the “Young Royals,” want the latest in technology and high-end, exclusive products. However, those in the “Established Money” segment value brands that are well recognized in the market.
The study also identified two consumer segments in China that are predisposed toward the purchase of domestic brands: “Patriots,” defined as overwhelmingly male (82 percent) consumers with average incomes who buy Chinese brands out of a sense of loyalty to their country; and “Value Buyers,” heads of households who favor practicality over flash and value over exclusivity. The sixth consumer segment, “Brand Apathetics,” tended to be rural or suburban students with little or no income who exhibited little discernable interest in brands.
“During the past decade, the Chinese marketplace has emerged as an important, but challenging business target in today’s global economy, with consumers whose buyer values and purchasing habits have evolved dramatically,” said Woody Driggs, managing director of Accenture’s Customer Relationship Management practice. “Many foreign companies have tried, but few have succeeded at selling into this diverse, complex and often confusing mega market, making it imperative for marketers of foreign brands to have their fingers on the pulse of changing consumer patterns.”
The study also found that Chinese consumers were not as influenced by traditional marketing channels, such as direct mail and print ads, as consumers elsewhere in the world. Instead, they relied on recommendations from the people they know, product reviews, endorsements and digital media, including online advertising, multimedia kiosks and digital signage.
A common theme among all segments was trust and reliability. According to the study, 81 percent of survey respondents, on average, said that being trustworthy is the most important attribute of a brand when making buying decisions across all product categories. This finding was especially true when it came to the financial services industry, with 91 percent of respondents citing trustworthiness as the most important factor. Reliability was also very important, cited by 80 percent of respondents.
The least important attribute was a company’s contribution to the community – seen as important by only 30 percent of respondents on average, with this attribute having the least impact when buying decisions were made in the high tech area (23 percent) and the most in financial services (40 percent).
“For a multi-national company seeking to achieve high performance in the competitive Chinese consumer market, our findings will provide marketing executives with information and insights they need to make decisions about how to fill their marketing and supply channels,” said Driggs. “A firm understanding of beliefs, values and decision drivers are required to create and offer distinct products and services that can ultimately win the trust of Chinese consumers.
About the Report
The study is part of Accenture’s ongoing effort to better understand what it takes to be a high-performance business in a multi-polar world – a world characterized by the rapid growth of emerging economies, closer economic integration across geographies, and the convergence of information and communications technologies.
This study of 1,022 Chinese consumers is part of a larger report that also included analysis conducted in August 2007 of more than 4,600 on-line surveys from respondents in Argentina, Australia, Brazil, Canada, the Czech Republic, France, Germany, India, Japan, Mexico, New Zealand, Poland, Russia, South Korea, Spain, the United Kingdom and the United States. Respondents from the countries provided insights about their shopping preferences and values that influence buying decisions.
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With approximately 170,000 people in 49 countries, the company generated net revenues of US$19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.