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Nielsen: Changing Chinese Shoppers Reshape China’s Retail Landscape

Contact:
Sue Feng, sue.feng@nielsen.com, 010-5912-9195

Still price-cautious, Chinese shoppers become more discerning and willing to try new things

Convenience is the KEY to win shoppers today

Shanghai – Nov. 6, 2014 – With Single’s Day just around the corner, is China going to witness another record-high shopping spree? Nielsen’s latest 2013-2014 Shopper Trend Report is aimed at bringing a deeper and complete profiling of today’s Chinese shoppers.

Given a variety of choices to shop and buy, Nielsen reports that Chinese shoppers tend to be more discerning than ever before, while at the same time, willing to try new brands and products. Nielsen is a leading provider of information and insights into what consumers watch and buy.

More demanding, but less loyal

According to the Nielsen 2013-2014 Shopper Trend Study, though still around two thirds (67%) of Chinese shoppers consider price as one of their primary concerns, this percentage rate has decreased gradually from over 70% over the previous couple of years.

Meanwhile, the report shows that in the face of the rising prices of consumer goods, Chinese shoppers prefer to take proactive actions to react on the price rise. The ratio of shoppers who actively seek for special discounts rose from 43% in the past year to 46% this year, while the percentage of those who choose to buy in bulk for lower prices rose from 32% to 40% today.

Nielsen’s information also shows that with the increasing number of retail stores, the types of retail stores visited by Chinese shoppers also increased 12.5% on average over the past two years.  

“Today, China sees a more diverse retail landscape, which makes it possible for  Chinese shoppers to visit different kinds of retail channels for the products that suits them best, meantime, we have seen a much higher acceptance towards new and emerging channels, such as e-commerce channel,” said Georgia Zhuang, Vice President of Nielsen China.

Since 2009, Single’s Day has become China’s biggest online shopping event, with the online trade value on this specific day keep increasing year on year. “With the rapid development of e-commerce and mobile commerce, online shopping has become a part of life for quite a few Chinese shoppers”, said Zhuang. “In this regard, a deeper understanding of Chinese shopper behaviors is the key for retailers to adjust their business strategy in today’s evolving O2O market, thus winning the hearts and minds of Chinese consumers.”

Along with more channels to visit, the report indicates the number of shoppers who would love to try new brands or products over the past three years also increased quite a bit, from only 15 % in the past year to the current 26%. In particular, those shoppers who “sometimes buy new brands or products, but usually stick to their favorites” dropped by 11 percentage points from 70% to 59% currently.

“In today’s environment, we are seeing rapid change in the shopping behavior of Chinese consumers. As such, a better and deeper understanding of consumers, including where they go and how they make shopping decisions, has become increasingly important for retailers and manufacturers to catch every opportunity from shoppers’ evolving behavior,” said Zhuang.

Bigger opportunities in lower tier cities

Across the country, Nielsen’s information shows that Tier 3 cities sees the strongest expansion of modern trade channels, with the number of hypermarkets, supermarkets and convenience stores combined growing 13% in tier 3 cities and only 11% in tier 1 and 2 cities.

“We see the continuous trend of expansion from China’s retail channels into lower-tier markets when more and more consumers are embracing modern lifestyles that first appeared in higher-tier cities,” said Zhuang. “As precision marketing on today’s segmented shoppers has only just touched the surface, we still see many opportunities in these markets. As the retail competition in high-tier cities’ gets more and more fierce, future growth will mainly come from lower-tier markets.”

From the traditional trade perspective, Nielsen’s figures also show that although  traditional trade retail store numbers only grew by 2% over the past year, self-service groceries, compared with non-self-service groceries whose store numbers remain flat, enjoys a much higher growth of 7% overall. These self-service channels now contribute 46% of the total sales value within traditional trade channels.

Convenience is King

According to Nielsen information, compared with other types of retail channels, convenience stores, by store count, registered a year-on-year growth of 17% across the country. The figure is even higher in tier 3 (21%) and tier 4 (26%) cities.

“Over the past few years, convenience stores have stood out as a very fast-growing channel in China’s retail landscape,” said Zhuang. “Convenience is a key trait of today’s Chinese consumers that nobody can ignore, which also finds its best expression in the quick rise of mobile commerce and internet financing channels.”

Besides the rapid growth of convenience stores, Chinese consumers’ pursuit for convenience can also be observed in how they choose where to shop. “Excellent customer service” remains as the top brand equity contributor for Chinese shoppers when choosing where to shop. However, convenience has become another key factor behind their “store of choice”.

Nielsen’s survey shows that following “excellent customer service”, “convenient location” ranks as the second most important brand equity contributor. Closely behind are “a place where it’s easy to quickly find what I need”, “everything I need in one shop” and “efficient check-out counters”. In particular, the ‘one-stop” offering of all groceries jumped significantly from the ranking of 13th to the current 4th , while the “efficient check-out counter” facility also sees a big jump from 15th in the past to the current 6th.

“Regardless of whether you’re a multinational or local retailer, putting in additional effort to ensure your customers have a convenient and straightforward shopping experience is the key to truly winning the hearts and minds of today’s Chinese shoppers,” concluded Zhuang.

About the shopper trend report

Nielsen’s 2013-2014 Shopper Trend Study for China is aimed at providing a comprehensive overview of FMCG retail environment trends, banner equity tracking and in-depth analysis of shopping behaviors and patterns across markets and trade sectors. The report, which was conducted early this year, is based on door to door interviews of 11,740 respondents aged 15-65 years from 41 cities across China.

About Nielsen
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.