Data scientists identify top 50 Chinese cities where consumer demand shows highest potential
for new online/offline options
Online exclusives top list of best ways to boost incremental sales
SHANGHAI – September 8, 2015 – According to the latest Nielsen survey, China has become the world’s biggest online shopping market—largely due to the rapid increase of its online citizens, the popularization of smart phones and continuous penetration of Internet. Nielsen Greater China presented insights on the retail phenomenon during a presentation titled, Offline and Online Convergence—Winning in the World’s Biggest Digital Market at its fourth Consumer 360 Forum held September 8 in Shanghai.
Convenience is a deciding factor for how and where consumers shop. Nielsen ranked the top 50 Chinese cities with the highest potential need for advances in shopper convenience based on channel development status and consumer demand. For retailers, the rankings highlight the top areas to expand physical stores and identify places where online strategies that take advantage of physical outlets can enable faster distribution capability and greater product choice. The rankings (see below) were shared during the presentation and were made available online following the Consumer 360 Forum.
"Chinese consumers like online discounts and leveraging online capabilities for greater product choice,” said Steven Li, Vice President of Nielsen China. “Online consumption tends to be more diversified, and offering online exclusive items is a winning strategy to bring incremental sales to an organization. Retailers should be looking at online and offline strategies in tandem. Internet penetration and mobile phone availability are changing the retail landscape throughout the market, and while we consider the online market in China to be very mature, there is still a great deal of untapped potential for growth.”
Nielsen found that 22% of impulse food sales are online exclusive items. The same trend happens in other large categories like Baby and Personal Care, as well. The popularity of these online exclusive items exemplifies an untapped market for retailers and an opportunity to expand channel coverage without cannibalizing in-store sales. For the FMCG market, online purchases represent 24% of all sales. To add further context, online sales are growing at 6 times the rate of offline sales. The rapid growth of online shopping is striking, but it won’t replace offline shopping anytime soon, as physical stores have their own unique advantages.
“Consumers are no longer relying on a single path in the shopping journey,” said Steven Li, Vice President of Nielsen China. “With every purchase decision, consumers measure convenience, comfort and price and exercise their options accordingly. Consumers are not willing to give up the offline shopping experience and, likewise, want to enjoy the convenience of buying goods online. The result is a convergence of online and offline consumer expectations that propose both opportunities and challenges for manufacturers and retailers.”
At the company’s Consumer 360 Forum, Nielsen leadership shared the following insights.
· Attract cross-regional consumers with the advantages of online shopping.
· Seek opportunities in different categories. For online exclusive items, increase efforts around product introduction, innovation and development to meet the consumers’ unmet needs offline.
· Emphasize overseas best sellers to further expand the range of domestic consumer market.
· Digital marketing optimization offers complementary online and offline advantages, and fulltime connection with consumers.
For more information on Nielsen Greater China’s Consumer 360 Forum event and insights, visit: http://www.nielsen.com/cn/en/events/2015/consumer-360.html .
Nielsen N.V. (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content—video, audio and text—is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement, as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the world’s population. For more information, visit www.nielsen.com.
Andrew McCaskill 347.331.5725-US [email protected]