Insights

Retail Shopping Trends in China
Article

Retail Shopping Trends in China

One in four shoppers know the prices of all the items regularly purchased and half of key city shoppers and 44% of non-key city shoppers know the prices of most items.

As China slowly but surely eases out of the economic recession, Chinese consumers have changed their shopping habits. In order to thrive in this new economic environment, understanding the latest shopping trends is critical for success.

Shopping frequency is on the rise

Along with the economic recovery came an increase in the frequency of shopper visits to most modern trade and traditional trade channels. Additionally, the slight rise in food prices in 2009 resulted in a 14% year-over-year increase in spending on food, groceries and personal care products in key cities. The increase in food prices, however, had a negative impact on snacks, confectioneries and drinks, as roughly one-third of shoppers indicated they have purchased less of these items.

Chinese shoppers are habitual and highly sensitive to promotions and pricing

More than half of shoppers in a recent Nielsen study said they tend to visit the stores they shop in regularly and the ones that are geographically closest to their homes. However, recommendations from friends, colleagues or relatives along with attractive deals promoted in newspapers or flyers were influential for one in five shoppers.

retail-shopping-trends-1

A change in the economic climate has increased shopper’s sensitivity to both promotions and prices. In fact, one-third of shoppers in both key cities and non-key cities actively search out promotions within their regular store, one-fourth buy different brands because of promotions and one-fourth of non-key city and one-fifth of key city shoppers will change the store they shop to find the best promotions.

About one in four shoppers know the prices of all the items regularly purchased and half of key city shoppers and 44% of non-key city shoppers know the prices of most items.

Private label acceptance is growing in China.

Private label has come along way in recent years and support of the retailer brand continues to grow more positively each year. And while non-key city shoppers are more accepting compared to key city shoppers, the overwhelming majority of key city shoppers recognize private label as a worthy choice. Fully 64% of key city shoppers believe that private label quality is just as good as leading brands.

Most shoppers still believe, however, that branded products are superior. Sixty-four percent of key city shoppers and 74% of non-key city shoppers say that private label products may be cheaper, but overall, manufacturer branded products are a better value for the money.

Private label image is still an issue for most shoppers as 60% think private label products are only for those on a serious budget. Retailers have an opportunity to improve perceptions as well as better market their brands as 64% say they don’t know enough about private labels to make them switch from their usual brand.

Competition is fierce.

The China retail environment is becoming increasingly competitive and retailers need to contend for share of wallet with increasingly fickle consumers. Nielsen’s Shopper Trends study provides h a comprehensive overview of the retail environment and insights to help manufacturers understand today’s Chinese consumer shopping habits; the brand equity of retailers; and opportunities for future growth.

Note – For the purposes of this study, “key cities” included Beijing, Shanghai, Guangzhou, Shenzhen, and Chengdu.  “Non key-cities” included Nanjing, Wuhan, Shenyang, Tianjin, and Fuzhou.