The internet and personal style drive Chinese consumers

(AFP PHOTO LIU Jin)

The internet and a growing sense of personal style are the driving forces behind the purchases made by the majority of young Chinese consumers according to a new consumer report.

The Chinese consumer report 2010 released at the end of July by strategy consultants Roland Berger shows that the preferences and behavior of Chinese consumers are becoming increasingly sophisticated.

The survey of 1200 participants found that internet word of mouth, abbreviated to IWOM, is becoming increasingly important in influencing purchases as are non-price-related factors such as quality and good customer service. Growing individualism amongst Chinese consumers is also being reflected in their purchasing habits as they seek unique ‘stand-out' products.

While younger Chinese consumers and those with middle-range incomes were concerned with brands that were associated with fun and excitement, older consumers and those with higher incomes sought out brands which they associated with efficiency and performance.

Young Chinese consumers also place growing emphasis on personal style, and staying up to date with fashion is considered important. This growing individualism and sense of style is reflected in the mobile phone market: the survey found that a quarter of consumers "buy a new phone simply because they feel their current phone is no longer in style." The average lifespan of a mobile phone in China is 1.5 years, similar to mature consumer markets.

However the survey by Roland Berger found that the biggest influence on consumer brand awareness and purchasing decisions is the internet. The internet population of China was estimated at upwards of 384 million, young Chinese consumers often rely on IWOM from the numerous chat rooms to inform them of brands and products; 56.3 percent of Chinese consumers learned about a brand first through the internet and 58.7 percent decided to purchase products based on IWOM recommendations alone.

As well as garnering product information from the internet, young Chinese consumers are also increasingly using the medium to make purchases. The amount of online shopping transactions in China has grown at a rate of 100 percent a year for the past several years and e-commerce is growing at a rate 5 times faster than in the US. Though e-commerce is growing at a phenomenal rate, the market is still very much in its infancy when compared to that of the United States, as it lacks consumer-oriented facilities such as secure payment channels or computer-generated product recommendations. However it is thought these areas will mature as the Chinese e-commerce market continues to expand.