Navigating the Chinese Digital Divide-Addressing the evolving needs of Chinese Customers
"Navigating the Chinese Digital Divide-Addressing the evolving needs of Chinese Customers" is the latest thought leadership issued by Deloitte China Consumer Business and Retail Industry. Written by Deloitte consulting S&O team, this report surveyed more than 2,000 respondents from 10 cities in China, consisting of a cross section of tier 1, tier 2, and tier 3 consumers. The whitepaper showcases how Chinese consumers continue to visit brick and mortar stores; however, digital is growing and increasingly impacting their in-store behaviours and ultimately, brick and mortar sales. We hope this whitepaper can provide an action plan for consumer products and retail companies.
The viewpoints / key findings
The Digital Divide highlights the gap between consumers’ digital behaviors and expectations versus retailers’ ability to provide the desired experiences. Digital capabilities do not only drive online sales but also influence customers’ purchasing behaviour across traditional channels.
Digital, especially smartphones, is very influential in consumer's purchasing behavior
- In 2014, 59% of offline retail sales were influenced by digital and 34% were influenced by smartphones
- The digital influence is high across different product categories and the influence by smartphones follows the similar pattern
- Digital is more influential among higher income consumers, and on average, consumers spend ~10% more than they normally would under the influence of digital
Consumers use different digitals mediums to assist their shopping journey at different purchasing steps when they are in different occasions
- Desktop/laptop is the most used digital when at home/office, and smartphone is the most popular digital when both on the go and in-store.
- Of all 3 occasions, smartphones are most liked used for browse/research and for purchase, while social media has huge impact on all pre-purchase steps
During a typical “Online-Offline” path, consumers look for different features at different purchase stages; their preference differs between "function-driven" and "experience-driven" products; in addition, consumers from different city tiers show different features
- For "function-driven" products such as food/beverage, apparel and electronics, consumers prefer the ability to compare product/price online and to provide shopping convenience and product abundance offline.
- For "experience-driven" products such as furniture and automobile, consumers prefer ability to view customer reviews online and to provide extensive product information and logistic services offline
- In general, T1 consumers care more about convenience and service during the shopping journey, while T2&3 consumers focus on product/pricing comparison