Insight & Analysis

The Buying Power of Chinese Online Consumers


Chinese online shopper

According to the International Monetary Fund, China has overtaken the US as the world’s largest economy. With a booming domestic economy and the rise of an affluent middle class with plenty of disposable income, Chinese consumers are now among the biggest purchasers in the world.

In spite of their recent economic superiority, many Chinese consumers value western-manufactured goods over home-grown versions, and they are prepared to spend a bit more to get their hands on them. This, as well as the fact that the majority of Chinese consumers are tech savvy and are used to purchasing online, makes China a highly desirable market for Australian retailers – especially in the e-commerce space.

Chinese buying power set to increase

China’s middle class is expected to grow to around 60% of the population by 2016 and in line with this, the purchasing power of the middle class is also rising.

Women in particular are behind the growth of online shopping in Asia, according to a report by Vipshop Holdings Limited who partnered with the Economist Intelligence Unit of the Economist Group last year to conduct a survey on the buying power and habits of female consumers in Asia.

The findings of the report revealed that many female Asian consumers prefer to purchase online especially for groceries (just under 80%), cosmetics (83%) and clothing and accessories (almost 90%). Interestingly, for Australian retailers, 53% of women in mainland China saw products from abroad as being superior to local ones.

What are the main challenges faced by retailers entering this space?

Australian retailers are vying for a piece of this new and emerging market, but although Australian businesses are well placed to service Chinese customers there are some challenges, especially when it comes to getting the marketing right. Here are three of the main challenges retailers face when entering the Chinese market.

  1. How to target consumers

Targeting the Chinese market can be tricky as there is such a wide variety of different groups within it. No one-size-fits-all marketing message will work. Niche is usually best, and for many businesses this means seeking advice from someone with in-depth market knowledge who can help you learn about the different groups and the best way to reach them.

  1. How to reach consumers

Once you know who to target, how do you reach them? Online is usually best but there are other consideration depending on the habits of the group you are targeting. Again, this is where extensive knowledge of the Chinese market can save you time and money and ensure that your message is getting in front of the right people in the right places.

  1. Language barriers and expectations of Chinese online consumers

A strong command of your target audience’s language is essential, as is an understanding of Chinese online consumers’ expectations, which are often different from those of Australian consumers.

If you’re keen to get started in the Chinese retail space, but feel you need some help with your marketing, give us a call today! Our China Online Marketing team speaks the language and has specific expertise in marketing Australian brands to Chinese online consumers.

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