Click here to close now.




















Welcome!

News Feed Item

Rapid Rise in Online Shopping Behavior in China Reshapes Company Strategies

AmCham Shanghai and Booz & Company survey finds Chinese consumers increasingly seek higher quality products and shop online, two key trends driving company strategies

SHANGHAI, Aug. 21, 2013 /PRNewswire/ -- Chinese consumers are increasingly opting for quality goods at higher prices and adopting on-line shopping and social media to gather product information - two key trends driving company strategy in China. This is according to a report jointly released today by The American Chamber of Commerce in Shanghai (AmCham Shanghai) and Booz & Company.

The 2013 China Consumer Market Strategies, the third annual report based on a survey of nearly 90 Chinese and multinational companies (MNCs), measured how companies rank 7 major trends by importance and the approaches they take to respond to them. This year's survey also included a section aimed at evaluating companies' digital capabilities.

For the 2nd year, companies ranked the evolution of consumers - from price-driven purchasers to value-driven consumers - as the top trend driving their China market strategy. Chinese consumers, particularly in Tier-1 and Tier-2 cities are seeking greater reliability, consistency and integrity in consumer products.

With the rise of e-commerce and social media, the 2nd most important trend identified in the report, both multinational and Chinese companies reported that they recognize the importance of developing digital marketing and sales channels. However, the majority of companies declared that they are not yet adequately prepared to convert growing online interactions to a sales advantage.

In contrast, the report noted that leaders in this area demonstrate an ability to make strategic use of data derived from online viewing and purchasing habits, and to align digital activities with their corporate strategies and across organizational functions.

Robert Theleen, Chair of AmCham Shanghai said, "The report highlights that the use of mobile devices, online shopping and social media is a disruptive business trend. Companies must develop targeted strategies and China-specific capabilities that enable them to respond and beat out competition."

"China's rising middle class have high expectations of consumer products and also a need for product verification. With the rise of e-commerce and social media, online marketing channels and Internet forums offer a platform for consumers to gather the intelligence they need to make informed purchasing decisions," Theleen continued.

"In China, consumers leapfrog their counterparts in other markets by adopting technologies to gain bargaining power. They are sophisticated in using social networking platforms to form alliances with like-minded consumers, which would be hardly possible in developed markets. Companies have to stay vigilant to the power of the online activities, with opportunities for online engagement to enhance or harm a brand."

THE TOP TREND: VALUE AS A DIFFERENTIATOR

For the second year, both MNCs (69%) and Chinese companies (55%) chose "value as a differentiator" as the most important consumer trend in Chi­na today. In Tier-1 and Tier-2 cities, an increasing number of consum­ers are seeking greater reliability, consistency and integrity in the products they purchase. This represents a significant evolution from what has been a price-driven market.

Adam Xu, Director for and Consumer & Retail Practice at Booz & Company, said, "As China's consumer market matures, Chinese consumers in developed cities and regions continue to trade up in their purchasing choices. This presents companies with opportunities to build products and brands that could deliver great value. However, to capitalize on this trend, companies will need to strengthen their capabilities in innovation and branding."

A significant majority of MNCs and Chinese companies (70%) expect this trend to increase brand loyalty among consumers focused on value and 85% expect to see an increase in consumers' willingness to pay higher prices for quality products and services.

THE RISE OF E-COMMERCE AND SOCIAL MEDIA

The rise of e-commerce and increasing integration of social media into the day-to-day lives of consumers was ranked as the second key trend by Chinese companies (58%) and MNCs (55%).

Adam Xu said, "Although consumer companies in China have high levels of confidence due to their long experience in the market and success relative to their peers, they still face several challenges adapting to the rising digitization trend. In contrast to findings from our global digital study, the key challenges for companies in the China market are measurement of success, organizational alignment and adapting global capabilities for China."

Companies admit that they have yet to make operational improvements keyed to the Internet and take actions to integrate the digital dimension into their branding and product development.

While a large majority of companies rank themselves as digital novices, leaders in this area demonstrate an ability to make strategic use of data and align digital activities to their corporate strategies. Leaders also reported two capabilities as critically important: innovation and the omni-channel brand experience.

The success of China's homegrown smartphone maker Xiaomi Technology is as a good example of a company capable of integrating intelligence gleaned online into its business process. For product development, it solicits suggestions for new features and improvements from an online community of brand followers. Most of its products are also sold online through preorders, giving it manufacturing and marketing edges.

"We believe AmCham Shanghai has embraced the go-digital trend in launching our SME Virtual Center, the first online platform in China serving SMEs in the U.S. The online resources we provide will empower American SMEs to tap into China's growing consumer market," said Robert Theleen.

The 2013 China Consumer Market Strategies report identified three key challenges in digitization faced by consumer-facing companies in China, both Chinese companies and MNCs:

  • Measurement. Compared with the global benchmark, consumer companies in China find themselves equipped with limited ability to measure the results of complex online activities.
  • Execution of digital strategy. Companies appear to encounter difficulty in making digital initiatives a priority across their organizations.
  • For MNCs, leveraging global capabilities of an organization to address China's unique online environment is also a challenge.

About the 2013 China Consumer Market Strategies

The 2013 "Business Response to Trends in China's Consumer Market" survey was conducted by The American Chamber of Commerce in Shanghai in cooperation with Booz & Company, a global management-consulting firm that works with many of the world's top businesses, governments and other institutions. The survey seeks input from executives from consumer-facing companies operating in China on key market trends and their responses. This is the third annual report by AmCham Shanghai and Booz & Company.

About AmCham Shanghai
The American Chamber of Commerce in Shanghai, known as the "Voice of American Business" in China, is the largest and fastest growing American Chamber in the Asia-Pacific region. Founded in 1915, AmCham Shanghai was the third American Chamber established outside the United States.

As a non-profit, non-partisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.

Visit www.amcham-shanghai.org for more information about AmCham Shanghai.

About Booz and Company

Booz & Company is a leading global management consulting firm focused on serving and shaping the senior agenda of the world's leading institutions. Our founder, Edwin Booz, launched the profession when he established the first management consulting firm in Chicago in 1914. Today, as we approach our 100th anniversary, we operate globally with more than 3,000 people in 57 offices around the world.

We believe passionately that essential advantage lies within and that a few differentiating capabilities drive any organization's identity and success. We work with our clients to discover and build those capabilities that give them the right to win in their chosen markets.

We are a firm of practical strategists known for our functional expertise, industry foresight, and "sleeves rolled up" approach to working with our clients.

To learn more about Booz & Company or to access our thought leadership, visit booz.com. Our award-winning management magazine, strategy+business, is available at strategy-business.com.

SOURCE AmCham Shanghai

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
Learn how to solve the problem of keeping files in sync between multiple Docker containers. In his session at 16th Cloud Expo, Aaron Brongersma, Senior Infrastructure Engineer at Modulus, discussed using rsync, GlusterFS, EBS and Bit Torrent Sync. He broke down the tools that are needed to help create a seamless user experience. In the end, can we have an environment where we can easily move Docker containers, servers, and volumes without impacting our applications? He shared his results so yo...
Palerra, the cloud security automation company, announced enhanced support for Amazon AWS, allowing IT security and DevOps teams to automate activity and configuration monitoring, anomaly detection, and orchestrated remediation, thereby meeting compliance mandates within complex infrastructure deployments. "Monitoring and threat detection for AWS is a non-trivial task. While Amazon's flexible environment facilitates successful DevOps implementations, it adds another layer, which can become a ...