DATA POINTS: How to touch the unmoved Chinese shopper

Today’s Chinese shoppers need something that goes beyond the transactional task of buying, according to a collaborative report by TBWA China, The Integer Group China and Shanghai-based research agency Jigsaw International called ‘Checkout China’. The four shopper archetypes identified in the report reflect how most shoppers are no longer motivated solely by rational drivers like value and convenience, but have higher requirements on the experience and enjoyment of shopping—even in a hypermarket setting.

The in-depth report reveals the different stimuli behind purchase decisions in the FMCG category by looking through the lens of the brand, the shopper, and the retailer. The report is based on more than 20 interviews with chiefs of major international and local brands as well as the biggest retailers across China. Additionally, the companies carried out statistical market segmentation research covering 900 consumers after a preliminary qualitative market exploration in tier-one and tier-two cities.

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Gone are the days when significant growth can be achieved by just building a large distribution footprint across more and more cities. The battle to convert the shopper into a buyer is intensifying as the shopper becomes more adept at ignoring conventional promotions, rejecting point-of-sale strategies, taking cues from the surroundings to jostle for freebies or perks.

For the first time, key cities (Beijing, Shanghai, Guangzhou, Chengdu) saw a decrease in spending -1.9% in Q1 2014, mainly due to a reduction in growth of basket size. In this new economic context, marketers have to work harder to get a share of an increasingly smaller basket size.

Key recommendations in the report include: knowing the epicenter of each shopper continuum, defined as the moment in the 'pre-tail', retail and 'post-tail' stage when the shopper decides to make a purchase; leverage retailers' CRM programs to deliver targeted branded content; create 'shoppertainment' excitement and interactivity inside the usual retail environments.