Rethinking your marketing strategy? Look toward emerging markets, mobile, and growing digital commerce in China
Consumer preferences are constantly shifting, depending on variables such as the rate of new technology adoption and changes in income levels, which applies to how shoppers feel about their job prospects.
The Asia-Pacific region, in general, is home to consumers who work long hours and are exceptionally smartphone-savvy. In fact, some emerging markets in Asia have consumers that don’t even own a computer and rely on their smartphones for their digital pursuits. Concerns about the world economy and how it affects future job prospects can also be a dampener on consumer confidence.
In an effort to better understand the consumer of 2016 (and toward the upcoming year), here are five insights that we’ve compiled in regards to Asia-Pacific shoppers’ and buyers’ mindsets.
1. Consumer confidence in advanced economies have been reduced due to job sentiment
In Hong Kong and Japan, two of Asia’s advanced economies, negative job sentiment has reduced consumer confidence. According to a Q1 2016 report from Nielsen, in which 30,000 online consumers were polled, “both countries’ positive job sentiment levels showed double-digit declines in terms of percentages.”
While only 22 per cent of surveyed workers in Hong Kong said they felt future job prospects were good, only 23 per cent in Japan reported to be satisfied with work opportunities in the year ahead. Workers in China viewed future job opportunities slightly more favourably, as 60 per cent felt positive in regards to future prospects — although sentiments are still at the lowest since 2010.
2. Economic concerns in advanced economies affect consumer confidence
The Nielsen report also revealed that consumer confidence in Australia was tied to worries about the local economy. In Australia, confidence declines reflect increased anxiety about the future of the economy.
The Compass Index also shows similar trends, wherein 1,200 respondents across seven APAC countries were surveyed. In mainland China, 42.3 per cent of workers were worried about how the world economy would affect their business, and similarly in Hong Kong, 39.2 per cent cited the global economy as a cause for concern. Also in Singapore, 37.9 per cent shared similar sentiments about the state of the world economy.
3. Increased FDI in emerging markets can be linked to increased consumer sentiments
While those in advanced economies worry about the future of the global and their local economies, the emerging markets — particularly in the Philippines and Vietnam — are seeing higher consumer scores. According to the Nielsen report, “these robust member states of ASEAN have seen increased foreign direct investment combined with strong domestic demand, which has likely helped keep consumer sentiments up.”
Positive sentiments in regards to their work is also related to this uptick in confidence, as the Compass Index shows that workers in the Philippines and Vietnam regard upward mobility at their workplaces very positively — as 63.1 per cent and 67.3 per cent respectively look forward to a raise in the coming year.
3. Digital commerce in China is the next big opportunity
Companies of all stripes are diversifying their product lines in hopes to capture the interest of digital shoppers in China. According to a 2016 Accenture report on Chinese consumer trends, 95 per cent of shoppers use the internet to make purchase decisions. In fact, China’s e-commerce market was worth US$371 billion in 2015 and is slated to hit US$630 billion by 2019. These massive shifts are owed to disruptive e-commerce platforms such as Alibaba’s Tmall and Taobao, which has fuelled digital commerce trends.
The report also delves into the gaps that technology fills, which changes consumer behaviour over time: “Today, Chinese consumers expect companies to give them what they want, when they want it. By 2020, they’ll be expecting to get what they want, how they want it. And by 2025, they’ll expect smart assistants that can provide what they want, before they know they want it.”
According to the Compass Index, the mobile habits of Chinese smartphone users are unsurprisingly centered on WeChat usage — with 67.3 per cent respondents claiming that the app is their “most visited” social platform where undoubtedly the bulk of digital commerce transactions happen.
A Bain & Company report published this year also brings up the opportunity for digital commerce in Southeast Asia, which is slated to be “on the verge of an e-commerce boom.” This is due to the region’s rate of digital adoption, although many consumers are still new to the idea of online shopping.
5. Mobile commerce opportunities are abundant in all of Asia
As the Accenture report on shoppers in China also reveals, 77 per cent of Chinese shoppers find it easiest to shop via mobile phone — pitted against the global average of 48 per cent. This is largely due to yet another disruptive platform created by Tencent, wherein one stop shop app WeChat has captured 700 million monthly active users. Everything can be done through the app, including shopping for clothes, hailing a taxi and paying for a meal at a restaurant. Spending per digital buyer, according to the report, has more than doubled to 9,732 yuan (US$1,437) between 2011 and 2015.
WeChat is also cited by 67.3 per cent of Chinese mobile users in the Compass Index as the most used ‘social platform’, and the super app is said by many to be powering a mobile commerce boom in China. Beyond the WeChat phenomenon, social media has become an ideal platform for brands to reach out to shoppers, as seen in Facebook’s ‘Buy’ button and ‘Sale’ groups.
As for the rest of Asia, a Q4 2015 report from Criteo showed that Japan and South Korea were leading in terms of mobile transactions. Particularly in these two countries, smartphones are the device of choice, as opposed to the tablet, when it comes to any mobile commerce activities.
In a global context, mobile accounts for 35 per cent of all e-commerce transactions and that number is expected to grow — as the convenience of shopping via mobile apps continues to heighten in consumers’ minds.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your post here.
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