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Shoppers optimistic about economy: survey

By Amy He in New York | China Daily USA | Updated: 2015-10-28 11:23

Chinese consumers are optimistic about their country's economy despite a rocky stock market turndown this past summer, but they will be changing their shopping habits and turn even more toward e-commerce, according to a study.

The survey by consulting firm McKinsey found that frequent online shoppers in their 20s and 30s who live in first-tier cities are optimistic about the economy after the market turmoil, about 10 percent more than consumers in other age groups with different shopping habits.

More than 50 percent of the respondents in McKinsey's survey of 1,200 consumers in September said that they experienced a loss in their investments because of the stock market decline, but many said they remain optimistic about the country's broader economic growth. About 70 percent expect wages to increase this year, the survey showed.

The report - China's Economic Dip Is Moving Shoppers Online, released on Tuesday - also showed that shoppers are looking to make more purchases online. The vast majority of respondents, 84 percent, said they will buy more online in the next six months, primarily because it's the "smarter way to spend," and 62 percent said that price was the No 1 reason to purchase online.

"The bargain hunter paradise that is the Internet in China still appeals to consumers, but not significantly more than in the past for these items," the McKinsey report said.

Consumers said they will spend more on food and beverage, as well as leisure travel and entertainment (such as dining out), but will cut back on categories like electronics and gadgets, and if they increase their discretionary spending, they will buy more expensive brands.

Avery Booker, partner at consulting firm China Luxury Advisors, echoed similar sentiments, saying that young consumers' motivation for buying online is not just price-based, but convenience-based, which is also resulting in an increase in mobile payments. "Some of the more digitally savvy brands are giving them the ability to use these payment methods to reserve or purchase items," he said.

Changing consumption patterns mean that companies need to adapt their product and pricing strategies to accommodate shoppers who will be making purchases less frequently and who will be paying more attention to quality, the report said. It suggested that companies revise their business models from selling one-off devices to creating ongoing revenue streams for users who hold on to the same device for a longer period of time, for example.

Companies in the entertainment and travel sectors need to offer the best web and mobile shopping experiences, McKinsey said, and they need to "accept the changing rules of the game and collaborate to stay relevant and top-of-mind for consumers."

China Luxury Advisor's Booker said that a strong mobile presence is needed, either via social media platforms like WeChat, or through a mobile-optimized website.

amyhe@chinadailyusa.com

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