The Chinese Digital Consumer

Digital Marketing in China is much larger than many expect, with over 668 million consumers connected to the internet and 596 million mobile internet users.

China has both the largest internet population and the largest number of mobile internet users in the world. Any business looking to promote their products in China needs to join the online revolution.

Chinese consumers are not all using the internet in the same ways - and that’s not simply referring to the devices they choose to use. The McKinsey Report, Understanding China’s Digital Consumers, found that they are seven key consumer segments in China – each with varying usage patterns and preferences for apps and devices.

Heavy Users

The "heavy users" category is made up of two segments of consumers who spend more than 28 hours a week on digital media.

The Digital Junkie (6% of the market)

These are the internet addicts. Spending an average of 34 hours on digital media each week, these users are young (42% are between the ages of 18 and 24) and always on the lookout for the latest gadgets. They prefer mobile devices and laptops which they can use anytime, anywhere and replace their mobile handset, on average, every 17 months with a newer, more advanced device.

Gamers (9% of the market)

Gamers spend most of their online time playing video games, however, when they’re not playing games, you’ll find them on Chinese social media. This segment is primarily made up of young, low income consumers living in low-tier cities who spend more than 90% of their gaming time on their PC rather than mobile gaming devices.

Moderate Users

The "moderate users" category is made up of two segments of consumers who spend an average of 14-28 hours a week on digital media.

Info-centric (17% of the market)

These individuals prefer their desktops over mobile devices and focus on more practical internet applications. They spend their time online searching for information that will improve their productivity at work, writing emails or reading. The info-centric segment is primarily made up of 25-34 year old business executives on a relatively high income.

The Mobile Mavens (8% of the market)

These individuals love their mobile phones, preferring to search the web from their mobile devices instead of being tied to a desktop. Whilst they will use PCs, they dedicate an average of 39% of their digital times to their mobile phones. These individuals are quick to snatch up the latest portable devices and they are twice as likely to replace their phones every 12 months or less, compared to the average user.

Light Users

The "light users" category is made up of 60% of all digital consumers in China, with these users spending less than 14 hours per week on digital media.

The Traditionalists (25% of the market)

The "traditionalists" is the largest segment with ¼ of all digital consumers falling into this category. These individuals watch more television than those in other segments and are less likely to own, want or use digital devices. These people generally live in smaller cities and are less educated than those in other segments.

Online Traders (18% of the market)

Online traders use the internet to trade and track their online stocks. The segment is mainly made up of middle-aged men in tier 1 and 2 cities.

Basic Users (17% of the market)

These users are typically high school students or blue collar workers on a tight budget. They spend the least amount of time on any media – be it digital or traditional. 25% of these consumers are between the ages of 15 and 17 years old and 79% of these consumers fall into the "low income" bracket. They spend an average of 8.5 hours per week on digital media, compared with 15.8 hours for the average digital consumer.

But whilst these individuals only spend a small amount of their time online, they’re not a lost cause for marketers. 24% of these individuals own a mobile phone equipped with basic entertainment features such as MP3 playback – and 47% expressed a willingness to pay a premium price for high quality audio on their mobile phone.

Room to grow

The digital landscape in China is changing daily.

China’s digital consumers are constantly and quickly evolving; both in terms of the devices they use and where/how they spend their time online. Companies that take the time to understand these consumers, and adjust their marketing and advertising campaigns accordingly, will be better positioned to develop a business model that is both attractive and profitable.

Unlike western consumers who respond well to television, billboard and newspaper advertising, Chinese consumers are spending less time engaged with those media and are more interested in what they can find online.

One of the important characteristics of Chinese Digital Consumers is the preference for mobile devices when accessing the internet. Smart phones, rather than tablets, are the most dominant mobile device used to access the internet in China. Mobile commerce has increased since 2011 in China and, as a result, mobile shopping Gross Merchandise Value (GMV) increased from AUD $2.6Bn to AUD $209Bn from 2011 to 2014 - an incredible CAGR of 332%.

Mobile commerce is expected to exceed GMV from PC devices in 2015, becoming the top driver for Chinese eCommerce growth. This strong growth momentum covers all industries; payment, ticketing, travel booking, restaurant food delivery and more.

But whilst more and more consumers are turning to the internet and the tremendous new opportunities unlocked by mobile, the Chinese digital revolution still has further room to grow on top of current 48.8% internet penetration.  Even with the rapid growth seen in recent years and the increase of online penetration in retail sales to 10.6% in 2014 (higher than US online retail sales penetration), China still has a long way to go before it reaches saturation.

One of the most important factors for businesses to consider when developing their online marketing strategies is the wariness of forms of digital activity beyond communication. Whilst most Chinese love chatting with their friends and keeping up with their lives online, many of them  are still hesitant to buy online or trust online applications, particularly for higher priced items, health and baby products, etc. This gives companies the opportunity to work on building this trust and promoting their products and services through other digital avenues.

A Whole New World

The difference between Chinese digital consumers and Western digital consumers is obvious; the sites and apps that are popular in Western countries could be simply banned or unheard of in China. Chinese digital consumers spend their time in online environments which are entirely different to those of their Western peers, although some of their basic needs are very similar. For example, Facebook, Twitter and WhatsApp are replaced with Micro Blogging and WeChat in China where users can publish their social moments as well as call or instant message their friends. eBay and Amazon are both relatively unheard of in the region, however, eCommerce is dominated by local alternatives Taobao, T-mall and JD.com.

Just like in the West, search engines are the most important channels when it comes to generating digital traffic, however, Google is replaced with local search engines such as Baidu, Sogou and 360; the top 3 search engines in the region.

How to target Chinese Digital Consumers

To capitalise on the opportunities created by these rapid changes in the digital realm; companies need to approach China as a unique market and take the time to understand how and where Chinese consumers spend their time using digital technologies.

This means understanding where and how to interact with consumers (both online and offline) and learning how, why and when consumers browse and shop online.

At Sinorbis, we know China. We understand the different market segments, we know who they are, what they want and how they’ll get it and we know how to help your business gain a critical competitive advantage in the Chinese market. Contact us today to find out how we can help you.

Stoking the Dragon: Unlocking China's new generation of Digital Consumers

We’ve only touched briefly here on a couple of aspects that make reaching the Chinese digital consumer so challenging for Western brands. To get the full scoop, check out our free whitepaper Stoking the Dragon: Unlocking China’s New Generation of Digital Consumers. Download it now.

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