Word of mouth key in emerging markets

BEIJING: Brand owners seeking to engage shoppers in emerging markets should prioritise building word of mouth, a strong in-store presence and consumer consideration levels, McKinsey has argued.

Based on a survey covering the food and beverage sector, the consultancy found that 92% of people in Egypt agreed their purchase choices were influenced by the recommendations of friends and family.

This figure also stood at 71% in China, compared with Nigeria on 49%, South Africa on 46% and Indonesia on 44%. Respondents in the US posted 44% on this metric, declining to 29% in the UK.

Similarly, a 64% majority of Chinese customers would readily take the views of these groups into account when weighing up which moisturiser to buy, a rating falling below 40% in the US and UK.

One reason for such a trend is the relative inexperience of shoppers. Over 60% of people purchasing a car in China, for example, are doing so for the first time, an amount reaching between 30% and 40% for laptops.

"Few brands have been around long enough to ensure loyalty," McKinsey said. "Seeing a friend use a product is reassuring. Indeed, the less a consumer knows about a product and the more conspicuous the choice, the more the consumer is likely to care about the opinions of others."

Digital interactions, however, have a limited impact at present, with only 53% of Chinese shoppers finding web recommendations a credible source of information, versus 93% for friends and family.

Moreover, a modest 23% of buyers in China researched products online. For their peers in the US and UK, uptake of this activity grew to 60% when discussing the food, beverage and electronics sectors.

Similarly, Chinese consumers considered three brands prior to purchase, and chose one of them 60% of the time. Americans and Europeans considered four brands, and acquired one on 30–40% of occasions.

In keeping with this, a 49% share of Chinese buyers selected between several body care brands in stores rather than using a pre-determined list, as did 48% for haircare, 44% for moisturiser and 37% for cosmetics.

Additional research by McKinsey also revealed 45% of Chinese shoppers had left stores with a different product than they planned to buy due to the suggestion of in-store salesmen, declining to 24% in the US.

"The in-store phase of the consumer decision journey tends to be longer and more important in emerging markets than in developed ones," McKinsey said. "As a result, in emerging markets there is significantly more room to influence and shape consumer decisions at the moment of purchase."

Data sourced from McKinsey; additional content by Warc staff, 24 September 2012

SIMILAR NEWS