Brand trends mixed in China

07 November 2011

BEIJING: Consumers in China are still strongly influenced by brands, but loyalty to individual companies and products remains limited, a study by McKinsey has found.

The consultancy surveyed 15,000 urban adults in the country, and revealed 42% agreed "well-known brands are of better quality", and 32% afforded a similar status to expensive goods.

While these figures had declined slightly from 45% and 33% respectively last year, they remain substantially ahead of markets such as France, Taiwan and the US, McKinsey argued.

"Today, hundreds of different brands are a familiar part of Chinese consumers' experience," McKinsey said. "The survey detects no let-up in the influence of brands on consumers' buying decisions. But neither does it yet indicate strong signs of increasing loyalty to any single brand."

Participants in China typically considered five apparel brands when making category purchases, four in the food and beverage sector, and three competing electrical household appliances and personal digital gadgets.

In further demonstration of conflicting habits, 52% of the panel were repeat buyers of both Coca-Cola and Pepsi. By contrast, just 23% solely opted for Coke, with 25% for its major rival.

Equivalent trends could be observed in the toothpaste segment, where 36% of interviewees used Crest and Colgate. Exactly the same number proved loyal to Crest and 28% to Colgate.

This kind of behaviour was most pronounced regarding fast-food, as 63% of diners frequented McDonald's and KFC. However, only 9% always ate at McDonald's, jumping to 28% for KFC.

Equally, upon choosing a chocolate treat, 43% of customers flitted between several brands, versus 20% selecting their favourite. Another 31% weighed up brands and promotions, and 6% simply picked up the best deal.

Some 13% of contributors said emotional factors played a part in their decisions while buying chocolate, reaching 19% for mobile phones, totals that rose among affluent consumers.

Overall, 63% of shoppers stated brands was more important than price or purchase channel when acquiring a mobile handset, standing at 54% for chocolate, 50% concerning casual wear and 44% for facial moisturiser.

Data sourced from McKinsey; additional content by Warc staff