Chinese shoppers rely on ads

27 November 2012

BEIJING: More than 60% of consumers in third and fourth tier markets across China look to advertising when choosing what products to buy, a survey has shown.

GroupM, the media arm of WPP Group, polled 10,000 people aged 15–45 years old from these cities, some 62% of which proved "less confident" about acquiring goods that were not advertised.

Over 66% of interviewees also stated that ads "swayed" their purchase decisions, and 51% searched for product information online after seeing a TV commercial.

In all, a fifth of contributors regularly shopped on the web, an audience which has expanded by 72% annually. The amount paid per transaction also rose from RMB1,838 in 2011 to RMB2,793 in 2012.

An additional 68% of respondents were willing to pay a premium for items they regarded as being of superior quality, indicating the importance of this area to manufacturers.

Fully 64% of shoppers were concerned that their brand choices would shape how other people viewed them, and 56% preferred buying well-known foreign lines to local alternatives for this reason.

Similarly, a 45% share of the sample sought to "differentiate themselves" with clothes, handbags and shoes, and 44% afforded the same status to watches.

More broadly, average monthly salaries amongst the panel stood at RMB5,961, up from 5,062 in 2011 and 3,172 in 2009. Typical household income rates had thus grown by 88% in the last three years.

In contrast, earnings had grown by 57% in upper tier markets in this period. As such, monthly pay packets in these cities had increased from RMB5,635 in 2009 to RMB8,337 in 2011 and RMB8,836 in 2012.

Participants in the 35–44 year old audience in third and fourth tier outlets registered the strongest surge in wages, up by 95%, whereas their peers in bigger cities posted a 64% uptick on this metric.

"Contrary to what is popular perception, the disposable incomes of lower-tier consumers are not lower than those in upper-tiers. They have the money and time to pursue a better quality of life," said Eve Lo, GroupM China's chief knowledge officer.

"Meanwhile, they are more confident about future macro-economic developments than upper-tier consumers. Brands have to realize this fast and have tailor-made products, services as well as communication platforms."

At the regional level, salaries in southwest China come in at RMB6,499 per month, a 128% increase in three years, and closing the gap on eastern parts of the country, where these earnings reach RMB6,837.

Data sourced from GroupM; additional content by Warc staff