Loyalty higher in emerging markets

04 November 2011

NEW YORK: Consumers in markets like China and India are more loyal to brands than their counterparts in countries such as Australia and the US, a new study has revealed.

Colloquy, the research firm, polled 4,414 adults in Australia, Brazil, Canada, China, India, the US, and found participants displayed highly diverse habits and preferences.

According to the company, some 43% of Chinese shoppers "strongly agreed" that competition from foreign brands was beneficial, a total hitting 30% in Brazil and 28% among the Indian sample.

However, only 9% of the Americans surveyed adopted the same perspective, as did just 8% of Canadians and 6% of their Australian peers.

Elsewhere, 29% of contributors from the emerging markets assessed suggested "it pays" to remain loyal to their favourite brands, declining to 11% in the more mature economies featured in the analysis.

By contrast, an average 29% of the panels from Brazil, China and India thought rewards schemes were "extremely influential" on their purchases, falling to 14% for Australia, Canada and the US.

"We've entered into a period of great change and complexity," said Kelly Hlavinka, managing partner of Colloquy. "There is a vast loyalty opportunity to evolve how we engage customers in developed markets."

Roughly seven in 10 Chinese and Indian shoppers also relied heavily on word of mouth when buying goods in sectors from grocery and financial services to apparel and automotive, the highest scores here.

Indeed, spreading positive word of mouth came in the top two signs of perceived customer loyalty in all countries except China, where being "non-price conscious" and the length of a relationship with a retailer took the leading role.

Some 45% of consumers in developing nations had read or responded to reward programme offers on a mobile phone, standing at a modest 7% for the US, Australia and Canada.

These figures reached 35% and 7% respectively for swapping this kind of information with people on social networking sites, the study added.

Across all of the countries monitored, 32% of interviewees favoured reward schemes offering "special" treatment or benefits, with "aspirational" perks especially important in emerging markets.

Data sourced from Colloquy; additional content by Warc staff