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Chinese consumers are brand-obsessed when they do their shopping, though not in the way some might expect.
According to a new study by Bain & Company and Kantar Worldpanel, Chinese consumers are adventurous shoppers who are constantly trying out new brands and are rarely loyal to one.
The findings are likely to disappoint the marketing departments at major consumer product companies, the researchers say.
“There’s always been an expectation that the Chinese will become more loyal as the market becomes more mature and we’re saying ‘no’ to that,” said Bruno Lannes, a Shanghai-based partner for Bain and the lead writer of the report.
“This may be sobering news for brand managers. The reality is that consumers in China, like in other countries, don’t think of brands when they shop.”
The researchers studied the shopping habits of 40,000 Chinese households by arming them with scanners to track their purchases in real time. Twenty-six types of consumer products were tracked in beverage, packaged food, personal care and home care categories.
Chinese shoppers are most often engaged in what Mr. Lannes calls “repertoire behavior,” which means that they consider and buy several brands when shopping rather than sticking to one favorite. For example, the average Chinese household bought yogurt 16.2 times last year. But shoppers chose one of the leading three brands just 4.6, or 28%, of those times.
And the more they shop in a category, the study found, the more brands they’ll try. The 20% of Chinese shoppers who shopped the most for biscuits, for example, bought 10 different brands of treats, while the average shopper tried six.
“Chinese do love brands. It’s a reassurance for them. But even though they love them, in most categories, it doesn’t mean they love one in particular.”
Certain products do inspire loyalty, including beer, soft drinks and chewing gum. Diapers and infant formula are also categories where consumers will stick with one brand, partially because of recent scandals of tainted products, Mr. Lannes said.
But with such little brand loyalty among most categories, what are marketing executives supposed to do? Mr. Lannes advises to scrap the idea of creating loyal customers and focus more on attracting shoppers in stores so they take notice of a particular brand.
“There was an expectation that loyalty would increase,” he said. “But we don’t expect China to really evolve this way.”
