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Chinese consumers get more emotional

16 December, 2013

GroupM China

GroupM study shows how consumers are becoming more emotional in making brand choices

SHANGHAI — GroupM China’s most comprehensive market research on consumer behaviour in Tier 1 to 4 cities, Shan Hai Jin, revealed that emotional drivers are an increasingly important influence on Chinese consumers’ purchase decisions. Among the 22 product categories studied, including automobile, beverage, cosmetics, skincare, luxury, banking and electronics, emotional factors came first as a reason to buy for more than half of the categories.

“This research has forced us to re-evaluate our assumptions regarding consumer behaviour in different market tiers,” said Mark Patterson, CEO, GroupM Asia Pacific and Chairman, China. “Consumers’ attitudes and preferences don’t evolve in a perfectly linear fashion, and Tier 4 consumers are showing surprising similarities in some categories to their counterparts in Tier 1 markets.”

Chinese consumers are becoming more sophisticated, and understanding their consumption behaviour has to go beyond the standard tiers, geography, demographics and social groups. Especially important for brands in Tier 1 and 2 cities where market share is stagnating, emotions are often important drivers in building brand loyalty.
“Most brands in China have focused on getting distribution, but as e-commerce, malls and big retailers are getting more and more established throughout China, the battle will be about which brands the consumers perceive to hold the most value. In this context, it is essential for brands to understand the importance of building the emotional connection with their consumers,” commented Mark Patterson.

Shan Hai Jin 2013 research covered an extended scope of four Tier 1 cities, 28 provincial capital cities, 60 prefecture-level cities, and 184 county and county-level cities with 19,400 samples, an extension from only Tier 3 and 4 coverage in previous years since the study pioneered in 2007. The largest and most extensive project of its kind in China, the research covers various aspects including brand preferences, consumption behaviour, media habits and values of Chinese consumers in Tier 1 to Tier 4 cities.

In this research, Tier 1 cities cover urban centers like Shanghai, Beijing and Guangzhou; Tier 2 cities are provincial capital cities like Hangzhou, Nanjing and Hefei and some of them are also emerging economic centers like Chengdu, Hangzhou and Nanjing. Tier 3 cities are prefecture-level cities including Foshan in Guangdong, Wuhu in Anhui and Shiyan in Hubei, and Tier 4 is represented by incredibly fast growing county-level cities like Yuzhong in Gansu, Tianmen in Hubei and Helan in Ningxia. For most advertisers, “lower tier” markets represent the future of their business in China. While per capita GDP remains lower than places like Shanghai and Beijing, the economic growth in these markets continues to far outpace more developed east coast cities.

“The key findings on emotions as a purchase influence vary across product categories, product usage, demographics, geography and tiers. Marketers must develop a much more nuanced understanding of consumer attitudes and behaviours by market clusters and adapt their strategies accordingly to truly engage consumers effectively,” commented Mark Patterson.

For some topline findings from the research, download the press release.

About GroupM China
GroupM is WPP’s consolidated media investment management operation, serving as the parent company to agencies including Maxus, MEC, MediaCom, Mindshare and Xaxis.

GroupM is the global leading media investment management group.

GroupM invests in more than 560 markets across China, with an overall activity volume of USD 7.3 billion (RECMA: 2012 Definitive). As China’s number one media communications group, GroupM is the industry’s biggest investor in syndicated and proprietary media research and optimization tool development.

About GroupM Knowledge
GroupM Knowledge is GroupM’s think tank and knowledge management arm in China. This unit is responsible for industry-wide thought leadership research, exploring issues affecting the media industry in China; working with syndicated research suppliers, and managing the Group’s proprietary tools, research and systems. The unit also manages a media consultancy, advising clients with specific media research requirements.

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About Shan Hai Jin Research
Shan Hai Jin is GroupM’s proprietary consumer market research project, independently developed to identify and understand market trends, covering an extensive scope of Tier 1 to Tier 4 cities. The largest and most extensive project of its kind in China, it is an indispensable asset to brand owners in their market development in China.
The project is inspired by China’s oldest and most well-known geography book, The Shan Hai Jin, that records the geography, customs, people, cultures and religions of ancient China.

GroupM’s contemporary Shan Hai Jin deep-dives into the interaction between consumers and their external environment, providing an in-depth understanding of modern China for marketers and brand owners.

Media Contact
Swee Lynn Chong  
+86 21 2307 7701

Acrobat Document groupm_pressrelease_china_dec13.pdf

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