CEO, Kantar Marketplace, Greater China
Chief Product Officer
Insights Division, Kantar
Kantar is the world’s leading data, insights and consulting company. Combining our expertise in human understanding with advanced technologies, we help the world’s leading organisations succeed and grow.
Consumers seek new experiences and willingly pay premium prices
Brands have an opportunity to exceed expectations
Visitors who come to China expecting to see the historical sites are likely to be stuck by two uniquely modern scenes:
Couriers are everywhere, navigating heavy urban traffic on motorcycles, carrying packages for rapid delivery. Those in a yellow uniform are from Meituan (a lifestyle platform facilitating O2O onvenience), those in red and black are from JD.com (the e-commerce site), and those in blue are from Ele (the food delivery service owned by Alibaba).
Shopping malls are everywhere, but whether high-end or low-end, they are not primarily for shopping anymore. They have undergone tremendous changes in the past few years. The number of traditional stores has been drastically reduced. One third of mall space has been converted into restaurants. Another third is devoted to different kinds of education courses for kids. And there are many VR and 4D experience sites.
These two scenes epitomize how, with the rise of mobile internet, China has entered the era of “Experience is King.” Chinese consumers’ demand for “experience” has undergone several profound changes.
// HIGHER EXPECTATION FOR SPEED
Chinese consumers expect speed. In most of cities, daily necessities can arrive in 30 minutes after ordering by phone. Most IT and 3C products can be delivered the next day. Chinese consumers who have grown up in the mobile internet world also expect immediate feedback when they post a comment.
// LESS TOLERANCE FOR MISTAKES
Chinese consumers not only expect products and services to be delivered quickly, they expect transactions to happen flawlessly. Chinese consumers’ tolerance for bad experiences is declining. And most Chinese consumers don’t hesitate to post a negative online review. Online reviews have become one of most important purchase influencers for Chinese consumers.
// GREATER DESIRE FOR NEW EXPERIENCES
Chinese consumers desire new experiences, which has opened new opportunities for innovative brands. For example, because of China’s intense work ethic, leisure time and time spent with family is limited and valued. Many hotel brands have responded with special hospitality packages that include activities for children, sometimes featuring robotics.
// NEW TECHNOLOGIES RESHAPE EXPERIENCE
Consumers are embracing the technologies that enhance the mobile internet experience. For example, QR codes are the entry point for almost all internet services. On the train, a QR code containing seat information is pasted on each seat, and passengers can scan the code to order drinks and food. An attendant delivers the order. In most restaurants, consumers can order and pay by scanning QR codes.
Actions for brand success
These changes represent a significant opportunity for brands, as more and more Chinese consumers are willing to pay a premium for a positive experience. But, to achieve long-term, sustainable growth, brands need to understand changing expectations about experience, explore technological solutions for delivering innovative experiences, and deliver positive experiences consistently. Here are three recommendations:
- Take full responsibility
- Brands should listen to consumers’ feedbacks and act in real time. But brands must not only listen to comments about themselves, but also to comments about their brand partners. Consumers who have a bad experience with a product purchased on TikTok’s new commerce platform will not only complain about the product itself, but also about TikTok’s platform. Similarly, consumers will also complain about the brand when the delivery experience is poor, even the delivery is not provided by the brand itself.
- Be consistent
- Consistency of experience is a new way to establish brand differentiation. A positive experience at scale can build loyalty and drive a lot of repeat business. But the positive experience needs to be delivered consistently with all products and services. For example, all products from Xiaomi have the same surface texture. This consistent touch, a manufacturing efficiency, becomes part of the Xiaomi brand experience. The e-commerce brand JD.com offers seven-day return, no questions asked. JD.com consistently honors this promise, which has become one of its differentiators.
- Exceed expectations
Chinese consumers expect more. Providing extra services can be a happy surprise that creates extremely positive experiences. Haidilao, the hotpot restaurant brand, provides toys for kids eating in the restaurants. Great service has become a connotation of the Haidilao brand. The fruit retailer brand Pagoda builds loyalty by providing services such as free fruit washing, cutting, and packing.