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1、2023 Global Consumer Insights Survey China reportSeizing the Moment:Is your brand strategy ready for Chinas consumption recovery?Contents2023 Global Consumer Insights Survey China report1Foreword2Insights in a snapshot4Exploring the four key aspects of change5Economy61.Chinas economic normalisation
2、and what it means for the consumer market 7Technology172.Harnessing the power of generative AI for retailers and brands 183.Moving beyond the hype of the Metaverse evolution 21Experience234.Pursuit of frictionless consumer experience 245.Exploring supply chain innovations to address customer pain po
3、ints 33Brands356.Brands are charting new growth paths to leverage the normalisation effect367.The ESG price premium gives rise to sustainability as business differentiator44Conclusion and recommendations48About the survey50References51Contact us and Acknowledgements52ForewordEven before the end of C
4、ovid-19 pandemic,the daily routines of Chinese consumers from bustling cities to rural villages had been undergoing constant changes.As China emerges from the pandemic with a refocus on economic recovery,changes are likely to accelerate for the typical Chinese consumer,as they face transformation in
5、 their consumption patterns and habits,from the rise of generative AI,revenge travelling,and changing attitudes towards health,wellness,and sustainability.As we navigate through the course of 2023,both consumers and brands are grappling with powerful internal and external sources of frictions that c
6、an disrupt commerce and undermine customer satisfaction.In fact,67%of CEOs based in the Chinese mainland and Hong Kong believe their business will no longer be economically viable after a decade if they stay on the current path,citing multi-faceted factors impacting profitability,ranging from changi
7、ng customer demand/preferences,supply chain reconfiguration,and technology disrupters.iIt is against the backdrop of a rapidly evolving reality facing Chinese consumers that we launch this years issue of Global Consumer Insights Survey China report.Our study has revealed a number of new trends that
8、are reshaping the frontier of the consumer market.First,the advent of large language models,and their many applications in business,has brought much excitement to retailers,revolutionisingthe way they interact with customers,showcase products,and manage their operations.Our survey suggests that,as c
9、onsumers strive for frictionless experiences,they are venturing beyond conventional e-commerce and technology-mediated physical experiences and exploring next-generation digital platforms,including generative AI,Web 3,and the constantly evolving metaverse.Chinas economic normalisationalso presents a
10、 good timing for foreign brands to establish local presence,and for domestic brands to diversify outside of China leveraging cross-border ecommerce.With greater brand mobility and the eagerness of Chinese consumers to resume their pre-pandemic routines,including in-store shopping and travel,competit
11、ion is becoming more intense and revolves around brands ability to deliver superior customer experience and manage various points of friction along the purchase journey,both online and offline.2023 Global Consumer Insights Survey China report22023 Global Consumer Insights Survey China report3Meanwhi
12、le,with the growing digitisation of everyday work and leisure activities,data security and privacy concerns are emerging as a critical source of friction for consumers.Recent changes in data privacy regulations have garnered significant attention from retailers who are keen to explore how they can b
13、uild trust and remove consumer frictions through the ethical use of data.Among trends that continue to reinforce after the pandemic,Chinese consumers continue to feel the pinch of financial uncertainty,underscored by less than optimistic job prospect,and as such are tightening their belts to rebalan
14、ce spending across different categories.A majority of surveyed consumers plan to adopt some form of cost-saving behaviour over the next six months.Luxury spending in China remains intact despite lower net increase compared to other categories,with more purpose-led purchases motivated by the feel-goo
15、d factor,the desire to keep up with the trend,and as a store of value or investment.Sustainable living and eco-friendly products continue to demand higher price premium despite a more cautious spending pattern.The source-local trend gains further traction as retailers seek to shorten and proliferate
16、 their supply chains to reduce disruptions amid geo-economics.As consumers change and adapt,retailers must do the same to stay relevant and competitive.In a market that is subject to continuous volatility,retailers will likely find themselves in a completely new race one that requires the balancing
17、act of ensuring business viability today,while giving full play to long-term priorities that help drive sustainable growth for tomorrow.They must leverage a diverse strategy toolbox to ensure that they are on track for sustainable growth in this new era.We invite you to peruse our report for a compr
18、ehensive overview of our China-specific findings and how they can help brands and retailers navigate the next phase of retail evolution.By tapping into these insights,we are hoping to empower brands to seize the moment with confidence and refine their brand strategy for the post-pandemic new normal,
19、capitalising on Chinas consumption recovery and carving out new paths towards sustainable growth and success.Michael ChengPwC Asia Pacific,Mainland China and Hong Kong Consumer Markets LeaderNew trends in focus:Generative AI opens up a blue ocean for digital-ready retailersBuilding digital trust thr
20、ough better management of data privacyForeign brands are exploring new opportunities amid Chinas economic normalisationRevitalisationof previously restrained sectors,as seen in the surge of revenge travel and cultural activitiesExisting trends that are receding:Impulsive purchases reverted to ration
21、al consumption behaviours amid uncertain outlookSupply chain disruptions showed sign of easing with reopening and production resumption At-home economy and hybrid working gave way to physical and scenario-based consumptionTrends that are here to stay:Love for luxury continues but with more targeted
22、spendingDomestic brands accelerate pace of growth on source-local trend and cross-border ecommerce Sustainable living and eco-friendly products continue to demand higher price premiumVarious points of friction still persist to impact the delivery of customer experience 2023 Global Consumer Insights
23、Survey China report4Insights in a snapshotSuccessful brands and retailers will be those who can:Unlock the power of brand story-tellingTranscend non-price attributes across bordersReduce the price-experience gap to foster brand loyaltyCreate path of least resistance to deal with various frictionsBal
24、ance cost and benefits beyond technology hypes2023 Global Consumer Insights Survey China report5Economy1.Chinas economic normalisation and what it means for the consumer market Exploring the four key aspects of change Technology2.Harnessing the power of generative AI for retailers and brands3.Moving
25、 beyond the hype of the Metaverse evolution Experience4.Pursuit of frictionless consumer experience 5.Exploring supply chain innovations to address customer pain points Brands6.Brands are charting new growth paths to leverage the normalisation effect7.The ESG price premium gives rise to sustainabili
26、ty as business differentiator 2023 Global Consumer Insights Survey China report6Economy0-0.500.511.522.53Jan-21FebMarAprMayJunJulAugSepOctNovDecJan-22FebMarAprMayJunJulAugSepOctNovDecJan-23FebMarAprMayJun1.Chinas economic normalisation and what it means for the consumer market A market overview and
27、policy watch From a macroeconomic standpoint,the Chinese economy has exhibited a positive momentum of recovery,as evidenced by a 5.5%GDP growth rate in H1 2023,exceeding the governments full-year growth target of 5%for 2023.However,the youth unemployment rate reached a new high of 21.3%in June,which
28、 may further undermine consumer confidence.Consumer Price Index(CPI)had been on a downtrend since January 2023 and is expected to remain stagnant in Q3,heightening the potential risk of deflation.Consequently,financial institutions are adjusting their projection for Chinas GDP growth in 2023 to 5%,d
29、own from the earlier average estimate of 5.5%in April,as recent economic data reveals a deceleration in economic momentum due to weak demand.Figure 2:Chinas unemployment rate from 2021 to 2023(%)Figure 1:Chinas CPI from 2021 to 2023(YoY%)5.221.30510152025Jan-21FebMarAprMayJunJulAugSepOctNovDecJan-22
30、FebMarAprMayJunJulAugSepOctNovDecJan-23FebMarAprMayJunChina urban unemployment rate(%)Unemployment rate for the aged between 16 and 24(%)Source:National Bureau of Statistics of ChinaSource:National Bureau of Statistics of China2023 Global Consumer Insights Survey China report72023 Global Consumer In
31、sights Survey China report8During the first half of the year,Chinas retail market staged a gradual recovery,with total retail sales of consumer goodsincreasing by 8.2%year-on-year to reach RMB22.8 trillion,although monthly retail sales experienced a slowdown in June 2023,compared to a 12.7%increase
32、in May.Despite concerns over the strength and duration of economic recovery,the countrys retail sector is largely stable with final consumption expenditure contributing over 77%of economic growth.6.7%-3.5%-11.1%-6.7%3.1%2.7%5.4%2.5%-0.5%-5.9%-1.8%3.5%10.6%18.4%12.7%3.1%-15%-10%-5%0%5%10%15%20%012345
33、6789Jan&Feb2022Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan&Feb2023Mar-23Apr-23May-23Jun-23China retail sales(RMB trillion)China retail sales growth(YoY%)(nominal)RMB trillionYoY%Figure 4:2022-2023 China monthly retail salesFigure 3:China retail sales and growth from 2021 to 20234
34、4.143.922.810.812.06.1-2%0%2%4%6%8%10%12%14%05540455020212022H1 2023Total retail sales(RMB trillion)Online retail sales of physical goods(RMB trillion)Total retail sales growth(YoY%)Online retail sales of physical goods growth(YoY%)YoY%RMB TrillionSource:National Bureau of Statistics of C
35、hinaSource:National Bureau of Statistics of China2023 Global Consumer Insights Survey China report9-9.9%3.6%4.5%1.2%6.6%5.4%-2.2%-1.1%-2.2%9.6%4.8%6.6%6.9%7.8%16.1%-3.9%1.0%1.0%3.8%4.1%4.8%5.0%6.8%7.5%8.6%8.6%11.1%12.8%17.5%21.4%Jan-Jun 2023(YoY%)Jun 2023(YoY%)Figure 5:China retail sales by selected
36、 categories in Jun and the first half of 2023(YoY%)Catering servicesGold,silver and jewelleryGarment,footwear,hats,knitwearTraditional Chinese and western medicinesCosmeticsTobacco and liquorPetroleum and related productsAutomobileCommoditiesGrain,oil,foodstuffCommunication appliancesFurnitureHouseh
37、old appliances and AV equipmentBeveragesCultural and office appliancesSource:National Bureau of Statistics of ChinaThe retail sales picture suggested that consumption recovery in the first half of 2023 was mainly driven by catering services,luxury,and apparel and footwear.Sales of upgraded goods the
38、 second best-selling category after catering services grew rapidly,with retail sales of gold,silver,and jewellery increasing by 17.5%and cosmetics by 8.6%in H1 2023.It is noteworthy that petroleum and related products,automobile,commodities,cultural and office appliances,were the four categories exp
39、eriencing a setback in sales on a monthly basis in June.2023 Global Consumer Insights Survey China report10Rational consumption behaviour driven by uncertain economic outlookIn light of the current economic situation,Chinese consumers concern around the rising cost of living in relation to their per
40、sonal financial situation is evident,with 67%of surveyed respondents(Global:86%)expressing such concerns.Figure 6:Considering the current economic climate and potential cost of living impact,how concerned are you about your personal financial situation?6%21%40%26%7%22%29%35%12%3%Extremely concernedV
41、ery concernedSomewhat concernedNot very concernedNot at all concernedChinaGlobalSource:Global Consumer Insights Survey 20238%51%29%7%5%15%53%20%9%2%ChinaGlobal2023 Global Consumer Insights Survey China report11Although the degree of financial concern felt by Chinese consumers is less acute than thei
42、r global counterparts,it is already weighing on the expenditure on non-essential items,with 51%said they are(Global:53%)holding back on non-essential spending considering the current economic climate.It is clear that personal finance now plays a bigger role in influencing consumer decisions and the
43、likelihood of people engaging in cost-saving shopping behaviours.For more essential items or services,however,Chinese consumers are not trading down,but they are getting much smarter about what they buy and where.They are very creative at finding the cheapest way to buy the brand they want,whether i
44、ts through WeChat groups,parallel imports,or the latest livestreaming deal.Without compromising on the brand and product they desire,they are making more rigorous trade-off decisions and more actively seeking discounts and promotions.Figure 7:Considering the current economic climate,which of the fol
45、lowing statements best describes your situation regardingnon-essential spending?By this we mean spending after paying for essentials such as food,clothing,utilities,mortgages,taxesetc.One of the most significant changes in consumer behaviour has been a shift towards more pragmatic and rational decis
46、ion-making.This is due to a combination of factors,including reduced consumption needs amid the prior lockdowns and restrictions,increased economic pressures on households,and general uncertainty about the future.As a result,consumers are less likely to make impulse purchases and are focusing more o
47、n product quality and value,as well as taking advantage of promotions and comparing prices across different sellers.I have stopped all non-essential spendingI am holding back on non-essential spending(and plan to do so in the coming months)I have not made any changes to my non-essential spendingI am
48、 continuing to spend what I want when I wantI have not given any consideration to my non-essential spendingSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report12With rational consumption back in fashion,Chinese consumers have joined the global trend of online
49、subscription cancellation,particularly impacting the revenue of media and content streaming companies.44%of our surveyed consumers(Global:39%)cited a lack of need for continuation as the primary reason for cancelling their subscriptions,while other reasons included unexpected or increasing fees,conc
50、erns over contract ties,and the perceived high cost of subscriptions.Another notable trend is the increasing skepticism of recommendations and a preference for doing independent research.With the abundance of information available online,consumers are more likely to seek out reviews and feedback fro
51、m other customers,as well as compare prices and features across different products and brands.This has challenged the traditional marketing strategies of companies,which have relied heavily on influencer and celebrity endorsements,and has made it harder for brands to stand out from the competition.F
52、igure 8:You have indicated that you have cancelled a subscription in the past.Which of the following best describes your reason(s)for deciding to cancel?I no longer had a need for this subscriptionI was unable to customise subscriptions(e.g.frequency,size of order,contents)There were unexpected/incr
53、easing feesProduct quality was inconsistentDeliveries were not reliableI didnt like to be tied into a contractIt didnt suit my lifestyleToo expensive39%26%25%22%25%31%23%39%21%24%24%20%25%27%20%44%ChinaGlobalSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report
54、13Consumer mobility improves with cultural activities in full swingChinese consumers showed enthusiasm for both domestic and outbound travel.To a much greater extent than their global counterparts,62%of Chinese consumers expected they would increase spend on travel.More than 50%of Chinese consumers
55、anticipated they are likely or extremely likely to travel on an international flight in the next six months.Figure 9:Thinking about your spending over the next 6 months,to the best of your ability,please describe your expectations on spend for travel-related activities.57%Extremely likelyLikelyChina
56、Global41%16%32%15%51%ChinaGlobal35%16%28%16%Travel on a domestic flightTravel on an international flight26%25%15%22%36%26%ChinaGlobalExpect a significant increase in spendExpect a slight increase in spendNo change(I will spend the same)Figure 10:In the next 6 months,how likely are you to.44%47%Sourc
57、e:Global Consumer Insights Survey 2023Source:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report14Chinas May Day holiday in 2023 shows recovery of tourist confidence.The total number of domestic trips during the holiday was 274 million,up about 71%year-on-year and 1
58、19%over the same period in 2019,generating 148 billion yuan in tourism revenue,up 129%year-on-year,and doubling over the same period in 2019.iiAs the countrys biggest duty-free zone,Hainan has experienced a significant boost in inbound tourism.Changes in the pricing strategies of selected luxury bra
59、nds and the strengthening Hong Kongs currency against the renminbi in the previous year have eroded the citys price advantage for certain high-end goods,thereby redirecting some potential shoppers to Hainan.As a result,Hainans duty-free goods sector has witnessed a surge in the number of shoppers an
60、d sales,achieving a historic high during the first quarter.Outbound travel also recorded a significant increase,despite international flight capacity yet returning to pre-pandemic levels.As per Tuniu,a prominent Chinese online travel agency,approximately 30%of users who travelled abroad visited Hong
61、 Kong and Macau,while other popular destinations included the Maldives,Singapore,Thailand,and the United Arab Emirates.iiiThe recovery of tourist and cultural activities presents a major opportunity for the tourism,hospitality and retail sectors.The surge in the number of domestic trips,tourism reve
62、nue,and consumer spending on travel indicates that Chinese consumers are eager to resume their pre-pandemic travel and leisure activities.Retailers can leverage this trend by developing targeted marketing campaigns and offering attractive discounts and promotions to entice customers to purchase trav
63、el-related products and services.Additionally,they can focus on enhancing their online presence and e-commerce capabilities to cater to the growing number of consumers who prefer to book travel,cultural performances,and purchase related products online.2023 Global Consumer Insights Survey China repo
64、rt15In sum,for many businesses,Chinas normalisation marks a positive sign for previously impacted sectors.Commercial activities start to improve along with relaxed social distancing measures,coupled with the removal of mask mandates and faster pace in institutional opening-up and consumption upgradi
65、ng.The convergence of a robust middle class,low inflation,and restrained spending resulted in the accumulation of significant savings,which consumers are ready to spend once again when they become more confident about the economy and their personal finance.At the same time,the Chinese government has
66、 rolled out successive measures to revive theeconomy,including support for household consumption,issuance of special bonds to fund targeted projects,and stabilising measures for various sectors such as banking,technology,and real estate.iv Over the longer term,retailers need to be mindful of and res
67、ponsive to the impacts of recent policy levers in the following five key areas in order to stay competitive and take advantage of the countrys economic normalisation.Domestic consumption with targeted upgrading will be in focus:China launched a new round of nationwide car purchase campaigns in a maj
68、or push to shore up demand and began easing monetary policy to support the economy.On 13 Jun,2023,Peoples Bank of China lowered the interest rate for the first time in 10 months in a bid to restore market confidence and boost growth amid downward pressure.More stimulus is expected to come as the cou
69、ntry is mulling a broad package of stimulus measures to boost slowing economy.Household savings set to unleash on policy support to boost income growth:The Two Sessions in March 2023 confirmed a raft of policies aimed at stimulating demand and unlocking consumer savings.Meanwhile,policy reforms such
70、 as lifting the retirement age to expand the labourforce,strengthening employment,and reinforcing health insurance and benefits,should enhance household income over time.Securing income growth and improving consumer confidence remain key policy priorities for delivering a more sustainable consumptio
71、n recovery.2023 Global Consumer Insights Survey China report16Geopolitical tensions exert pressure on industrial supply chain affecting prices and availability.The persistent tension in the China-US trade relation underscores the importance of supply chain diversification.The combined impact of tari
72、ffs,the Covid-19 pandemic,and other challenges has prompted retailers to seek opportunities to diversify their sourcing and establish resilient supply chains that can adapt to changing market conditions and meet consumer demands.More stringent dataand consumer protectionlaws altering the game:The dy
73、namic landscape of Chinas Personal Information Protection Law(PIPL)highlights the need for marketers and brands to adopt first-party data strategies that comply with evolving regulations to safeguard consumer data.The introduction of the Standard Contract Measures on June 1,2023 has further clarifie
74、d regulations for businesses engaging in cross-border transfers of personal information.With PIPL in place,Chinese consumers are now better protected against big tech and digital marketing by allowing them to reject automated decisions and preventing personal information handlers from using data min
75、ing to offer different prices to different consumers.Supply chain disruptions due to geo-economic fragmentation:Chinas population in 2022 shrank for the first time in 40 years as demographic shifts and reduced childbirth continue to alter spending patterns.At the same time,China has been taking stea
76、dy measures to improve basic elderly care services to provide a cushion for one of its most vulnerable groups in order to cope with the countrys ageing society,with around 280 million people aged 60 and above as of the end of 2022.Demographic shifts accelerating the change in demand patterns:2023 Gl
77、obal Consumer Insights Survey China report17Technology2023 Global Consumer Insights Survey China report182.Harnessing the power of generative AI for retailers and brands ChatGPT,along with other variations of generative AI,has taken the world by storm since its debut last November and revolutionised
78、 many industries due to its advanced conversational capabilities.Chinese tech companies are already scrambling to roll out ChatGPT-like AI chatbots or products.After Baidus Ernie Bot,Alibabas version of ChatGPT has also been released,named Tongyi Qianwen,which is currently in the internal testing ph
79、ase and will be eventually added to all Alibaba applications,from e-commerce to mapping services.vThe application of advanced chatbot technology is ever-increasing for the consumer market.When asked about what functions of a chatbot are most appealing to them,Chinese consumers are interested in usin
80、g various functions of a chatbot,including searching for product information(46%;Global:44%),personalising offers(40%;Global:31%),sending alerts and updates about products(39%;Global:34%),as well as enhancing customer services and support(30%;Global:35%).46%39%30%40%32%22%44%34%35%31%30%25%ChinaGlob
81、al2023 Global Consumer Insights Survey China report18Searching for product information before I purchase(e.g.product details,recommendations,comparisons)Sending alerts and updates to me about(e.g.product deliveries,products coming back in stock)Customer service support from a retailer or brand I use
82、To customise offerings to me(municating my preferences and having products recommended to me)To support with work/studies(e.g.producing first draft of a written document)To create email or other communications in written form for meFigure 11:Recently there have been major increases in the capabiliti
83、es of what chatbots can do.Which,if any,of the following functions of a chatbot would you be interested in using?Source:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report19Generative AI use cases in customer servicesAllow customers to self-serve on common issues an
84、d questions with a conversational interface,freeing support staff to focus on more complex issuesUnderstand customer sentiment through their interactions and feedback to identify potential issues to prevent escalation and reduce churnPersonalise email responses to customer queries with capabilities
85、that understand the context of the customers email and prepare a tailored responseHandle routine queries and tasks,provide 24/7 support to customers,and reduce the workload of human agentsAnalyse customer data to generate tailored content,such as product recommendations,marketing messages,and suppor
86、t responsesAnalyse customer data to make personalised product recommendations based on customer interactions and usage dataPersonalisedsupportProduct recommendationsVirtual assistantSentimentanalysisEmailresponsesCustomerself-servicesThere are numerous ways brands can harness the power of generative
87、 AI.For example,AIGC-powered systems have the potential to revolutionise customer service,which until now,has been a pain point for B2C brands trying to improve service quality and reduce costs in their external communication channels.The wide applications of AIGC not only allow retailers to streaml
88、ine high-frequent and repetitive tasks for better cost control,it also enables innovate use cases in private domain operations such as virtual KOC live streaming,create personalized content and product recommendations,enhance customer responsiveness through intelligent chatbots,or perform sentiment
89、analysis to better handle customer complaints.Source:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report20Interactivity is perhaps one of the most imaginative aspects of AIGC technology.Combined with AI intelligent text,audio and imaging technology,AIGC makes it pos
90、sible to create real-time interaction between characters in the video and users,and even the creative use of virtual KOCs to sell products via live streaming.In response to rapid development of AIGC,the Cyberspace Administration of China(CAC)released the Measures for the Administration of Generative
91、 AI Services(Draft for Public Comments)in April 2023 to solicit public opinion.The Draft,consisting of 21 articles,addresses the regulatory principles and specific requirements pertaining to AIGC products and services.It is anticipated that the new regulations will draw a line for the healthy growth
92、 of the industry,and AIGC providers will need to exercise caution on generated content from multiple perspectives such as use of algorithms,training data requirements,data privacy,IP protection,and so on.Key considerations for retailers to adopt Generative AIPilot animpactful use caseRevamp cyber,da
93、ta and privacy protectionsEquip stakeholders for responsible use and oversightSet risk-based prioritiesPilot an impactful use case 3.Moving beyond the hype of the Metaverse evolution The Metaverse wave has permeated in China over the past two years,and despite its popularity cooling off in recent mo
94、nths,has brought about a host of exciting business opportunities.Leading tech giants such as ByteDance,Tencent,and Baidu are experimenting with metaverse-style applications,trademarking metaverse-related terms,and investing in the VR/AR industry.Our study indicates that,for many Chinese consumers,me
95、taverse-related activities are still in the experimentative or early adoption phase,although they are found to be more aware of and actively engaged in the Metaverse,compared to their global counterparts.Only 8%of Chinese respondents(Global:12%)said they have never heard of or not familiar with virt
96、ual reality.16%of Chinese consumers said they have used a virtual reality headset for entertainment in the last 6 months,12%interacted with customer services agents virtually,11%have purchased digital products or NFTs.Other commonly cited metaverse activities include accessing virtual online healthc
97、are,interacting with brands,joining a virtual world,as well as purchasing products as a result of testing or browsing them via metaverse platforms.Meanwhile,luxury brands such as Burberry,Louis Vuitton,Balenciaga,and Gucci have been at the forefront of shaping the future of the fashion industry.Thes
98、e brands are exploring the potential of the metaverse to create novel revenue streams and offer immersive customer experiences.On the other hand,Maxims Group has introduced a mobile gaming app named eatie that operates on Web3 technology,the first of its kind in Hong Kong that combines food and gami
99、ng themes,allowing customers to earn points and rewards in the real world by playing virtual games.Figure 12:In the last 6 months,which of the following metaverse-related activities have you participated in?I have heard of the metaverse but I have never used itInteracted with brands I already know,w
100、ho are providing offers/exclusive contentAccessed virtual online healthcare-interacted virtually with health services providers e.g.doctors,nurses,therapistsI have never heard of/I am not familiar with the metaverseJoined a virtual world e.g.to experience a retail environment,a concert etc.Used a vi
101、rtual reality(VR)headset e.g.to play games or watch a movie/TV show or for work-related activitiesPurchased products as a result of testing them/browsing stores via metaverse platformsPurchased digital products/non-fungible tokens(NFTs)e.g.avatars,digital artwork,digital real estatePurchased physica
102、l luxury goods by viewing them digitally firstI have heard of the metaverse but I have not used it in the last 6 monthsInteracted with customer services agents virtually plaints,products and services questions,order status,etc.29%10%11%8%10%16%8%11%9%23%12%32%9%9%12%8%11%8%8%7%22%10%ChinaGlobal2023
103、Global Consumer Insights Survey China report21Source:Global Consumer Insights Survey 2023Figure 13:Which of the following best describes your personal preference when it comes to technology?26%25%29%18%2%19%29%30%19%4%ChinaGlobalGiven a higher degree of market awareness,the consumer metaverse in Chi
104、na is set to become a new battle ground for brands to compete for eyeballs and virtual world spending.PwC predicted the metaverse economy as the next frontier,projected to grow to US$1.5 trillion in 2030,mainly driven by web3 and AR/VR technologies.It is likely to incrementally reshape the strategie
105、s and physical operations of retailers to enhance omnichannel experience.Retailers should consider the following factors to make such experience more accessible to customers:CompatibilityEnsure that the Metaverse platform used is compatible with a range of devices,from high-end VR headsets to smartp
106、hones and laptops.Accessibility featuresIncorporate accessibility features,such as text-to-speech and captioning,to accommodate customers with visual and hearing impairments.User-friendly interfaceMake sure that the Metaverse experience is easy to navigate,intuitive,and user-friendly,to appeal to cu
107、stomers who may not be tech-savvy.Bandwidth requirementsKeep in mind that some customers may have limited internet bandwidth,so the Metaverse experience should be designed to work on slower internet connections.InclusivityEnsure that the Metaverse experience is inclusive and culturally sensitive,to
108、avoid alienating any groups of customers.I like to buy the latest technology that is right at the cutting edge as soon as it is availableI may not be the first but I like to own/try out the latest technology before most peopleI tend to buy or try out the latest technology when it becomes more widely
109、 usedIm not that interested in the latest technology and tend to only buy it when I need itIm not that interested in the latest technology and try to have the least amount of technology in my life222023 Global Consumer Insights Survey China reportLooking closer at consumer preferences when it comes
110、to technology innovations,26%of Chinese consumers(Global:19%)said they like to buy the latest technology that is right at the cutting edge as soon as it is available,as opposed to 29%(Global:30%)who prefer to wait till such technology becomes more widely used.Source:Global Consumer Insights Survey 2
111、0232023 Global Consumer Insights Survey China report23ExperienceWith Chinese consumers resorting to more cautious spending in view of a tougher financial outlook,providing a seamless and frictionless customer experience has become an important non-price differentiator in helping retailers to attract
112、 and retain customers.A frictionless customer journey refers to a seamless and effortless interaction between the customer and the retailer,where every touchpoint from browsing and researching,channel of purchase,to delivery and customer support is designed to provide maximum convenience and ease of
113、 use.It is important for retailers to identify the key sources of friction along the consumption journey if they are to win customer loyalty and drive repeat business.It comes down to closing the expectation gaps in five areas,that is digital trust,pre-purchase research,convenience at points of purc
114、hase,product authenticity,and post-purchase cognitive dissonance.2023 Global Consumer Insights Survey China report244.Pursuit of frictionless consumer experience2023 Global Consumer Insights Survey China report25Mitigating consumer concern over data privacy Figure 14:To what extent,if at all,are you
115、 concerned about the privacy of your personal data when interacting with the following types of companies?Consumers are seeking less friction but that doesnt necessarily mean opting only for e-commerce,or for physical experiences that are entirely mediated by technology.Theyre continuing to experime
116、nt with the next generation of digital platforms.And as more of everyday work and leisure life continues to go digital,mobile and virtual,concerns about data security and privacy have emerged as a significant source of friction.When asked about the extent of concern over the use of personal data whi
117、le interacting with a range of companies,33%of Chinese consumers are extremely or very concerned about sharing their personal data with social media companies,while 22%said the same about consumer companies.In response to this,retailers can take proactive measures to mitigate concerns and safeguard
118、their customers personal information.This can involve implementing robust data security measures,such as encryption and secure payment gateways,to protect against cyber threats.Retailers can also prioritise transparency by clearly communicating their data collection,usage,and sharing policies,and pr
119、oviding customers with clear options to manage their data,let alone offering opt-in programs that allow customers to voluntarily provide their data in exchange for personalised recommendations or other benefits.Social media websitesConsumer companies33%Extremely concernedVery concernedChinaGlobal46%
120、23%10%24%22%22%ChinaGlobal30%15%7%18%12%Source:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report26Clearly with the introduction of PIPL in recent years and subsequent policy updates,Chinese retailers are scrambling to ensure compliance with the new regulations by
121、adopting new approaches to protect their customers personal information,especially when violations can be as hefty as 5%of annual company revenue.We summarise some of the challenges and opportunities for retailers as they navigate the new regulatory landscape.Extraterritorial applicability Internati
122、onal companies located outside China and have collected or intended to collect PI from China should assess how they shouldtake compliance steps with China data lawGet personal consent®ulate automated decisions Big data analysis for personal behaviours,pricing etc.,must ensure legality,transparenc
123、y,security and fairness Proper rules should be implemented for automated decision-makingCross-border data transferCross-border data transfer must use mechanisms set out in the law,including:Obtaining certification of cross-border personal information transfer1)Passing security assessment 2)Entering
124、into standard contract prepared by Chinese regulatorChallenges Notes:1)certified by a professional institution;2)organisedby the national cyberspace authoritySource:PwC PIPL analysis Private domain and membership system managementBrands can build long-term trust and relationship with consumers to Ob
125、tain user-authorised personal information Provide membership benefits and avoid the big data-enabled price discrimination and misleading in marketingOptimise internal data management to avoid risks Organise implementation of compliance and rectification plan Determine the operation authority level b
126、ased on information sensitivity Apply security technical measures such as encryption and de-identificationEnhance digital asset management capabilities Develop advanced algorithm to manage data as digital asset to maximise data utilisationOpportunities 2023 Global Consumer Insights Survey China repo
127、rt27Removing informational friction58%of Chinese consumers are inclined towards using e-commerce channels,such as Taobao or Tmall,to typically research the items or products they intend to buy,followed by social media platforms such as Xiaohongshu and TikTok(43%),customer reviews(32%),and search eng
128、ines(31%).Although this is a common phenomenon given the immense popularity and convenience of online platforms,for brands,this might imply an over-reliance on third-party channels for promoting and marketing their products as only 28%of respondents typically research their products on brand website
129、s,five percentage points lower than the global average.Brands will have to work harder to regain control over the first checkpointin the consumer journey”to drive engagement on their own websites and ensure a more direct and impactful brand-consumer relationship.Figure 15:In general,where do you typ
130、ically research the items/products that you intend to buy?27%29%Price comparison website27%30%Speaking to other people(e.g.,friends,family,colleagues)43%31%Social media(e.g.,Facebook,Xiaohongshu,TikTok)58%36%Online shopping platforms(e.g.,Amazon,Taobao,JD)31%55%Search engine(e.g.,Google,Baidu)13%18%
131、Websites/apps that sell resale,upcycled or previously used28%33%Brand websites9%4%Chatbots32%31%Customer reviews on retailerwebsites2%2%None of the aboveChinaGlobalSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report28Retailers across the country are cashing i
132、n on automation to reduce time friction and improve the customer experience,as evidenced by the wide availability of self-checkout tills.Chinese consumers said a greater variety of payment options available(58%),advanced touch screen technology(50%),and clear instructions(45%)would encourage them to
133、 use self-checkout more often in physical stores.Reducing time friction with automation Faster and more responsive touch screen technologyMore space at the checkout for my basket/trolleyStaff being more readily available for check out queries/issuesA faster approval process for buying restricted ite
134、ms(e.g.alcohol,medicine etc.)Clearer instructions for how to useA greater variety of payment options availableAbility for me to purchase the product in the aisle/at the shelf in the storeMore self-checkout tills availableFigure 16:Thinking about a time when you have used a self-checkout in a physica
135、l store,which,if any,of the following would encourage you to use them more often?50%33%34%29%45%58%31%43%44%33%40%29%32%41%29%42%ChinaGlobalSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report2973%Yes-I have purchased products directly22%I have not purchased p
136、roducts directly but I have considered/would be open to purchasing directly5%No-I have not purchased products directly and I have no interest/need toChinaOne salient finding from our survey is that consumers are progressively bypassing conventional intermediaries and marketplaces in favour of purcha
137、sing directly from brands.A majority of consumers(73%)have attested to making purchases directly from a brands website,and we anticipate that figure to escalate.An additional 22%have conveyed that despite not having done so yet,they are contemplating the direct-to-consumer(DTC)option.Among those hav
138、e purchased products directly from brands website,product authenticity(62%),more choices(43%),better service and delivery time(39%),as well as competitive prices(37%)are cited as the key motivators.Electronics is the largest category Chinese consumers brought via DTC means,followed by clothing and a
139、ccessories,and beauty and personal care products.Circumventing the authenticity barrier Figure 18:Which,if any,of the following product categories have you purchased or would consider purchasing directly from the brands website?ChinaGlobalHave purchased directly.Would consider purchasing directly.Wo
140、uld not consider/have no interest in purchasing directly.18%5%7%12%12%60%55%56%52%56%28%34%37%43%25%20%11%11%17%17%55%48%45%49%45%28%35%44%40%35%Clothing and accessoriesBeauty and personal careHome furnishingElectronicsFood and beverageFigure 17:Thinking of products that you buy,have you ever purcha
141、sed or considered purchasing them directly from the brands website?Source:Global Consumer Insights Survey 2023Source:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report30Figure 19:What are the main reasons why you have purchased or would consider purchasing products
142、 directly from the brands website?Brands would be wise to leverage DTC trends.By utilisingappropriate marketing tools and technologies,they can establish a greater frequency of connection with the end consumer,circumventing the need for retail partners.In fact,those capable of maintaining sophistica
143、ted e-commerce channels and optimisingdigital marketing technology have augmented control over customer experience,access to valuable customer data and insights,and improved profit margins and revenue opportunities.I know the products are authenticMore competitive pricesService and/or delivery times
144、 are similar or better than using multi-brand retailersBetter availability of stockBetter choice-I get to see all the products for the brand in one placeI always use that particular brand in that categoryConvenience34%35%37%62%43%39%22%35%22%43%50%47%30%43%ChinaGlobalSource:Global Consumer Insights
145、Survey 2023Managing post-purchase cognitive dissonance 2023 Global Consumer Insights Survey China report31Another crucial point of friction arises post-purchase.Returns have always been an inherently challenging aspect of the shopping experience.However,with the proliferation of e-commerce,returns h
146、ave become a more convoluted issue for online retailers compared to physical retailers,primarily due to cost fluctuations in shipping and logistics.The upsurge in online shopping during the pandemic further compounded the situation.Our survey sought to determine the factors that could potentially di
147、minish the frequency of returns made by Chinese consumers.It suggests that providing more precise sizing information(49%)and the ability to read reviews form other customers(49%)both stood out as the most significant factor,surpassing greater accuracy in product descriptions by four percentage point
148、s.Interestingly,4%of online shoppers confessed that they typically do not return items,a much lower proportion that their global counterparts.In summary,brands must identify,isolate and mitigate the many frictions that stand between them and their customers,and between their customers and optimal ex
149、periences.Beyond meeting consumers where they arephysically and psychologicallycompanies must invest to ensure that theyll be able to meet them where they will be in the future.A discernible discrepancy exists between the perceptions of executives and consumers regarding the reasons why customers ma
150、y abandon a brand.While executives may attribute customer attrition to price changes or competitive factors,many consumers attribute it to negative experiences with products and customer service.This price-experience gap underscores a fundamental disconnect regarding the factors that can drive custo
151、mer loyalty.Toretain customers and engender loyalty,brands should prioritisedelivering exceptional customer experiences,through mitigating and removing various points of frictions.Figure 20:Thinking specifically about any products purchased online which you have returned,which of the following facto
152、rs,if any,would reduce the number of returns you make?49%45%More accurate sizing informationIf a retailer starts charging me for returns23%25%More immersive and/or interactive images of products to clearly see what I am buyingIf I know the goods I return would not be resold and would go to landfill
153、instead33%30%22%21%35%34%Items being packaged appropriately to avoid damageMore accurate and detailed product descriptions45%44%49%40%Ability to read previous customer reviewsChinaGlobalSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report32Delivering different
154、iated customer experiences through digital technologyLeveraging superior store experiences via user-generated contents(UGCs)Consumer brands are investing in the enhancement of their in-store experiences by focusing on store designs,revamping decorations,incorporating interactive elements,and creatin
155、g inviting social spaces.Brick-and-mortar stores are evolving into experiential centres,providing customers with unique and captivating experiences throughout their journey.This not only delights customers but also motivates them to share their experiences through short videos,pictures,or user revie
156、ws on social media.As a result,word-of-mouth marketing is amplified,attracting more potential buyers and fans online at virtually no additional cost.Enabling innovative user interactions with digital toolsBrick-and-mortar stores have undergone a remarkable transformation,surpassing their traditional
157、 role as mere sales outlets.They have become pivotal touchpoints that offer interactive experiences,value-added services,and digital immersion to consumers.Companies are leveraging digital technologies to design tailored interactions and immersive experiences that cater to users preferences and circ
158、umstances.Advanced technologies like AR(Augmented Reality),smart mirrors,and RFID(Radio Frequency Identification)are being deployed in brick-and-mortar stores to enhance the product selection process and improve service efficiency.By doing so,consumer brands not only enrich their interactions with c
159、ustomers and boost conversion rates but also gather valuable sensor data to analyse consumer preferences.This data can be used to continuously enhance in-store experiences,including product displays and customer services.Prioritising user engagement through digital applicationsRecognising the immens
160、e value of their existing customer base,consumer brands are placing a heightened emphasis on user engagement.Brands are using advanced data analytics and tools to extract diverse insights from their existing customers.With the aid of data-driven insights,brands can effectively fine-tune their market
161、ingstrategies,catering to their customers needs,ensuring customer satisfaction,and fostering their long-term loyalty.To further enhance their efforts,brands are utilising typical Mar-tech tools such as CDP(Customer Data Platform),SCRM(Social CRM),and MA(Marketing Automation).These tools empower bran
162、ds to conduct in-depth analytics and execute targeted marketing campaigns that focus on their existing customer base.2023 Global Consumer Insights Survey China report335.Exploring supply chain innovations to address customer pain points In fact,supply chain issues are manifested in ways that impact
163、online shoppers as well,an indication of the frictions that can build up in online environments.When asked to identify issues theyve experienced almost always or frequently while shopping online,22%of Chinese consumers named the rising prices of household goods,highest among all categories but still
164、 shy of 33%reported by their global counterparts.A lower proportion cited delivery time longer than they were told at time of purchase and reasonably expected,products being lower quality than usual,and inability to buy a product because it was out of stock.Apart from rising price being less of a co
165、ncern for Chinese consumers,all other supply chain pain points are reportedly more pronounced than the global average.Figure 21:Which of these issues is having the greatest impact on you when purchasing a product online?Rising prices for household goodsUnable to purchase a product due to it being ou
166、t of stockA product taking longer to be delivered than you were told at time of purchaseBeing given a delivery time for a product that is longer than you would reasonably expectProducts being lower quality than usual(e.g.change of supplier)Significant unavailability of your favourite foods/groceries
167、Reduced product ranges availableIndustrial supply chains in China,once disrupted bythe pandemic,is now gradually normalising with thereturn of manufacturing activities and resumption of logistics network.However,consumption appears to be bouncing back at a much faster pace due to policy stimulus and
168、 pent-up demand,raising the question of whether retailers can deliver products and services efficiently with their current supply chain setups.22%12%17%14%16%8%11%33%15%13%12%11%8%8%ChinaGlobalSource:Global Consumer Insights Survey 2023Figure 22:Which of these issues is having the greatest impact on
169、 you when purchasing a product in physical stores?Rising prices for household goodsLarger queues in-store and/or busier store locationsUnable to purchase a product due to it being out of stockSignificant unavailability of your favourite foods/groceriesReduced product ranges availableBeing given a de
170、livery time for a product that is longer than you would reasonably expectProducts being lower quality than usual(e.g.change of supplier)A product taking longer to be delivered than you were told at time of purchase2023 Global Consumer Insights Survey China report34Looking at in-store shopping experi
171、ences reveals a similar pattern.While 26%of Chinese consumers considered rising prices for household goods as the biggest experience killer,lesser portion of them reported issues arising from long queues,busier store locations and out of stock products remain the factors most impacting consumers sho
172、pping in-store.This highlights the need for retailers and supply chain managers to prioritise and address these common issues to improve customer satisfaction and loyalty.Apparently,the ability to address supply chain pain points will form a new source of competitiveness for retailers,as they start
173、to realise the importance of localising or shortening their supply chains to reduce the risk of logistical or transportation disruptions.Product shortages and higher prices are forcing businesses to pivot and provide new solutions for customers to access products and services.Localisation,end-to-end
174、 digitisation,and circular economy will become major themes for supply chain innovation.In particular,the source-local trend continues to gain traction as manufacturers seek to consolidate their upstream supply chains while investors bargain hunt on undervalued companies.The successful commercial de
175、but of Chinas home-grown C919 passenger jet has already prompted market expectations for a fast expansion of the domestic aircraft production supply chain,giving travelers another economically viable option.viOn the other hand,advanced AI and natural language models present the potential to optimise
176、 supply chain management for retailers.By using machine learning algorithms to analyse data from multiple sources,such as sales data,customer behavior,and external factors like weather and seasonality,generative AI can identify patterns and make predictions about future demand for a particular produ
177、ct,as well as identifying slow-moving products or those that are likely to expire soon,thereby reducing the likelihood of excess inventory and stockouts.For example,a US-based food and drug company has implemented a predictive ordering platform leveraging AI-generated real-time insights to manage th
178、e supply chain for its fresh products,allowing it to reduce waste and increase sales,in addition to simplifying the end-to-end planning process.Similarly,Tomorrow AI leverages existing supply chain data and integrates it with precise weather forecasts to generate comprehensive scenarios that enhance
179、 store resilience,reduce downtime,and ensure worker safety.26%18%12%8%9%9%9%7%41%14%12%8%7%6%6%6%ChinaGlobalSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report35Brands6.Brands are charting new growth paths to leverage the normalisation effect2023 Global Consu
180、mer Insights Survey China report36Foreign brands making inroads to bank on the normalisation effectImports of consumer goods in China are increasing gradually,with a 6.6%YoY increase in the first half of 2023.Cross-border e-commerce imports also rose from 1.8 trillion yuan to 3.4 trillion yuan betwe
181、en 2017 and 2022,with a 14%compound growth rate.Overseas brands are entering the domestic e-commerce market at an accelerating rate.Tmall Global,for example,had nearly 8,500 new brands join in the past year alone.The compound annual growth rate of overseas brands entering China from 2017 to 2022 was
182、 about 52%,signifying the rapid development of Chinas online import consumption market.7.9%32.0%79.0%66.6%20.7%70.0%2002020212022.%CAGRFigure 23:The number of overseas merchants entered Tmall Global from 2017 to Nov 2022Source:Emerging Trends in the Chinese Consumer Market us
183、her in New Opportunities for Overseas Brands2023 Global Consumer Insights Survey China report37At the beginning of 2023,the Central Economic Conference proposed to further stabilise the expectations of foreign investment,promote steady and expanded foreign investment,and cultivate new growth points
184、for international economic and trade cooperation.On January 1,2023,the Encouragement of Foreign Investment Industrial Catalogue(2022 Edition)officially came into effect,expanding market access and further opening up the modern service industry sector.At the same time,building international consumpti
185、on centres has been a key policy initiative,as outlined in the countrys 14th Five-Year Plan,to promote high quality growth in consumption and upgrading.Following the footsteps of the five pilot cites Shanghai,Beijing,Guangzhou,Tianjin and Chongqing,over 20 cities across the country have launched dev
186、elopment plans and action plans to cultivate and build international consumption centres,attracting global brands to deepen their presence in the Chinese market.With the gradual manifestation of policy effects,it is believed that overseas brands will also usher in new opportunities for development i
187、n China.Domestic brands seek growth on source-local trend and cross-border ecommerce Compared to last year and considering all else equal,19%of Chinese consumers are more(or much more)inclined to buy from domestic brands,while 46%said they are indifferent.Although such inclination has receded since
188、the last time our survey was conducted,there is still a strong preference for domestic brands in China,where consumers perceive them as being more cost-effective and having a better understanding of local consumer habits.This has created new opportunities for local brands to compete with internation
189、al brands,particularly in sectors such as food and beverage,where consumers are becoming more conscious of the origin and quality of their products.Figure 24:Relative to last year and considering all else as equal,are you now more inclined to buy from foreign or domestic brands?I am much more inclin
190、ed to buy from foreign brandsI am more inclined to buy from foreign brandsI am indifferent as to whether the brand is domestic or foreignI am more inclined to buy from domestic brandsI am much more inclined to buy from domestic brands15%15%46%19%6%8%20%44%22%5%20232022Source:Global Consumer Insights
191、 Survey 20232023 Global Consumer Insights Survey China report38Chinese domestic brands should refine their strategies to move beyond price competition and prioritise delivering superior non-price attributes that are valued by consumers.Our survey reveals that Chinese consumers are highly motivated b
192、y the factors of customisation,sustainability,and transparency when making purchasing decisions.Considering the current economic climate,to a much greater extent than their global counterparts,92%of Chinese consumers are willing to pay varying degree of premium for products bespoke or custom made,86
193、%for products produced with a lower supply chain/carbon footprint,and 85%for products that has traceable and/or transparent origin,and 84%for locally sourced products.Remarkably,Chinese consumers exhibit a lower tendency than their global counterparts to resist paying above-average prices across var
194、ious product attributes.This observation potentially suggests a greater inclination towards embracing novel consumption concepts.Figure 25:How much above an average price would you be willing to pay for a product that is?16%24%23%16%13%7%26%21%17%12%7%15%22%26%18%13%6%8%19%24%23%17%8%17%23%22%18%16%
195、5%16%24%24%18%12%6%14%26%24%18%11%6%21%25%22%16%10%7%23%25%21%15%10%7%25%24%21%14%10%6%17%20%23%19%12%8%24%22%21%15%10%7%24%25%19%15%10%6%26%25%20%15%9%6%Produced/sourced locally to you(e.g.from a local farmers market)Bespoke or custom madeMade from recycled,sustainable or eco-friendly materialsTrac
196、eable and/or transparent with its origin(e.g.fair trade)Produced by a company with a reputation for ethical practices e.g.supporting human rightsProduced with a lower supply chain/carbon footprintBiodegradable and can be disposed of at homeUp to 5%6-10%11-20%21-30%More than 30%I would not pay above
197、average priceChinaGlobal17%Source:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report39Besides,given Chinas lifting of restrictive measures,its time for domestic brands to rethink their international strategies to seek growth in neighbouringcountries particularly in
198、 South-East Asia via cross-border ecommerce.Tencent,Lazada,Huawei,and other Chinese companies have expanded their footprints to open shops in Southeast Asia to take advantage of the regions physical proximity,rising spending power,and greater acceptance of Chinese brands.According to data from the G
199、eneral Administration of Customs,Chinas cross-border e-commerce segment saw its import and export scale reach 2.11 trillion yuan in 2022,representing a 9.8%increase.E-commerce exports alone totalled 1.55 trillion yuan,posting a nearly 12%uptick.The number of Chinese brand owners on Amazon has increa
200、sed nearly threefold over the past three years,with their turnover experiencing double-digit growth last year.In November 2022,the Chinese government approved the creation of comprehensive pilot zones for cross-border e-commerce in 33 additional cities and regions,marking the seventh round of such p
201、ilot areas and bringing the countrywide total to 165.This move was aimed at further stimulating foreign trade growth.viiHong Kong-based Television Broadcaster(TVB)teamed up with Chinese e-commerce giant Alibabas e-marketplace Taobao on livestreaming in a deal expected to significantly boost income t
202、hrough cross-border e-commerce.Leveraging its wealth of talented artists and robust content production capabilities,TVB successfully converted viewership into dollars spent in a series of livestreaming sessions that supply mainland customers with high-quality goods from Hong Kong and a wide range of
203、 foreign countries.viii2023 Global Consumer Insights Survey China report40Digital transformation has paved the way for the Direct-to-Consumer(DTC)model to become a prominent avenue for new growth among both Chinese and global players,particularly in the context of the COVID-19 era.In fact,numerous l
204、eading global brands have announced their intent to undergo substantial transformations of their distribution channels,with DTC becoming their primary go-to-market strategy.Their aspirations include driving half or even 60%of their total global revenue through DTC within the next 3 to 5 years.In lin
205、e with this trend,Chinese consumer brands are strategically adopting DTC models to seize new growth opportunities.Both durable goods brands and FMCG brands are eager to rebuild their relationships with consumers through direct interactions facilitated by digital technology and platforms.This approac
206、h enables them to gain better insights into evolving customer demands,co-create products at a faster pace,and adapt to the paradigm shift in marketing.For example,Li-Nings self-operated stores follow a digitally-enabled DTC strategy focused on precision cultivation,ensuring a balance between custome
207、r experience and sales to drive overall store efficiency.The company recognises the significance of its store network as vitaltouchpoints for creating the unique Li-Ning-style experience.To achieve this,Li-Ning invests in upgrading and renovating store decorations,incorporating interactive installat
208、ions,and designing social spaces that foster a dynamic sports and social ambiance within the store.253243536473849600192020E2021E2022E2023E2024E+26%+14%CNY,billionFigure 26:DTC model market size in China2015-2024ESource:Enlighten Fashion Brands Routes to the DTC Model whitepape
209、r,PwC Strategy&;DTC as a pivotal growth driver for major players in Chinese consumer marketLove for luxury continues with more targeted spending 2023 Global Consumer Insights Survey China report41Luxury spending by Chinese consumers remain intact despite a more uncertain economic outlook.40%of surve
210、yed consumers intend to increase their spending on luxury or designer products,far-exceeding their global counterparts,with only one in five stating they will decrease their spend in this category in the next six months.The lower net annual increase in spending is likely due to a shift in consumer p
211、riorities towards essential goods such as groceries,and health and beauty,especially in the context of post-pandemic uncertainty.There is still solid demand for luxury goods in general,albeit at a slower rate of growth compared to other categories.11%53%9%58%15%53%13%54%12%43%12%50%14%42%13%41%40%20
212、%TravelHome entertainment(books,music,movies and video games)Fashion(clothing and footwear)GroceryConsumer electronicsSports and fitness equipmentHealth and beautyDo-it-yourself/home improvementVirtual online activities,classes or events(fitness classes,cook along events,virtual concerts,live stream
213、s of events)Luxury or designer productsNET:IncreaseNET:DecreaseChinaFigure 27:Thinking about your spending over the next 6 months,to the best of your ability,please describe your expectations on spend across the following categories9%62%25%40%25%31%17%45%27%35%26%31%24%26%23%33%23%31%25%24%31%21%Glo
214、balSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report42Despite 2022 broad market slowdown,demand for luxury set to regain momentum with the reversal of pandemic measures and the resumption of inbound and outbound travel.PwC forecasts that by 2025,the size of
215、 Chinas luxury goods market will reach 816 billion yuan,accounting for approximately 25%of the global luxury goods market.ixFigure 28:Why do you buy luxury or designer products?While the top reasons for purchase relate to viewing luxury items and as a treat for themselves and others(39%),keeping up
216、with trends(34%),and seeing them as a store of value or investment(31%),the strongest driver of future spend in this category is the personal feel-good factor(45%),reinforcing the important role luxury plays in building ones social currency,or the ability to influence others in social networks and c
217、ommunities.For those who plan to reduce spend in this area,a considerable portion cited decline in personal finances(48%)and a change in their shopping habits to buy more non-luxury products(42%).29%31%45%34%39%31%39%26%35%22%40%36%ChinaGlobalThe product quality is better than non-luxuryI see luxury
218、 items as investments(since they hold their value)I want to feel good about myselfI want to keep up with trendsI want to treat myself/othersLuxury items have longevity and need replacing less oftenSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report43Looking a
219、t luxury market share by region,the differences observed in the Chinese mainland and Hong Kong extend to other growing Asian economies,where there is an increasing need for social currency and a desire for luxury goods.Mature luxury markets like the US and Europe are currently focused on the wave of
220、 regulations sweeping across various industries and countries,such as the German Supply Chain Act(LkSG)and the Corporate Sustainability Due Diligence Directive(CSDDD).In contrast,growing economies are seeking luxury products with sustainability as an expectation.As the implementation dates for regul
221、ations facing the luxury industry draw nearer,it is projected that mature markets will maintain stable growth,while the rest of Asia will drive the growth agenda.Sector wise,luxury brands are rapidly expanding and optimising their presence in the beauty industry through the introduction of new and s
222、ustainable product lines,such as the launch of N1 De Chanel by Chanel,and the establishment of dedicated beauty divisions,as exemplified by the Kering Group.Moreover,these brands are committed to promoting a luxurious lifestyle by venturing into the hospitality sector,as seen with the likes of the L
223、ouis Vuitton Hotel and Homme,and the fitness industry,as demonstrated by the HermsFIT pop-up gym.These strategic expansions aim to cater to the discerning needs of HNWIs.Additionally,luxury brands are exploring opportunities in the film industry,with Saint Laurent pioneering the worlds first film pr
224、oduction company operated by a luxury brand.Furthermore,they are collaborating with renowned theatres,as evidenced by Valentinos partnership with Sleep No More in Shanghai in 2023,in order to promote both their culture and products.LVMHs Sephora has also introduced the China Accelerate brand incubat
225、or program,aimed at nurturing the growth of five Chinese premium beauty brands.The company will provide extensive support over the next three years to assist each brand in achieving annual sales of 100 million yuan.The recent visits of luxury group executives to China reflect their optimistic attitu
226、de towards the Chinese market.Since the end of 2022,many luxury brands have accelerated their expansion into the mainland market aided by cross-border ecommerce and Hainan duty free zone.For instance,Versace has debuted five new boutiques in Chengdu,Hangzhou,Shenzhen,and Nanjing,while the renovated
227、Herms Nanjing flagship store has reopened its doors to customers,with Prada opening its second boutique at Sanya Phoenix International Airport.xChinaThe USEuropeJapanRest of AsiaRest of World2022E2025E22%25%24%22%27%23%9%10%14%16%4%4%Figure 29:Luxury Market Share by RegionSource:Mainland China and H
228、K Luxury Market Insights7.The ESG price premium gives rise to sustainability as business differentiator Global consumers are paying increasing attention to sustainable consumption,as 40%+of respondents are willing to pay up to 10%above the average price for products and services with a positive ESG
229、association.Chinese consumers are placing a growing emphasis on eco-friendly products that align with their personal values and beliefs.Our study indicates that consumers in China are willing to pay a premium of up to 20%for products that are environmentally friendly and perceived to be trustworthy.
230、This shift in consumer behaviour is driving many large consumer goods companies to prioritise ESG factors into daily business operations.2023 Global Consumer Insights Survey China report44NET:Willing to pay up to 10%more than the average priceFigure 30:%above average price that global consumers woul
231、d pay for a product that isProduced/sourced locally to you(e.g.from a local farmers market)Made from recycled,sustainable or eco-friendly materialsProduced with a lower supply chain/carbon footprintTraceable and/or transparent with its origin(e.g.fair trade)Biodegradable and can be disposed of at ho
232、meProduced by a company with a reputation for ethical practices(e.g.supporting human rights)Bespoke or custom madeI would not pay above average priceUp to 5%6-10%11-20%21-30%More than 30%47%46%45%45%44%44%43%21%23%26%25%24%24%17%25%25%25%24%25%22%20%22%21%20%21%19%21%23%16%15%15%14%15%15%19%10%10%9%
233、10%10%10%12%7%7%6%6%6%7%8%Millennials and Gen Z appear most willing to pay above average pricesSource:Global Consumer Insights Survey 20232023 Global Consumer Insights Survey China report4520%44%26%28%27%23%29%34%18%22%21%10%27%28%17%12%13%12%27%19%19%13%16%15%15%16%17%38%29%25%25%20%34%29%21%21%20%
234、6%31%22%9%9%13%5%23%19%17%10%11%11%11%10%17%31%31%22%24%14%33%28%15%26%16%8%31%21%10%9%7%6%22%17%16%10%11%12%12%10%17%30%28%26%21%20%36%28%22%18%18%7%27%22%12%9%7%6%20%18%15%11%16%12%12%10%16%34%20%18%26%16%32%28%15%24%20%8%30%20%11%7%9%5%22%17%19%9%13%13%11%11%16%32%25%21%22%24%25%29%18%23%21%8%28%
235、20%10%11%10%6%21%16%15%7%12%10%9%10%15%30%25%19%21%21%25%23%15%15%16%7%26%19%10%11%7%6%18%15%15%8%12%10%8%10%9.7715.313.2 11.76 13.471114.59 14.32 10.12 12.13 11.28 6.84 14.13 11.79 7.658.047.635.07 11.41 9.41 10.08 6.698.347.817.347.53CanadaSpainUSABrazilEgyptPhilippinesIndonesiaHong KongJapanFranc
236、eGlobalUAESouth AfricaQatarSaudi ArabiaMalaysiaVietnamThailandSingaporeIndiaChinese mainlandAustraliaSouth KoreaMexicoGermanyIrelandIncreasing willingness to pay above an average price the darker the yellow,the greater the likelihood of paying 20%+above the average priceBespoke or custom madeProduce
237、d by a company with a reputation for ethical practices e.g.supporting human rightsMade from recycled,sustainable or eco-friendly materialsProduced/sourced locally to you(e.g.from a local farmers market)Biodegradable and can be disposed of at homeTraceable and/or transparent with its origin(e.g.fair
238、trade)Produced with a lower supply chain/carbon footprintMean%spend above average priceNET:Willing to pay up to 20%above average priceMiddle East and AfricaSEACAsia PacificAmericasWestern EuropeFigure 31:Consumers willing to pay up to 20%above average price for ESG-related products or servicesSource
239、:Global Consumer Insights Survey 202346To better execute their ESG strategies,leaders are engaging with suppliers that adhere to strict ESG standards.By selecting suppliers that prioritise sustainability and ethical considerations,these companies can better meet customer requirements,enhance brand r
240、eputation,and gain a competitive edge in the Chinese market.Therefore it is increasingly crucial for companies to pay close attention to ESG factors in their business operations and supply chain management to remain competitive and ensure long-term growth and success.One key area of interest is circ
241、ular model innovation which is gaining traction in the luxury industry,with major brands making investments in second-hand luxury rental and resale segment through C2C or B2B2C platforms.Gucci and Kering co-launched a circularity hub in February 2023,aiming to redefine the value chain from raw mater
242、ials and design to production and logistics,while creating a more sustainable and circular approach to consumption.On top of this,three emerging themes-young generation,gamification and sincerity-have become essential for ESG promotion and consumer education:Young generation,including Gen Z and Alph
243、a,represents a targeted consumer group for ESG promotion and sustainable consumption.This dynamic and energetic demographic has a strong preference for products that embody meaningful ESG elements.For example,JD and P&G have collaborated on the Zero Carbon Youth program,which aims to incorporate ESG
244、 and zero-carbon practices into the daily lives of young people.Similarly,IKEA communicates the concept of a sustainable lifestyle,emphasising how it can help consumers save money.Gamificationis another effective approach to interact and engage with consumers by leveraging AI-powered technology to c
245、reate customised experiences with a social impact.For instance,the DNA fragrance and multi-sensory digital fragrance experience involve extracting small amounts of DNA from floral samples to synthetically reproduce scents and provide an interactive journey for consumers through VR headsets.This imme
246、rsive experience allows users to engage with fragrances through touch,smell,sound,and sight.Sincerity can be approached in various ways.Firstly,by reducing shopping waste and enhancing consumer experiences through AI,AR,VR,and even the metaverse.Examples include virtual makeup and immersive art exhi
247、bitions,which enhance consumer experiences while minimising environmental impact.Secondly,promoting and offering discounted defective products,such as items with flawed packaging,encourages a sustainable,circular,and reusable lifestyle.Lastly,responsible store design plays a role,including the use o
248、f sustainable materials for decoration(as seen in Anya Hindmarchs practices)and printing green identification codes on products(as done by Stella McCartney).2023 Global Consumer Insights Survey China reportBrands are actively responding to consumer by embracing circularity in their supply chains and
249、 recognising the value of sustainability.Rather than viewing sustainability as a mere compliance requirement,brands are now leveraging it as a differentiating factor that adds value to their products and services.This shift in mindset has sparked innovative collaborations and transformative changes
250、in how brands approach sustainability as a value-adding differentiator,and how they develop sustainable DTC engagement along the customer journey to enhance interaction,as illustrated in the following examples.Examples of Consumer Sustainable Marketing and Engagement2023 Global Consumer Insights Sur
251、vey China report47ProductLuxuryMarketingIncentiveBusinessModelInformative&Interactive PackagingCircularity in actionDedicated Green Product PromotionSustainable Incentive ProgrammesInnovative Revenue GenerationLOral China:Environmental&Social Impact LabellingLVMH:Partnership with Nona Source,Cedre,W
252、eturnHaier&Midea:On-line Green Product EventNestle/Coca-Cola/Liby:Green CreditUnilever China:Sell digital Ads on its bottle recycling machineInteract with consumers through scanning the barcode on the package for detailed introduction of product impact on environment and societyPartnerships with sta
253、rt-ups to recycle deadstock/waste from different lines of business for re-use/re-sale to deliver products with low environment imprintLaunched dedicated green product events with Tmall and JD to attract environmentally cautious consumersCollaborate with partners,such as Ali 88 carbon account,to offe
254、r carbon credit as incentives for consumers purchasing and other sustainable behaviourSet up bottle recycle machines at places with large traffic volume(e.g.campus,and shopping malls)and generate revenue by selling Ads displayed on the machinesConclusion and recommendationsWith the world getting bac
255、k to normal and Chinas refocus on economic recovery,the message to brands and retailers is clear:They need to take bolder steps to rejuvenate and build their business models for sustainable growth under the ever-changing competitive landscape.Brands and retailers are facing a dual imperative world w
256、here success hinges on the companys ability to simultaneously tackle the challenges of today and run the race of tomorrow.From enhancing customer experience to adopting the right approach to technology,they should rethink their strategy in the following high-impact areas:2023 Global Consumer Insight
257、s Survey China report48Transcend non-price attributes across bordersCustomisation,sustainability,and transparency are key factors that are highly valued by Chinese consumers when making purchasing decisions.This underscores the importance for brands to offer products that are bespoke,locally sourced
258、,sustainably produced,and have traceable origins.With Chinas reconnection to the world,there will be immense opportunities for both domestic and international brands to cater to these new values through cross-border ecommerce.In todays competitive marketplace,its crucial for brands to tell a compell
259、ing story about their products and the values they stand for.One of the most effective ways to achieve this is through loyalty programs,which enable brands to establish a direct connection with consumers.By interacting with customers through these programs,companies can shape how their brand is perc
260、eived.As such,membership operations should be viewed as a critical component of systematic brand building,with continuous communication of brand positioning during the process to reinforce users awareness.By leveraging the power of customer communities,brands can unlock new opportunities for growth
261、and drive long-term loyalty from their audience.Unlock the power of brand story-tellingCreate path of least resistance to deal with various frictionsConsumer-facing companies must focus on resilience and conduct scenario planning to mitigate the impact of uncontrollable macro-level frictions such as
262、 weak demand,global recession,and trade disruptions.To prevent friction caused by insufficient staffing or failed experience management,companies should prioritise operational excellence and innovate with technology to create satisfying phygital experiences.Companies must also monitor changing custo
263、mer behavior due to economic or personal circumstances and invest in initiatives to meet customers needs and build loyalty.Balance cost and benefits beyond technology hypesAs more retailers jump onto the bandwagon to consider the adoption of metaverse and generative AI,it is crucial to conduct a tho
264、rough cost-benefit analysis.While these technologies offer benefits such as increased sales and customer engagement,retailers must also evaluate the upfront investment and ongoing maintenance costs.It is essential to ensure that the use of these advanced technologies is actually in sync with their b
265、rand value position,business strategy and customer needs.Reduce the price-experience gap to foster brand loyalty Executives and consumers have differing opinions on the reasons why customers abandon a brand.Executives attribute it to price changes or competition,whereas many consumers point to poor
266、experiences with products or customer service.This discrepancy,known as the price-experience gap,highlights a mismatch in understanding what drives customer loyalty.To retain customers,companies should prioritise delivering exceptional experiences rather than solely focusing on low prices.2023 Globa
267、l Consumer Insights Survey China report49About the surveyThe 2023 Global Consumer Insights Survey is a biannual study seeking to keep a closer watch on changing consumer trends.For our latest pulse survey,we polled 8,975 consumers across 25 territories(Australia,Brazil,Canada,Chinese mainland,Egypt,
268、France,Germany,Hong Kong SAR,India,Indonesia,Ireland,Japan,Malaysia,Mexico,Philippines,Qatar,Saudi Arabia,Singapore,South Africa,South Korea,Spain,Thailand,United Arab Emirates,United States,Vietnam).We have adopted a pulse approach since 2021 in order to remain attuned to changes in the worldwide l
269、andscape and connected to the behaviour of the global consumer.This annual study composing of two semi-annual pulse surveys seeks to keep a closer watch on changing consumer trends.It was put into the field in late autumn 2022 and in spring 2023.Among the 18,155 global participants of the past two p
270、ulse surveys,more than 1276 consumers are from Chinese mainland and Hong Kong.The questionnaire was translated into 14 languages and fielded in March 2023.The respondents were at least 18 years old and were required to have shopped online at least once in the previous year.This survey and its analys
271、is were undertaken by PwC Research,our global centre of excellence for primary research and evidence-based consulting services.Percentages shown in charts may not add up to 100%due to rounding.For more details,please visit:www.pwc.co.uk/pwcresearch2023 Global Consumer Insights Survey China report502
272、023 Global Consumer Insights Survey China report51i.https:/ Global Consumer Insights Survey China report52Contact usMichael ChengPwC Asia Pacific,Mainland China and Hong Kong Consumer Markets Leader+852 2289 Jennifer YePwC Mainland China Consumer Markets Leader+86(21)2323 AcknowledgementsAuthors:Mic
273、hael ChengJennifer YeEditorial:Terrance LuiJulie WuSpecial thanks to:Chiang Ling Li James LeeJerry HuaKok Tin GanLeon ZhangNicole SunPeter BrewinSteven ZhongTim EdmundsSheila Zheng Wilson Wu Esther MakMichelle ManProject management:Yvonne ChauCeline SunCreative:Koey LThis content is for general info
274、rmation purposes only,and should not be used as a substitute for consultation with professional advisors.2023 PricewaterhouseCoopers Limited.All rights reserved.PwC refers to the Hong Kong member firm,and may sometimesrefer to the PwC network.Each member firm is a separate legal entity.Please see for further details.