1、 Preparing for changing customer needs, behaviours and expectations Consumers and the new reality Overview Across China and around the world, a new consumer is emerging one that is financially impacted, more advanced in their use of digital technologies, more thoughtful and selective in their decisi

2、on- making, and keen to see COVID-19 as an opportunity to reset values in the world. The changes were seeing are likely not short term. Most consumers believe they will be living their lives very differently for the foreseeable future. Businesses will be faced with new challenges in this new reality

3、. Our research identifies three areas to inform organisations decisions and plans: The economic impact of COVID-19 will influence behaviours for some time to come. On average, over 40 percent of consumers we surveyed are financially impacted and are, therefore, reducing their discretionary spend. Ne

4、w and persistent consumer segments have emerged based on the economic and psychological impact of COVID-19. Those most affected (economically and psychologically) are less inclined to pay a premium for branded products or nice-to-have experiential factors and are deferring non-essential purchases. I

5、n China, this has translated into higher demand for groceries, fast moving consumer goods (FMCGs), and other food and beverages, and less overall demand for apparel and jewellery. Consumers are also placing a higher emphasis on home delivery and local convenience. The new consumer is digitally savvy

6、 and embraces the ease with which they can interact with organisations through digital channels. Organisations have responded to COVID-19 with high levels of innovation, including greater digital access to purchasing and customer support. In China in particular, were seeing a rise in new online shop

7、ping formats, such as influencer livestreams, self-built e-commerce and community commerce. Consumers increasingly purchase from organisations they trust, at a time where trust is becoming more complex to build. Historically, trust was driven by whether companies delivered on the brand promise. Now,

8、 trust is multidimensional and nuanced: trust that companies will continue to put the consumers needs first, trust that the consumer will be safe dealing with them and trust that their data will be secure and protected. In addition, younger respondents are concerned about a companys environmental an

9、d social practices. Since the COVID-19 outbreak, Chinese consumers have become much more concerned with supply chain transparency and its potential impact on their wellbeing. There is higher demand for traceable supply chains; and greater trust in retail chains as opposed to smaller retailers, as th

10、ey perceive chains to adhere to stricter hygiene standards. The new consumer: financially impacted and more savvy 01 02 03 Overview As consumers in China continue to adapt to the pandemic and its after-effects, it is clear that these changes to their purchasing behaviours are here to stay. As brick-

11、and-mortar sales waned during the crisis, community commerce enabled through social media has prospered, further demonstrating the importance and strength of e-commerce channels in the Chinese retail market. To thrive in the post-COVID economy, retailers must embrace these changes and prepare for ne

12、w realities, particularly as the rise of Generation Z consumers further enhances these shifts. Consumers and the new reality2 2020 KPMG Huazhen LLP, a Peoples Republic of China partnership and KPMG Advisory (China) Limited, a wholly foreign owned enterprise in China and KPMG, a Hong Kong partnership

13、, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Hong Kong, China Organisations must focus on digital enablement of their customer and be clear on where they need

14、to win the customers trust. Each of the trends identified in our study accelerated with the beginning of COVID-19. This study confirms that they are persistent both over time and geography, and that their combined impact on consumers behaviors has stark implications for organisations. Companies can

15、no longer protect their price positioning with experiential factors (e.g. in-store coffee shops) that now have less direct benefit to the consumer. Key purchase drivers % = proportion of consumers who rate each as important in their decision-making Which of the following is important to you now when

16、 buying a product or service? Source: Consumers and the new reality, KPMG International, June 2020 Value for money63% 40% My personal safety 37%Range of products and services 35% Customer experience 19%Staff/people policy 19%Direct communications 18%Brands values match my own 18% Support for local c

17、ommunities 18%Brands social conscience 17%Brands approach to the environment 14% Personalisation 42%Ease of buying 41%Trust in the brand 3Consumers and the new reality 2020 KPMG Huazhen LLP, a Peoples Republic of China partnership and KPMG Advisory (China) Limited, a wholly foreign owned enterprise

18、in China and KPMG, a Hong Kong partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Hong Kong, China New segments emerge as attitudes shape spending Consume

19、rs spend is impacted by both the decrease in disposable income and the psychological impact of COVID-19. We see new segments arise, separated by their need to group products and services into categories of necessity, with spend moderated by financial attitudes. Overall, four in 10 are financially wo

20、rse off, with another 13 percent deferring major purchases. Organisations will need to rethink their business and operating models. The consumers search for value for money is much more than just short-term margin dilution. It is a fundamental change in purchase priorities and will be prevalent for

21、12 months or more. Consumers in Germany, France and Hong Kong (SAR), China feel more calm and secure, fitting into the financially comfortable category. In Brazil, Japan, Italy and Spain, more consumers have stopped all non-essential purchases and are more selective, feeling more financially overwhe

22、lmed and financial recovery being the priority. Value for money, and its corollary price, is the single most important factor in decision-making, with nearly half of respondents saying that it is more important now than pre-COVID-19, and is true for all markets included in this study. This is a dire

23、ct result of the financial concerns that now affect two-fifths of consumers. Just over half of consumers feel fi nancially comfortable or secure versus 43 percent who feel overwhelmed or vulnerable Financially comfortable Not affected fi nancially Kept spending as before Calm Financially overwhelmed

24、 Much worse off Struggling to cover essentials Overwhelmed and anxious Financially sensitive Slightly worse off Stopped non-essential purchases Vulnerable 28% 15% 44% 13% Financially secure Better off Spending as before but deferred major purchases Optimistic To what degree do you feel the COVID-19

25、situation is affecting your household fi nances? To what degree do you feel your spending behavior has changed vs. before? How do you currently feel about your fi nancial wellbeing? Source: Consumers and the new reality, KPMG International, June 2020 Value for money (63 percent) is the most importan

26、t purchase driver, with market variation shown below. Forty-seven percent say value for money is more important as a result of COVID-19 Which of the following is important to you now when buying a product or service? 82% Spain, Brazil 51% Mainland China 80% Italy, Australia77% France, Japan 76% Cana

27、da 74% UK Germany 70% Hong Kong (SAR), China 64% US Source: Consumers and the new reality, KPMG International, June 2020 Consumers and the new reality4 2020 KPMG Huazhen LLP, a Peoples Republic of China partnership and KPMG Advisory (China) Limited, a wholly foreign owned enterprise in China and KPM

28、G, a Hong Kong partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Hong Kong, China Overview Key findings all sectors A digitally savvy consumer emerges CO

29、VID-19 has amplified the need for easy access to products and services and relevant information. The majority of customers are now comfortable using online channels, reducing physical purchase occasions and are gravitating towards touchless shopping and contactless payments. for 18-44 year olds vs.

30、+1 percent for 45+ year olds). Overall, wesee a threefold increase of consumers claiming they will use social channels as their main means of communicating with Organisations in the new reality post-COVID-19. This shift to digital interactions is also prevalent in how consumers wish to pay, where di

31、gital payment types are on the rise. Online purchasing and contactless payment options have become the norm for most consumers, with the desire for safe contact-free purchase options reinforcing this trend. In mainland China, consumers intend to make much greater use of digital wallets. This trend i

32、s also more prevalent in Hong Kong (SAR), China and Brazil. Ease, therefore, is at the heart of a digital shift, which touches all parts of society irrespective of age. While the overall trends are as we would expect, there are some interesting nuances we see emerging. For example, younger consumers

33、 below the age of 45 are more likely to turn towards those channels they use most to communicate with their friends and families, such as messenger apps (+9 percent for 18-44 year olds vs. +3percent for 45+ year olds) or social media (+4 percent Organisations will need to invest in new digital metho

34、ds of communication and payments. Organisations will have to consider releasing cash from existing channels and shifting into digital. Prioritizing digital security will be key. In the future, the main channel of communication for customer support is likely to be increasingly digital, often with a h

35、uman touch Email App Website Phone call (I phone them) Visiting their stores or branches Before COVID-19Future, once restrictions are lifted Largest change among those aged: 1824 -25% 40% 26% 28% 20% 14% 16% 5% 10% 4% 7% 2544 -18% 2534 +9% 1824 +7% 2544 +10% 1844 +4% 2544 +6% Three times more consum

36、ers will use these methods as their main channel of communication in the new reality vs. pre-COVID (17% vs. 5%) SMS chat Video call Webchat Social media Messenger apps Community-based support website 3% 5% 4% 2% 2% 0% 1% 1% 1% 1% 1% 1% Thinking again about SECTOR, when you need support and contact o

37、rganisations, what was your main way of communicating (before/now/future)? Source: Consumers and the new reality, KPMG International, June 2020 -6% -9% -10% -44% 31% 28% 23% 9% Digital wallet Credit Debit Cash Less than pre-COVID-19More than pre-COVID-19 Consumers believe that they will use cards an

38、d digital wallet options more than cash for future purchases Respondents saying they would use each method the same as before are not shown Considering your future purchases, do you think you will use cash, cards or digital wallets more, the same or less than before the COVID-19 situation? Please co

39、nsider your future purchases once all restrictions are lifted Source: Consumers and the new reality, KPMG International, June 2020 Consumers and the new reality5 2020 KPMG Huazhen LLP, a Peoples Republic of China partnership and KPMG Advisory (China) Limited, a wholly foreign owned enterprise in Chi

40、na and KPMG, a Hong Kong partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Hong Kong, China Overview Key findings all sectors Brand trust is multidimensi

41、onal Trust, the third key factor influencing consumers purchase decisions, is also not a new concept. However, probably for the first time, consumers have seen organisations put the well-being of their customers and their employees ahead of profit. “ Acting in my best interest” is a key driver of tr

42、ust. Organisations will need to review their sense of purpose and ensure it is aligned to the unique environmental and social impacts that the individual company can make. Tight adherence to social distancing and personal safety will be demanded across every interaction. Organisations will need to i

43、dentify where they can build trust and ensure that actions that erode trust are eradicated. Consequently, trust between a consumer and an organisation has become increasingly multidimensional and contextual. Will I be safe when I interact with them? Can I trust them to put my well-being before profi

44、t? Will my data be safe? Will they behave creditably when it comes to their environmental and social obligations? On balance, most organisations have fared favorably in the eyes of the consumer. We see a net increase in trust of +3 percent, with some significant variations (see next page). From a se

45、ctor perspective, it is the grocery sector that has seen the greatest improvements in consumer trust (+8 percent), possibly as their immediate actions were most visible during lockdown periods across the globe. Trust, and its various components, have become a much more critical factor in influencing

46、 consumer decision-making. While personal safety (+56 percent) has increased most in importance, we see an increase in consideration of all elements of trust, from caring for the local community, to caring for colleagues, and to caring for the planet. On balance, slightly more customers are trusting

47、 of organisations now compared with before COVID-19 Less than before The same as before More than before 75% 14% 11% To what extent do you trust each type of company now, compared with before the COVID-19 situation? Source: Consumers and the new reality, KPMG International, June 2020 Trust in the br

48、and is impacted by perceptions of safety, as well as an organizations conduct towards their community, employees and the environment All these factors are signifi cantly more important to consumers now than pre-COVID-19, much more so to those aged 18-44 compared with those aged 45+ % is those saying

49、 more important Thinking again about those same things, have they become more or less important to you as a result of COVID-19? 56% 43% 42% 42% 38% 34% Personal safety Local communities Social conscience People policy Approach to environment Brands values match mine Source: Consumers and the new reality, KPMG International, June 2020 Consumers and the new reality6 2020 KPMG Huazhen LLP, a Peoples Republic of China partnership and KPMG Advisory (China) Limited, a wholly foreign owned enterprise in China and KPMG, a Hong Kong partnership, are member firms