China's archetypes are CPG focus

Warc, 25 June 2014

BEIJING: CPG brands and retailers should focus their marketing efforts in China on distinct consumer archetypes according to a new study from consulting firm Accenture.

For The Allure and Challenges of China's Changing Consumer Market, Accenture surveyed 3,500 urban consumers aged 18 to 55 living in 27 27 cities across Tiers 1 to 4 and with household income levels between ¥45,000 and ¥600,000, so excluding the wealthy and low income classes.

It identified a total of eight such archetypes – based on income, attitudes towards shopping, consumption needs and buying power – each with their own preferences and behaviours, and argued that companies needed to develop "differentiating strategies and value propositions that can be adapted to meet the needs of each".

At the lower income ranges, aspirational wage earners and price-sensitive families dominated, together making up about 30% of the urban Chinese consumer market.

A middle income group included internet civilians (23%) and thrifty householders (18%), although the latter had some crossover with the lower income range. A wealthier group contained fashion-forward consumers (5%), yuppies (10%), exclusive service buyers (6%) and conservative middle-income shoppers (8%).

The report highlighted several wider trends that should also inform brand strategies, including the rise of middle-class lifestyles and the development of a "me" culture where social status is asserted through buying choices.

Accenture's research found that Chinese consumers were "extraordinarily curious". And while this meant they were more than usually willing to try new products – only 10% of respondents were unwilling to try new brands – it also meant that it was difficult to drive brand loyalty. Relying on brand reputation to attract shoppers was not a recommended tactic.

The growing prevalence of digital channels required the creation of "smarter, seamless and secure experiences at every point of interaction", the report said. Brands should know how to reach their target consumers online and offline.

Linked to that was the expectation of an omni-channel shopping experience by China's "very pragmatic shoppers" who leveraged multiple channels before purchase.

If brands were to make the most of targeting consumer archetypes, Accenture recommended they first invest in technology to filter data and in building analytics capabilities. A consumer engagement blueprint would help deliver a better experience while opportunities for unconventional growth, through engaging consumers in new and more dynamic ways, should also be explored.

Data sourced from Accenture; additional content by Warc staff