[0929] China digital consumer trends in 2019

[0929] China digital consumer trends in 2019




New research from a survey of 4,300 Chinese consumers suggests a path forward for brands and marketers seeking the next wave of growth.

China’s rise as a global leader in e-commerce has been nothing less than stunning. This year, online retail sales are expected to swell to $1.5 trillion, representing a quarter of China’s total retail-sales volume, and more than the retail sales of the ten next largest markets in the world—combined.

The country’s 855 million digital consumers—among some of the most avid users of mobile phones and social media in the world—represent one of the biggest prizes for global marketers.

But things are getting a lot tougher: growth of online retail sales is cooling, dipping from the heady 40 and 50 percent annual rates seen in the early part of the decade to 25 percent compound annual growth in the past few years.Brands looking for the next wave of digitally fueled growth in China are grappling with a number of thorny questions.

And an increasingly crowded marketplace has led to fierce competition among brands, pushing up the cost of acquiring new customers and retaining them. For example, the cost per thousand user views (CPM) of advertisements placed on Tmall’s baby channel has increased on average by 60 percent since 2017.

We complemented this field research with category-specific expert interviews, as well as insights drawn from our experience working with some of China’s most innovative and fastest-growing domestic and multinational consumer-facing companies. In our latest report, we explore five major areas of opportunity for consumer-facing marketers:

1.digitally powered physical retail innovation: crafting an intentional strategy to tap into omnichannel behavior
2. social commerce: monetizing social attention and engaging with consumers through direct-to-consumer channels
3. small-town youth: identifying the next pocket of customer growth
4. KOLs and KOCs: fine-tuning the levers of consumer influence
5. sales events and discounts: data-enabled pricing and promotions

Download China digital consumer trends 2019: Discovering the next wave of growth, the full report on which this article from McKinsey Insights Mobile App.

Lambert Bu is a partner in McKinsey’s Shenzhen office, where Daniel Zipser is a senior partner; Jacob Wang is an associate partner in the Shanghai office; and Kevin Wei Wang is a senior partner in the Hong Kong office.