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Epsilon China Consumer Experience Report 2015

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Epsilon powers business results for the world’s leading marketers, using customer intelligence to ignite connections between brands and customers with solutions that integrate rich data, engaging creativity and robust technologies. Each year we conduct proprietary consumer research across China to gain customer perspectives on topics that matter to brands. In this year’s study, we sought to explore Chinese consumer experience: the connections with brands they value the most, and the impact of those connections on purchase behaviors. We looked at how Chinese consumers engage with brands, with an eye toward helping brands build and benefit from positive consumer experiences. Covering clothing, grocery, financial services, travel, luxury, restaurant, eCommerce, appliance, food and beverage, and consumer product sectors, Epsilon’s research examined in depth how China’s consumers engage with brands across numerous touchpoints and channels.

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Epsilon China Consumer Experience Report 2015

  1. 1. epsilon.com December 2015 The always-on Chinese consumer experience
  2. 2. About the study Epsilon powers business results for the world’s leading marketers, using customer intelligence to ignite connections between brands and customers with solutions that integrate rich data, engaging creativity and robust technologies. Each year we conduct proprietary consumer research across China to gain customer perspectives on topics that matter to brands. In this year’s study, we sought to explore Chinese consumer experience: the connections with brands they value the most, and the impact of those connections on purchase behaviors. We looked at how Chinese consumers engage with brands, with an eye toward helping brands build and benefit from positive consumer experiences. Covering clothing, grocery, financial services, travel, luxury, restaurant, eCommerce, appliance, food and beverage, and consumer product sectors, Epsilon’s research examined in depth how China’s consumers engage with brands across numerous touchpoints and channels. Our survey results are based on data from 1,000 respondents in 29 Tier One and Tier Two cities, weighted to the age, gender, and geographic distribution of the population. More than half of the respondents earn more than RMB10,000 per month, and about a quarter earn more than RMB20,000 per month. More than half had undergraduate degrees or higher. The research was carried out via online channels and face-to-face interviews in August 2015. The always-on Chinese consumer experience 2
  3. 3. In Epsilon’s Spring 2015 report People’s Choice: A View into Chinese Customer Loyalty, we looked at the increasingly sophisticated and loyal Chinese consumer. Conducted as a follow on, this research on consumer experience in China adds color, depth, and detail to the task of understanding what these passionate shoppers want to feel, see, and know about brands. By asking what brands consumers interact with most frequently, what factors create the highest levels of satisfaction, and what actions they take to engage or disengage with brands, we gained insights to help brands win the hearts of Chinese shoppers. A picture emerges in which brand interactions are sought and welcomed through the full consumer journey spanning discovery, loyalty, and advocacy. As the nation steams through its fourth consecutive decade of development and into increasing maturity, Chinese consumers are in a phase of active desire to explore, understand, and affiliate with brands. Marketers working toward higher levels of engagement will be wise to study not only the overall climate for consumer experience in China but also the specific patterns of each sector and segment. “To achieve sustainable gains in the China market, brands need to offer enhanced consumer experience, through the right channels. Chinese consumers now expect more than a quality product. They want to feel a personal connection with their favorite brands on multiple levels.” — Vivien Deng, Director, Client Services, China, Epsilon The always-on Chinese consumer experience 3
  4. 4. Key findings 72% of respondents are online throughout the day 3.4 average number of different eCommerce brands that consumers interact with regularly 1. Our consumer loyalty report highlighted the I-Want-It-All appetite of Chinese consumers. This consumer experience research unearths more evidence of a passion for shopping in full bloom, nourished by vast and beloved eCommerce platforms like Taobao, JD, and Tmall. Accumulated experiences with the convenience, variety, accessibility and service levels of eCommerce platforms are shaping not only behaviors, but also expectations and standards for companies in all sectors. To dimension the role that eCommerce plays in consumer experience, the report delivers these salient data points: 72% of respondents are online throughout the day; the top factor for brand satisfaction is “always available;” two of the three top of mind brands are eCommerce platforms; and consumers interact regularly with an average of 3.4 different eCommerce brands. 2. Although online shopping sites are part of most consumer journeys and the preferred point of sale for many sectors and demographics, consumers in China still want to interact with their preferred brands through multiple channels. Out of fifteen channels listed in our questionnaire, eleven are accepted by more than 15% of Chinese consumers. At higher income levels, the engagement is broader; between nine and twelve channels – depending on the sector – are accepted by 20% or more of these consumers. 2 of 3 “most widely recognized” brands are eCommerce platforms The always-on Chinese consumer experience 4
  5. 5. 3. Findings about what motivates consumers to share personal information with brands highlight just how open they are to exploration, understanding, and affiliation with brands. Most encouraging for marketers is the level of enthusiasm for brand interaction. Since the top two responses are priority customer service (57%) and exclusive deals (53%), it’s clear that granting “apart-from-the-crowd” status can open the door to a closer brand relationship. According to the survey, tactics such as experiential rewards, point-based loyalty programs, VIP perks or even a clear promise on privacy – would be effective for obtaining personal information from somewhere between one third and one half of consumers. Effectively obtain personal information by using one of our suggested tactics: Experiential rewards Point-based loyalty programs VIP perks Clear promise on privacy 57% Priority customer service 53% Exclusive deals Top two responses for what motivates consumers to share personal information with brands: The always-on Chinese consumer experience 5
  6. 6. “China’s consumers can browse and buy from world-class eCommerce companies like Taobao, JD, and Tmall by day and get up close to brands at countless, gleaming shopping malls by night. For those brands that can provide an extraordinary experience, there are multiple opportunities for engagement, including phenomenal Word-of-Mouth.” — Dominic Powers, Executive Vice President and Managing Director, International, Epsilon 4. The brand relationship in China is based on and involves information, availability, customization, and the consumer’s social and influence group. Alongside habits of research and exploration, there exists a vibrant Word-of-Mouth culture. High percentages of consumers said they would share their brand experience with friends and family (65%), share with friends on social media (60%) and post positive comments online (58%). Similarly, among factors for brand satisfaction, 64% of consumers rated these two group-oriented choices, “my friends interact with the brand too” and “I can post comments online,” as important. What other factors are important to your brand satisfaction? 64% My friends interact with the brand too I can post comments online How would you most likely share brand experiences? Share with friends and family Share with friends on social media Post positive comments online The always-on Chinese consumer experience 6
  7. 7. Wired and happy Respondents tell us they interact most frequently with brands in eCommmerce (42%) and Technology (35%), providing us with a lens through which to understand consumer experience in China overall. That is, by providing the place to research and purchase all manner of goods and services, the website and the phone are enshrined closest to the hearts of China’s consumers, comfortably outranking the brands of products themselves. This finding is consistent with Epsilon’s Spring 2015 report which found that 61% of survey respondents pledged their loyalty to e-commerce brands, far more than the number of respondents who said they are loyal to a retail or consumer brand. Gone are the days when China’s retail landscape was dominated by single brand shops like Nike or Christian Dior. Shoppers in China now spend end their time where they can wander at will through a digital universe that has, quite literally, everything. Clothing and Shoes, where fashion and function meet, was ranked third, with 25% of consumers telling us they interacted most frequently in this sector. In fourth place, where sustenance and social life meet: Food & Beverage, with 21%. A picture emerges in which shoppers are closest to the brands that serve a desire to explore and enjoy. Chinese interact most frequently with brands in: eCommerce Technology Clothing Food & beverages 42% 35% 25% 21% The always-on Chinese consumer experience 7
  8. 8. Brands interacted most often – by sector 25% Clothing/ Shoes 1. Nike 9% 2. Adidas 5% 3. LI-NING 2% 21% Food & Beverages 1. Coca Cola 5% 2. Master Kong 4% 3. Mengniu Dairy 2% 13% Skincare/ Cosmetic/ Personal Care 1. Blue Moon 1% 2. P&G 1% 3. L’oreal Paris 1% 1. Haier 2% 2. Midea 2% 3. GREE 1% 42% Website/ eCommerce 1. Taobao 19% 2. JD 12% 3. QQ 10% 35% Technology 1. Apple 14% 2. Samsung 12% 3. HUAWEI 5% 1. Alipay 2% 2. ICBC 1% 3. China Merchants Bank 1% 1. Wechat 5% 2. Weibo 1% 1. BMW 1% 2. AUDI 1% 3. Volkswagen * 1. China Mobile 3% 2. China Telecom 2% 3. China Unicom * 1. KFC 5% 2. McDonald’s 3% 3. Starbucks 1% 1. Carrefour 2% 2. Wal-Mart 1% 3. WU MART 1% 10% Household Electric Applicances 6% Financial Services 6% Social Networking 10% Restaurants 6% Grocery/ Supermarkets 5% Automotive 5% Tele- communication Q1. Please name and rank the top 3 brands/companies that you have the most interactions with in the past 12 months. (open end question) Weighted base: All respondents (N=1019) Note: *Denotes less than 0.5% Show sectors with 5% or above only The always-on Chinese consumer experience 8
  9. 9. Overall satisfaction with top 3 brands – by sector Regardless of sector, the vast majority of consumers in China are very satisfied with their favorite brands. All twelve out of fourteen sectors covered by Epsilon’s research fielded brands that at least 66% of consumers were satisfied. Above all sectors, though no surprise to anyone who has followed the meteoric and sustained rise of WeChat, social media shone with a satisfaction score of 84%. Q2. Based on your experiences interacting with these brands/companies, please rate your overall satisfaction with each of these 3 brands/companies. Please use a scale from 1 to 10 where 10 means “very satisfied” and 1 means “not at all satisfying”. Weighted base: Respondents who mentioned top 3 interacted brands in respective sector Note: Show satisfaction (T38) % for categories with n >30 Social Networking 84% Skincare/ Cosmetic/ Personal Care 80% Website/ eCommerce 76% Technology 74% Automotive 74% Shopping Centres/ Department Stores 74% Food and Beverages 71% Grocery/ Supermarkets 71% Clothing/ Shoes Retailers 70% Household Electrical Appliances 69% Restaurants 67% Tobacco/ Alcohol 67% Financial Services 64% Tele- communication 54% The always-on Chinese consumer experience 9
  10. 10. Star brands: Taobao, Apple, and their rivals When asked what brands they interact most with, consumers put Taobao on top. Named by 19% of respondents, the Alibaba-owned eCommerce platform surpassed second place Apple, which was named by 13%. Just behind, rival eCommerce brand JD and Samsung, Apple’s competitor, tied for the third place. With astonishingly high satisfaction scores, domestic tech, eCommerce and social media companies Huawei (84%), WeChat (82%), and Tmall (82%) led the pack. In this landscape where electronic platforms are so critical, advantage goes to domestic companies for both regulatory and cultural reasons. Yet the growing love for Chinese brands seems to be a broader trend. A total of eight domestic brands rank in satisfaction scores of 75% or higher, beating out Samsung, Coca-Cola and KFC. Brands Chinese interact most frequently with Brands with high satisfaction score Taobao Apple JD Samsung Huawei Wechat Tmall 84% 82% 82% 19% 13% 12% 12% The always-on Chinese consumer experience 10
  11. 11. China’s sprawling eCommerce landscape Epsilon data uncovered that online-savvy Chinese consumers interact regularly with an average of 3.4 different eCommerce brands. Why do consumers shop across multiple online stores instead of gravitating to a single platform? Let’s look at differences among the major players. Taobao Alibaba, which commands over 35% of C2C and the vast majority of B2C eCommerce in China, offers multiple platforms catering to different consumer needs. Somewhat like eBay, Taobao.com is an open and relatively unsupervised market where small and large vendors sell virtually anything a shopper could desire. Tmall is Taobao’s sister site, where shoppers go for product authenticity and quality – for example to purchase an Apple product. Tmall is not to be confused with Tmall Global, which only accepts foreign merchants who ship products to Chinese buyers from overseas. JD Jindong (JD.com) hosts thousands of official, tightly regulated B2C storefronts – from Adidas to Louis Vuitton – constituting roughly 20% of the B2C market in China. Jindong is positioned like the Chinese equivalent of Amazon, a small player in China. Online shoppers know that JD tightly polices stores to eliminate counterfeits and offers excellent after-sales service. Although still significantly behind Alibaba’s sales, Jindong’s revenues doubled over the past year in part due to its commitment to sell genuine items online. Still, JD has a long way to catch up to Taobao and Tmall. Vertical platforms Chinese shoppers seeking a wide selection of products within a certain sector turn to dozens of vertical platforms. Students buying books at the beginning of the semester often opt for DangDang, whereas moms stocking up on food and supermarket products browse Walmart- invested Yihaodian. Suning, known traditionally for their brick-and- mortar stores, have become the go-to online platform for appliances and home electronics. Other popular platforms include Vancl and Gome. Niche platforms Chinese shoppers access numerous niche platforms for specialty shopping services. For example, Wanpinghui (VIP.com) is popular with luxury shoppers seeking deep discounts, closing sales and after-season markdowns. Yixun is the go-to site for electronics shoppers who rely on product reviews shared by past buyers. The site also uniquely offers a unique trade-in program. Chinese consumers interact regularly with an average of 3.4 different eCommerce brands The always-on Chinese consumer experience 11
  12. 12. Website/ eCommerce QQ 78% Iqiyi 78% JD 76% Baidu 78% Tmall 82% Taobao 76% Youku 73% Note: Show satisfaction (T38) % for categories with n >30 Certain non-tech, non-Chinese brands still succeed in delighting Chinese consumers. Global consumer marketing giants Adidas and Nike, both in their third decade of selling in China, scored well. Still, marketers in pursuit of deeper engagement with Chinese consumers will need to consider programs that align with the brightest performing brands: dominant Chinese eCommerce, social media, websites, and device companies. Technology Lenovo 72% Samsung 71% Apple 79% HUAWEI 84% Mi 62% Q2. Based on your experiences interacting with these brands/companies, please rate your overall satisfaction with each of these 3 brands/companies. Please use a scale from 1 to 10 where 10 means “very satisfied” and 1 means “not at all satisfying”. Weighted base: Respondents who mentioned top 3 interacted brands Restaurants KFC 70% Social Wechat 82% Clothing/Shoes Nike 74% Adidas 77% Satisfaction – brands with the most interaction Telecommunication China Mobile 52% Food & Beverages Master Kong 47% Coca Cola 73% The always-on Chinese consumer experience 12
  13. 13. Setting the “Always-on” Standard It’s important to look carefully at the factors behind these high scores to find ways that marketers in all sectors can create more satisfied customers. As caveat, however, where eCommerce platforms and technology brands have such a hold on China’s consumers, it’s also likely that the experiences they deliver are setting the standard for satisfaction in the market overall. Respondents were asked to rate 12 factors for satisfaction. Among them, we might have expected “has good product and service” and “has safe product” to top the list. But these placed as the fourth and fifth most important factors. The factor considered important for brand satisfaction by the largest number of respondents, at 69%, was “available whenever I need them.” This finding confirms how the always-on experience provided by eCommerce companies is shaping expectations for all brands. There were two other factors that Chinese consumers said were more important than quality, service, and product safety: those are “consistent experience” (68%) and “fun, entertaining interaction” (67%). In many ways, these top three factors anchors the formula that China’s top websites, including eCommerce platforms, have mastered. Factors considered most important for brand satisfaction: Look again at the brands that won satisfaction scores over 75%: search engine Baidu (78%), portal QQ (78%), entertainment site iqiyi (78%) and streaming video site YouKu (76%) – all of them deliver in the top three areas named by survey respondents for high satisfaction. A clear takeaway from the data on brand satisfaction: for any brand chasing the hearts of Chinese consumers, write a sticky note for the side of your monitor that says, “Be always on, be consistent, be fun.” available whenever I need them consistent experience fun, entertaining interaction 69% 68% 67% The always-on Chinese consumer experience 13
  14. 14. Factors for being more satisfied in interactions with brands/companies with most satisfying experience (top 3 boxes) Has good customer service/support 65% Fun/entertaining interaction 67% Consistent experience 68% Is available when I need them 69% Always find what I want/need online 61% Could leave comments/reviews on its website 64% My friends also interacts with them 64% Makes safe products 65% Communication received are personalized to my needs 56% Knows me and treats me as valued customer 56% Unique/distinct shopping experience 56% Respects my communications/message preferences 58% Has coupons or offers 55% Always reachable via online/offline channels 56% Like interacting via social media 56% Customized communication time and method 56% VIP perks and benefits for loyal customer 50% Customized offers and experience based on past purchases 51% Has positive online reviews 53% Earns rewards from purchase 53% My idol is its spokeperson 38% Personalized one-to-one customer service 48% Keep in touch through preferred channels 50% Earns rewards from interaction 50% Q3: What makes you more satisfied in your interactions with brands/companies? Please rate the following statements, using a scale from 1 to 10 where 10 means “very much agree” and 1 means “not at all agree”. Weighted base: Respondents who mentioned top 3 interacted brands The always-on Chinese consumer experience 14
  15. 15. What is everyone talking about? Social factors emerge strongly in the second tier, revealing how important it is for consumers to feel part of a movement. The 64% of consumers who say it’s important that “my friends also interact with (the brand)” are revealing key information about their social environments. Namely, Chinese consumers openly share experiences with their favorite brands. This is great news for marketers who can create the stories, activities, and campaigns that lend themselves to online and offline buzz. Another clue about the importance of talking about a brand is the high score (64%) given to “being able to leave comments online.” Consumers don’t just want a private experience of satisfaction, they want the option to be a tribe member, a critic, or an influencer. Our survey data shows that the highest income consumers emphasize these social factors even more intensely, giving scores of more than 70% to each. Highest income consumers emphasize social factors even more intensely than others, giving scores of more than 70% to each. The always-on Chinese consumer experience 15
  16. 16. Find out what your customers care about Data from our survey highlights differences among consumer segments. For example, respondents with an undergraduate degree placed greater importance on “respects my communication preferences”, “communications received are personalized to my needs” and “has VIP perks for loyal customers” than the respondents overall. Consumer satisfaction priorities vary by sector as well. In cosmetics and skin care, the scores for importance of “makes safe products,” ”knows and treats me as a valued customer,” “has coupons or offers,” “earns rewards from purchase” and “has customized offers based on past purchases” were 15% or even 25% higher than scores for any other sector. Finally, Chinese consumers do seem to rate special treatment or status, and economic incentives such as points or rewards, much lower than consistency and social aspects when they think about satisfaction. But at the same time, our data from this survey tell us that “personalized service” and “reward programs” work powerfully as tactics for customer acquisition. While our findings are rich with specific details for strategy and tactics, they are also consistent on an overarching theme, which is unique to China among North Asian markets: Chinese consumers openly welcome opportunities for brand interaction. Consumer satisfaction priorities vary by sector. The always-on Chinese consumer experience 16
  17. 17. Channels with most brand interactions – Cosmetic and skincare consumers In-store 86% Consumers’ touch point preferences for all sectors (average) “Consistent experience” ranks #2 in the factors that are important for brand satisfaction. Marketers need to create a consistent image, personality, and voice across every channel that the brand commits to, regardless of the media format and the type of engagement that media is best suited for. At the same time, consumers are interacting with their favorite brands by browsing the brand website (52%); shopping in stores (48%); checking out their advertisements (34%); shopping online at the brand e-store (30%): getting information about them from the internet (30%); shopping their products at eCommerce sites such as Taobao and JD (29%); engaging with them on WeChat (28%); and watching their videos online (25%). To make the best use of finite financial and creative resources, it’s wise to invest in a deep look at the channel preferences of the targeted sector and consumer segment. For appliance brands, consumers need to see the heft, the surfaces and constructions, the full competitor choice. So the brick-and-mortar in-store experience carries a much higher impact than the e-store, the company website, or an eCommerce site. Shopping for cosmetics and skin care – intensely personal, intimate, and expensive, requiring proof of performance and appeal to aspirations – calls on the consumer to weigh the pros and cons at many touch points. eCommerce 48% 43% 29% Advertised Anywhere 45% 34% WeChat 36% 28% Connect to your customers via the right channels Cosmetics and skincare consumers’ touch point preferences vs The always-on Chinese consumer experience 17
  18. 18. WeChat official Subscription account Email SMS / text message on mobile phone Mobile App Product review website Company website In-storeWeibo news feed Weibo official account QR code WeChat official service account Preferred channels to interact with the most interacted brands/companies 40% 27% 21% 21% 21% 21% 20% 19% 17% 16% 16% Q4. In what way(s) do you usually interact with the brand/ company that you interacted with the most? Please select all that applies. Weighted base: Respondents who mentioned top 3 interacted brands The always-on Chinese consumer experience 18
  19. 19. Rising sophistication: from brand encounters to brand relationship management Online shopping rules the hearts of sophisticated Chinese consumers, who want to be able to find and order anything, anytime. Yet more respondents picked In-store (40%) than any other channel as their favorite way to interact with brands. A closer look at the data points to in-store as a key channel for clothing and shoes, grocery, cosmetics, and appliance sectors. At lower incomes and education levels, and among Tier Two shoppers, although internet research on brands is common, in-store dominates. These consumers seek to encounter brands in person, picking up tactile and contextual cues that flesh out web-based descriptions. Middle income consumers spend more time seeking information online, especially through browsing of company websites, to understand brands. Higher income consumer experiences, by comparison, aim to manage their relationships with brands. By spreading their brand interactions over a wide variety of engagement behaviors such as seeking information on the internet, following brands on WeChat and Weibo, watching videos, and joining loyalty programs, the more sophisticated consumers seem to be scanning a higher volume and diversity of information. The overall pattern suggests a progression in which, as income rises, consumers develop skills to integrate brands into their lives, not only before and during purchases, but over the course of a longer engagement. 40%picked in-store as their favorite way to interact with brands The always-on Chinese consumer experience 19
  20. 20. Ways to interact with the most interacted brand – subgroups Q4. In what way(s) do you usually interact with the brand/company that you interacted with the most? (xx) Denotes “Total %” 35-44 years old Tier 2 region Check out their advertisements 39% (34) Get information about them on the internet 39% (30) Get information about them on the internet 38% (30) ≤ College education Shop in stores 58% (48) Undergraduate+ education Read email from them 23% (17) Watch their videos online 31% (25) Get information about them on the internet 36% (30) Shop their products at e-commerce sites like T-Mall, Jingdong, Amazon, etc. 34% (29) Use their mobile App 27% (22) Non-working status Shop in stores 64% (48) The always-on Chinese consumer experience 20
  21. 21. Ways to interact with the most interacted brand – subgroups SEC C IncomeSEC B Income Shop online at their e-store/website 42% (30) Shop their products at e-commerce sites like T-Mall, Jingdong, Amazon, etc. 39% (29) Engage with them on WeChat 36% (28) Watch their videos online 31% (25) Use their mobile App 28% (22) Read email from them 26% (17) Engage with them on Weibo 22% (15) Engage with their loyalty programs 21% (13) Browse their website 57% (52) Get information about them on the internet 39% (30) Shop online at their e-store/website 37% (30) Shop their products at e-commerce sites like T-Mall, Jingdong, Amazon, etc. 35% (29) Shop in stores 70% (48) Use their mobile App 29% (22) Q4. In what way(s) do you usually interact with the brand/company that you interacted with the most? (xx) Denotes “Total %” SEC A Income Get information about them on the internet 42% (30) Join their BBS forums 18% (10) The always-on Chinese consumer experience 21
  22. 22. The connection is in the details It may be true that Chinese consumers meet their preferred brands on multiple channels, but each channel, for each sector and segment, fills a specific role in the consumer journey. Most channels have multiple functions. In-store may be important for finding new products, for securing bargains, or for a shared brand experience. Mobile apps can deliver in depth brand or product information, video or other interactive content, exclusive offers and loyalty processing. Other channels have narrower functional range. For example, BBS forums create communities to share experiences, and online video is a tool to refresh brand image and showcase new products. Rich data on how consumers in different segments utilize different channels can be used to refine and sharpen marketing activities. Learning the channel preferences of a targeted segment up front helps streamline resource and creative processes. A few findings to illustrate. WeChat subscription accounts are more popular among consumers with an undergraduate degree when they interact in travel, financial services, consumer goods, eCommerce, luxury, and restaurant sectors. QR codes are likely to be more effective for travel companies marketing to middle and higher income consumers, or to middle income eCommerce users. Online videos see reasonable acceptance among high income consumers following clothing and shoe brands. Product review sites and mobile apps come into use for grocery and financial services sectors. Weibo news feeds and official accounts, WeChat official subscriptions and official service accounts, BBS forums, mobile apps, and product review websites; Tmall, Taobao, JD, and own-brand stores are among the numerous digital channels to understand and properly harness. Depending on the target, even the most well-understood brand assets – company website and email blasts – can be used for vastly different purposes: passive information or a call to action; service provided with full privacy and anonymity, or customized; content for purposes of encouraging social sharing or for collecting comments. Rich data on how consumers in different segments utilize different channels can be used to refine and sharpen marketing activities. The always-on Chinese consumer experience 22
  23. 23. One consumer, many ripples When Chinese consumers have a very good brand experience, they make space for more of the same. For brands accustomed to markets where even loyal consumers are aloof or very private (see Epsilon’s 2015 report What Loyalty Looks Like: Updating the Toolkit for Today’s Japan), the responsiveness of China’s consumers will come as a surprise. High percentages of our respondents, when asked how they respond to a very good brand experience, replied with enthusiasm: they would share with family and friends through social media and other channels; look to learn more about the brand; open more channels for contact – WeChat, mobile app, Weibo, email; and post positive comments online. The full embrace through researching, purchasing, following, commenting, and endorsing creates a powerful culture that integrates brands unapologetically into many aspects of a Chinese consumer’s life. This news ought to prompt brands accustomed to a more protective or private consumer culture to invest in one-to-one marketing strategies. Engagement Based on a Very Good Experience 63% Follow them on WeChat 49% Subscribe to the brands’ video channels 65% Search online/offline to learn more about the brand or their products/services 52% Post comments on the brand/company’s social media site 53% Subscribe to their email communications 63% Interact with brand/company more 52% Contact the brand/ company about the experience 58% Post positive comments online 57% Follow them on Weibo 66% Tell family & friends about the experience 60% Share the experience on social media with family & friends 62% Install their mobile APP 60% Buy more, even if less costly options are available Q8. If you have a very good experience with a brand/company, how likely would you do any of the following statements? Please use a scale from 1 to 10 where 10 means “very likely” and 1 means “not at all likely”. Weighted base: Respondents who mentioned top 3 interacted brands The always-on Chinese consumer experience 23
  24. 24. In the case of disengagement after a very poor experience, we expected that family and friends would hear all about it. Somewhat surprisingly, though, negative Word-of-Mouth occurs at significantly lower rates than positive Word- of-Mouth. The likelihood of posting negative comments on the brand’s social media site is 44%, compared to 52% for positive comments. When it comes to posting comments on other sites, the effect is more pronounced: 58% of respondents said they would be likely to post positive comments online, and only 38% said they would post negative comments. In general, the responses to a very poor experience are more likely to be private, for example reducing purchase frequency, stopping buying, or uninstalling a mobile app. Likelihood of posting positive vs negative comments on brand’s social media site and on other sites brand’s social media site 52% 44% other sites 58% 38% Negative commentsPositive comments vs The always-on Chinese consumer experience 24
  25. 25. Key takeaways for marketers 2. Make the most of your web and mobile storefronts In an always-on market like China, you website is not only your brand’s global storefront but also a portal to personalized service … and a platform for the experience that can make or break your brand. Just having a presence is no longer adequate. To ensure content is relevant, pinpoint how your site fits into the customer journey. Epsilon research finds that Chinese consumers visit brand sites early in their brand journey, switching to eCommerce platforms and brick-and-mortar stores only once they know a brand. Taking that on board, most brand sites should center on product education. To support iPhone-wielding Chinese consumers, brands also need to identify how their mobile site fits uniquely into the journey to purchase. More often than not, mobile content and services need to be distinct from what is provided on a brand’s desktop website. In this regard, web and mobile analytics are critical for understanding digital behaviors and developing strategies targeting the always-on Chinese consumer. Epsilon believes consumer and retail companies can master consumer experience in China for competitive advantage by focusing on several key areas. 1. Know which communications channels are used in your sector Consumers choose different channels for different purposes depending on sector. A few examples from our research: SMS, email and phone calls are better received when they are used for financial services; QR codes get a stronger response for restaurants than for any other product or service; mobile apps are a good fit for engagement with travel services. To make optimal use of marketing budget, use in-depth research findings to understand how each channel is used in each sector. The always-on Chinese consumer experience 25
  26. 26. 4. Collect and mine data to understand the consumer journey In China, brand engagement unfolds across the full spectrum of broadcast and interactive channels. Instead of investing in a one-stop asset, learn to manage – and frequently evaluate – interactions on several different platforms best suited to the evolving habits of your consumers. Data can be the secret ingredient in formulating a cross- channel engagement strategy to make happy customers. Use analytics to drill for data on each channel, correlate across channels to get the full picture, and then plan out your marketing to create an overall brand experience. Keep an eye on the big picture of overall experience: the ways in which consumers use each channel will evolve as new technologies and practices emerge. 5. Invite buzz, and make it fun! Chinese openly welcome opportunities to interact, associate, and affiliate with brands, and the impact of a positive experience ripples widely through the friends, family, and the online space of a happy customer. Keep in mind: Chinese consumers rate “fun” as more important for brand satisfaction than product safety or service; “My friends engage with this brand too” and “Can leave comments online” rank just behind product safety. Whether it’s on a Weibo account, a WeChat subscription, or a comment showcase in your online store, use something fun to invite Chinese consumers to share, discuss, critique or rave about your brand. Find out who your most satisfied consumers are and deploy a strategy of delivering a memorable experience to generate Word-of-Mouth. 3. Adopt an “always-on” mentality Chinese consumers have come to expect the anytime customer service pioneered by China’s top e-commerce players, especially frontline instant messaging and call center services. Rather than trying to recreate or outdo their service levels, adopt the tone and responsiveness as much as your company’s resources allow. The always-on Chinese consumer experience 26
  27. 27. epsilon.com About Epsilon Epsilon is the global leader in creating connections between people and brands. An all-encompassing global marketing company, we harness the power of rich data, groundbreaking technologies, engaging creative and transformative ideas to get the results our clients require. Recognized by Ad Age as the #1 Word CRM/ Direct Marketing Network, #1 U.S. Digital-Agency Network and #1 U.S. Agency from All Disciplines, Epsilon employs over 7,000 associates in 70 offices worldwide. Epsilon is an Alliance Data company. For more information, visit epsilon.com, email apac-info@epsilon.com or follow us on Twitter @EpsilonAPAC. Copyright2015©EpsilonInternational,atradingnameofAllianceDataFHC,Inc.Allrightsreserved.

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