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The Mainland Cities of the Greater Bay Area (4) : O2O Shopping Preferences

11 May 2020



Today, with the ubiquity of online shopping, consumers can buy practically anything they need without leaving their homes. As a result, the issue of how to market products and services to consumers via online channels while still being able to take advantage of business opportunities from offline channels has become very important to industry players. A survey conducted by the Hong Kong Trade Development Council ( HKTDC )[1]found that online shopping platforms, WeChat and short-video sharing platforms have the greatest influence on consumers in the nine mainland cities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). The survey also discovered that in recent years the number of female and young consumers getting information about products and shopping via second-hand trading platforms and consumer experience sharing platforms has been increasing. As for offline sales channels, consumers still visit shopping malls or physical stores regularly, about once a week on average. Consumers visit shopping venues to dine out, experience the products they are considering buying, take part in recreational and leisure activities, and receive services. The function of physical stores has shifted from being purely a place to shop to being a centre for recreation, leisure, and information on the latest trends. This means that various kinds of offline stores are still attractive to consumers.

Mobile-centric Living

A mobile phone has become a daily necessity for many people. On the mainland, a large number of mobile apps already offer a shopping function or are being used as marketing and sales channels. A host of such channels are now available to industry players looking to reach consumers. According to the survey, online shopping platforms such as taobao.com and jd.com have the greatest influence on consumers’ purchasing decisions, with 71% of respondents citing them, followed by WeChat on 57%. 51% of respondents also said short-video sharing platforms like douyin and kuaishou have an impact on their buying decisions. These three types of mobile apps are popular because of their extensive coverage and their relevance to people’s daily lives.

Comprehensive online shopping platforms not only offer consumers the convenience of a wide range of products, their apps also feature functionalities such as direct interaction with the seller and live-stream promotion so that the consumers can learn more about a product before placing an order. WeChat is the most popular social media app with mainland consumers, and it is also the most widely used promotional tool in China’s social media retail[2]today. Through WeChat Moments , consumers can view the various products recommended or put up for sale by their friends. Many businesses even set up WeChat mini programs and official accounts so that consumers can directly access their official website to place orders and get the latest product information.

Your browser does not support the video element.

Short-video platforms have now become the most popular mobile app with consumers looking to kill time. Many merchants and individual video producers insert ads in the short videos either before or during the streaming. These apps also feature hyperlinks luring the consumer to shopping websites.

If businesses want to reach consumers via online channels, they must understand how mobile apps and social media are being used for promotion on the mainland and make use of them effectively. For example, they must provide detailed product information on online shopping platforms, make use of WeChat to engage more customers, and release interesting videos on short-video platforms.

Chart: Mobile Apps That Influence Consumption Decisions

Mobile Apps Growing Fast

In recent years, as consumers have become more receptive to used-goods trading, the number of second-hand trading apps has mushroomed. These second-hand trading platforms not only allow users to buy products, but also to sell their personal articles. 64% of respondents in the survey agreed with the statement that “second-hand trading platforms can help me sell things that I don’t need any more”, the majority of them being young and earning a low monthly household income. 70% of respondents in the 26-30 age group and 75% of those with a monthly household income of below Rmb8,000 held this view. Second-hand trading platforms such as Xianyu , Paipai and Zhuanzhuan are most favoured by young consumers selling their unused articles or searching for rare items (e.g. special edition sports shoes). Because the number of second-hand trading platform users is rising, some individuals and micro-sized businesses have started to use them to sell new products as well. 42% of respondents in the survey said their buying decisions were influenced by group-buying or second-hand trading platforms. This means that industry players should consider raising their exposure by offering discounts or selling niche products on these platforms.

The influence on consumers of social media - in particular Weibo and consumer experience sharing platforms such as Xiaohongshu - is also worth noting. The survey found that female respondents and young respondents were much more likely than others to be influenced by Weibo and consumer experience sharing platforms in their buying decisions. 47% of female respondents indicated that consumer experience sharing platforms could influence their buying decisions, as opposed to 18% of male respondents. 39% of respondents in the 26-30 age group said Weibo had an impact on their buying decisions, compared to 29% of their counterparts in the 41-45 age group. During a consumer focus group discussion, one female participant said: “I find the information on Xiaohongshu very detailed. Other users of this platform make suggestions on overseas travel with text, photos and videos, including details such as recommended tourist spots and restaurants, and the best means of transportation to take.” Product and service providers targeting female consumers should consider using Weibo and consumer experience sharing platforms to promote their offerings. 

Attitude Towards Second-hand Trading Platforms, by Gender and Age (Agree Rate* %)

 

Overall

Gender

Age

Male

Female

26-30

31-35

36-40

41-45

No. of respondents

2,160

1,080

1,080

540

540

540

540

Second-hand trading platforms can help me sell things that I don’t need any more

64

64

64

70

67

59

62

* Strongly agree or somewhat agree

Base: All respondents (n = 2,160)

Attitude Towards Second-hand Trading Platforms, by Monthly Household Income (Agree Rate* %)

 

Overall

Below Rmb 8,000

Rmb 8,000-14,999

Rmb 15,000-24,999

Rmb 25,000-39,999

Rmb 40,000 and above

No. of respondents

2,160

96

1,029

682

224

129

Second-hand trading platforms can help me sell things that I don’t need any more

64

75

67

61

59

64

* Strongly agree or somewhat agree

Base: All respondents (n = 2,160)

Mobile Apps Influencing Product/Service Buying Decisions, by Gender and Age (%)

 

Overall

Gender

Age

Male

Female

26-30

31-35

36-40

41-45

No. of respondents

2,160

1,080

1,080

540

540

540

540

Online shopping platforms (e.g. taobao, JD)

71

70

71

74

72

67

70

WeChat

57

56

58

59

55

60

53

Short-video sharing platforms (e.g. douyin, kuaishou)

51

50

52

52

55

51

46

Group buying or second-hand trading platforms (e.g. meituan, xianyu)

42

43

42

43

44

41

41

Weibo

34

31

37

39

37

31

29

Consumer experience sharing platforms (e.g. xiaohongshu)

33

18

47

37

36

26

31

Online review platforms (e.g. mafengwo, dianping)

32

33

32

32

32

34

31

Live streaming platforms (e.g. taobaolive, douyu, huya)

32

31

34

35

36

30

29

Jinri Toutiao

29

30

28

26

30

31

28

Base: All respondents (n = 2,160)

Store Advantage: Product Experience

With the emergence of online sales channels, consumers can now obtain product information and make purchases whenever and wherever they want. Because of this, the role of bricks-and-mortar stores has changed. The survey found that 59% of respondents used O2O (online-to-offline) for shopping - that is, they would choose the product online first, visit a store to get a feel of it, then go back online to make a purchase. 51% of respondents said they would visit a store first to get a feel of the product before going online to buy it.

The number of respondents buying products at a store is significantly smaller. 36% of respondents said they would choose O2O shopping and “get a feel of the product at a store first, then make a comparison online before going back to the store to make a purchase”. 22% of respondents said they would go online first to check/compare a product before visiting a store to make a purchase. There is no marked difference in the percentages of respondents from different backgrounds opting for O2O shopping.

These findings show that physical stores are the main choice for consumers wanting to get a feel of the product before they buy. Although shopping websites offer many functions which help buyers better understand a product, the advantage of in-store shopping in offering consumers experience of the product in person is irreplaceable. One of the participants in a consumer focus group discussion said: “By visiting a store, I can see the details of the product, such as the material and cut of a garment or have experience of using an electronic product.” Businesses planning to open stores in the nine mainland GBA cities are advised to ensure they can offer customers a relaxing environment to experience the product, and employ sales assistants who can clearly explain the product and brand concept to customers.

Chart: O2O Shopping Preferences

Regular Visits to Stores

Consumers in the nine mainland GBA cities visit shopping malls or physical stores to try out or get a feel for the products they want to buy, and also to enjoy different kinds of services. 59% of respondents said one of their main reasons for visiting shopping malls or physical stores was to eat at a restaurant. 54% (and 61% of female respondents) gave experiencing products or obtaining information on the latest trends as one of their main reasons. 52% opted for shopping, 51% for engaging in recreational and leisure activities and 49% for receiving services. The numbers saying one of their main motives was to meet friends and relatives (29%) or to go window shopping (20%) were significantly lower. Respondents with a higher monthly household income tended to take part in more consumption activities (rather than meeting friends and relatives or going window shopping). There were no big differences in the reasons given by respondents of different age groups and living in different cities.

Chart: Main Reasons for Visiting Shopping Malls or Physical Stores

The survey also found that the average number of visits paid by the respondents to shopping malls or physical stores was 1.08 times a week, with female consumers (1.21 times a week) and young consumers aged 26-35 (1.16 times) recording higher frequencies. One of the focus group participants said: “Every Sunday I go out with my family to shop, eat and have fun, this is our family activity.” There was no marked difference in the frequency of visiting shopping malls or physical stores among respondents earning different monthly household incomes and living in different cities. This shows that the role of shopping malls and physical stores has already shifted from being a venue for shopping to being a centre for recreation, leisure, experiencing products and getting information on the latest trends. Visiting shopping malls or physical stores regularly has become part of the routine of most consumers.

Frequency of Visiting Shopping Malls or Physical Stores, by Gender and Age

 

Overall

Gender

Age

Male

Female

26-30

31-35

36-40

41-45

No. of respondents

2,160

1,080

1,080

540

540

540

540

Average number of times of visiting shopping malls or physical stores a week

1.08

0.96

1.21

1.16

1.16

1.01

1.00

Base: All respondents (n = 2,160)

Offline Stores Can Attract Consumers

Consumers in the nine mainland GBA cities tend to spend time in areas where recreational and leisure facilities are plentiful, transport is convenient and special offline stores can be found. 46% of respondents in the survey cited the presence of “more recreational and leisure facilities”  as one of the main factors attracting them to a shopping mall or physical store. The same percentage opted for “more convenient transport”, while 45% chose “more one-stop household and daily goods shops”, 44% picked out “more shops with unique décor or special themes”, 42% went for “more branded flagship stores or experience stores” and 41% opted for “a greater diversity of restaurants and eateries”. Respondents in Guangzhou, Shenzhen and Dongguan were more likely than those in other cities to say that shopping malls or physical stores that offered more recreational facilities, more convenient transport and a greater diversity of restaurants and eateries were more attractive to them. During a focus group discussion, a participant from Guangzhou said: “To me, a shopping mall must have eateries such as bubble tea shops. Then I can window shop and have a drink at the same time.”

Features Attracting Consumers to Shopping Malls or Physical Stores (%)

 

Overall

Guangzhou

Shenzhen

Dongguan

Zhongshan

Zhuhai

Foshan

Huizhou

Jiangmen

Zhaoqing

No. of respondents

2,160

240

240

240

240

240

240

240

240

240

More recreational and leisure facilities

46

49

53

52

43

43

45

48

47

37

More convenient transport

46

49

55

53

39

42

49

43

45

40

More one-stop household and daily goods stores

45

49

49

45

38

46

44

43

48

43

More shops with unique décor or special themes

44

45

49

49

42

48

42

43

40

40

More branded flagship stores or experience stores

42

43

43

43

35

48

43

43

45

36

A greater diversity of restaurants and eateries

41

47

50

46

33

38

46

38

41

33

More shops offering personal services

38

37

40

39

35

41

39

38

39

35

More cultural and creative stores with unique characteristics

37

38

31

42

38

35

40

38

38

32

More international brandname stores

35

35

38

37

31

39

35

33

37

33

More facilities catering to children

29

31

30

35

31

22

36

25

30

25

More shops offering products and services for children

28

24

32

34

25

26

28

28

30

24

Base: All respondents (n = 2,160)

Female respondents are in general more interested in stores with unique décor or special themes as well as shops offering personal services. 48% of female respondents said that unique décor or special themes would attract them into a shopping mall or physical store, compared to only 41% of their male counterparts. 43% of female respondents said that “more shops offering personal services” was a feature that would attract them to a shopping mall or physical store, while just 33% of male respondents said the same.

Young respondents are more interested in leisure and recreational facilities. Among those in the 31-35 age group, 50% said “more recreational and leisure facilities” attracted them to go into a shopping mall or physical store, a significantly higher percentage than the 40% of respondents aged 41-45 who agreed with the statement. Respondents with a high monthly household income were in general more attracted by different kinds of special offline shops. 50% of those with a monthly household income of Rmb25,000-39,999 were attracted by shops with unique décor or special themes, as opposed to the 36% of those with a monthly household income of below Rmb8,000 who were similarly attracted. It is likely that the higher the income, the higher the desire to consume.  

Features Attracting Consumers to Shopping Malls or Physical Stores, by Gender and Age (%)

 

Overall

Gender

Age

Male

Female

26-30

31-35

36-40

41-45

No. of respondents

2,160

1,080

1,080

540

540

540

540

More recreational and leisure facilities

46

46

46

49

50

46

40

More convenient transport

46

48

44

48

45

47

45

More one-stop household and daily goods stores

45

46

44

43

46

46

45

More shops with unique décor or special themes

44

41

48

43

48

44

42

More branded flagship stores or experience stores

42

43

41

41

42

43

41

A greater diversity of restaurants and eateries

41

42

41

40

40

42

44

More shops offering personal services

38

33

43

36

36

40

40

More cultural and creative stores with unique characteristics

37

36

37

39

38

35

36

More international brandname stores

35

37

33

35

36

34

36

More facilities catering to children

29

29

29

28

35

32

23

More shops offering products and services for children

28

26

30

23

32

29

27

Base: All respondents (n = 2,160)

Features Attracting Consumers to Shopping Malls or Physical Stores, by Monthly Household Income (%)

 

Overall

Below Rmb 8,000

Rmb 8,000-14,999

Rmb 15,000-24,999

Rmb 25,000-39,999

Rmb 40,000 and above

No. of respondents

2,160

96

1,029

682

224

129

More recreational and leisure facilities

46

40

43

51

47

50

More convenient transport

46

48

42

51

44

50

More one-stop household and daily goods stores

45

35

45

46

46

49

More shops with unique décor or special themes

44

36

42

47

50

44

More branded flagship stores or experience stores

42

31

40

46

40

52

A greater diversity of restaurants and eateries

41

29

38

46

44

46

More shops offering personal services

38

28

36

39

40

53

More cultural and creative stores with unique characteristics

37

28

37

37

38

36

More international brandname stores

35

25

35

35

37

43

More facilities catering to children

29

16

28

31

33

36

More shops offering products and services for children

28

26

27

27

27

43

Base: All respondents (n = 2,160)

Taking all this into account, it’s clear that businesses wanting to take advantage of the offline consumer market in the nine mainland GBA cities should open shops in shopping malls or districts where recreational and leisure facilities are widely available and there are convenient transport facilities. They should also consider opening shops that offer customers unique shopping and service experiences, which can in turn attract more female consumers and young consumers. The findings of this survey also show that consumers in the nine mainland GBA cities are becoming increasingly attracted to various types of special offline shops. It is worth noting that while online shopping is becoming increasingly popular, bricks-and-mortar stores are still attractive to consumers.


Conclusion

The online and offline consumer markets in the nine mainland GBA cities are deeply integrated. While consumers have already become accustomed to going online to shop for their favourite products, they also visit physical stores to experience products and enjoy services. Hong Kong companies wanting to promote their products and services to consumers in the GBA should pay equal attention to both online and offline sales channels. As well as using popular online sales channels to promote their products, they should keep an eye on platforms that are becoming increasingly popular and reaching specific consumer groups, such as group-buying or second-hand trading platforms and consumer experience sharing platforms.

Although online shopping offers convenience, many consumers still like to visit physical stores to experience the products they are thinking of buying. Hong Kong companies planning to open shops in the GBA should consider creating a pleasant environment for customers where they can experience the products and get to know the corporate brand. As the spending power of consumers continues to rise, their demand for special offline shops increases. In view of this, Hong Kong companies capable of mapping out strategies using both online and offline marketing channels are likely to have a greater chance of seizing the huge business opportunities arising from the consumer market in the nine mainland cities in the GBA.


[1] For background information on this consumer survey, please see Appendix.

[2] Social media retail refers to a form of sales using one’s social circle to offer goods and services for sale.


Appendix

Survey Background

In the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area issued by the State Council in February 2019, nine cities in Guangdong province (Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing), as well as the two special administrative regions of Hong Kong and Macao, were designated to form the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), which is set to command an important strategic position in national development. Over recent years, the nine mainland GBA cities with their large population, have seen rapid economic growth and the average income of the residents is higher than the national average. This reflects the huge potential of the consumer market in the area. In light of this, the Hong Kong Trade Development Council (HKTDC) conducted a consumer market survey of the nine mainland GBA cities in order to gauge local people’s consumer sentiment, their attitude towards the consumption of different products and services, and their consumption preferences, characteristics and trends. Recommendations, based on the findings of the survey, are then made to Hong Kong companies to help them tap into the market of the nine mainland GBA cities more effectively.

Methodology

The present survey was carried out in November 2019 in the form of an online questionnaire. A total of 2,160 consumers in the nine mainland GBA cities were covered. Before conducting the questionnaire, two focus group discussions were held in the cities of Guangzhou, Shenzhen, Zhongshan and Huizhou to try to get a deeper understanding of consumers’ attitudes in the nine cities and thus provide a degree of qualitative analysis.

  • Design of the Focus Group Discussion

City

Guangzhou, Shenzhen, Zhongshan and Huizhou

No. of sessions

2 focus group sessions in each city (8 participants in each session)

Respondent profile

  • Guangzhou, Shenzhen: Monthly household income at Rmb15,000 and above, or monthly personal income at Rmb8,000 and above
  • Zhongshan: Monthly household income at Rmb9,000 and above, or monthly personal income at Rmb5,000 and above
  • Huizhou: Monthly household income at Rmb7,000 and above, or monthly personal income at Rmb4,000 and above
  • Have purchased medium- to high-end products (including imported food and beverage, technology products, affordable luxury products and cultural products etc) in the past six months
  • Have engaged in medium- to high-end consumer services (such as dining out, travel, cultural entertainment including plays and concerts, fitness exercise, education and training, health services) in the past six months
  • Shop online regularly, at least once a month
  • Access information via mobile apps on a daily basis
  • Have experience in buying wealth management products including structural wealth management products and insurance policies

Grouping

Group 1

Group 2

  • Consumers aged 26-35, single
  • 50% male, 50% female
  • At least 6 participants in the 26-29 age group
  • Consumers aged 36-45, married
  • 50% male, 50% female
  • At least 4 participants in the 36-39 age group
  • ​​​​​​​Design of Online Questionnaire Survey

City

Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing

No. of respondents

240 samples in each city, 2,160 samples in total

Respondent profile

  • Local residents aged 26-45
  • Guangzhou, Shenzhen: Monthly household income at Rmb15,000 and above, or monthly personal income at Rmb8,000 and above
  • Dongguan, Zhongshan, Zhuhai, Foshan: Monthly household income at Rmb9,000 and above, or monthly personal income at Rmb5,000 and above
  • Huizhou, Jiangmen, Zhaoqing: Monthly household income at Rmb7,000 and above, or monthly personal income at Rmb4,000 and above
  • Have purchased medium- to high-end products (including imported food and beverage, technology products, affordable luxury products and cultural products etc) in the past six months
  • Have engaged in medium- to high-end consumer services (such as dining out, travel, cultural entertainment including plays and concerts, fitness exercise, education and training, health services) in the past six months

Composition of samples


Male

Female

Age 26-30

30

30

Age 31-35

30

30

Age 36-40

30

30

Age 41-45

30

30

Total

240 samples in each city

  • Average Monthly Personal Income of Respondents

City

Average Monthly

Personal Income (Rmb)

City

Average Monthly

 Personal Income (Rmb)

Guangzhou

14,396

Shenzhen

12,835

Dongguan

10,640

Zhongshan

9,346

Zhuhai

9,890

Foshan

10,327

Huizhou

8,208

Jiangmen

9,094

Zhaoqing

7,581

Overall average

10,257

  • Average Monthly Household Income of Respondents

City

Average Monthly Household Income (Rmb)

City

Average Monthly Household Income (Rmb)

Guangzhou

24,188

Shenzhen

23,710

Dongguan

18,419

Zhongshan

17,594

Zhuhai

17,623

Foshan

19,269

Huizhou

14,546

Jiangmen

16,727

Zhaoqing

12,575

Overall average

18,294

  • Marital Status of Respondents (%)

Overall

Guangzhou

Shenzhen

Dongguan

Zhongshan

Zhuhai

Foshan

Huizhou

Jiangmen

Zhaoqing

Single

13

13

10

9

13

13

14

10

18

15

Married

87

87

89

91

87

87

86

90

82

85

Others

<1

<1

<1

<1

0

<1

0

0

0

0

  • Have Children or Not (%)

Overall

Guangzhou

Shenzhen

Dongguan

Zhongshan

Zhuhai

Foshan

Huizhou

Jiangmen

Zhaoqing

Yes

80

84

78

85

79

83

80

85

66

79

No

20

16

23

15

21

18

20

15

34

21

  • Education Level of Respondents (%)

Overall

Guangzhou

Shenzhen

Dongguan

Zhongshan

Zhuhai

Foshan

Huizhou

Jiangmen

Zhaoqing

Junior high or below

0

0

0

0

0

0

0

0

0

0

Senior high/ vocational/technical

2

1

2

3

4

2

2

4

2

2

College

16

13

23

14

12

15

11

19

17

16

University

74

74

68

78

79

73

76

71

75

75

Post-graduate or above

8

12

8

5

5

10

11

6

7

6

  • Occupation of Respondents (%)

Overall

Guangzhou

Shenzhen

Dongguan

Zhongshan

Zhuhai

Foshan

Huizhou

Jiangmen

Zhaoqing

Civil servant/public institution staff/teacher

7

9

4

9

5

7

5

8

7

10

Professional

12

14

8

10

9

19

9

9

13

18

Corporate senior management

7

6

5

4

7

5

10

7

9

9

Corporate middle management

35

45

43

38

38

36

32

24

33

28

Corporate general staff

27

17

30

25

30

24

33

34

25

26

Labourer/technical personnel

4

3

2

3

5

3

4

6

6

3

Service/sales personnel

<1

0

0

0

0

0

0

1

<1

0

Individually-owned business/ start-up business operator

4

3

5

6

2

2

5

8

3

3

Freelancer

3

4

3

2

3

2

3

4

4

1

Full-time homemaker

1

0

<1

2

1

2

0

<1

0

<1

Student

<1

<1

0

0

0

0

0

0

0

0

Unemployed/temporarily unemployed

0

0

0

0

0

0

0

0

0

0

Remarks: Figures may not add up to 100% due to rounding

BACK TO TOP ^
    Topics:
  • Mainland China,
  • Hong Kong,
  • online shopping,
  • wechat,
  • short-video sharing platforms,
  • second-hand,
  • Bricks-and-mortar Stores,
  • recreation,
  • leisure
  • Mainland China
  • Hong Kong
  • Hong Kong
  • Mainland China
  • Hong Kong
  • Hong Kong
  • Mainland China
  • Mainland China
  • Mainland China
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