Consumer behaviour of Chinese

To understand the buyer decision making process the elements from psychology, sociology, cultural anthropology and economics should be defined. Answering these four elements shows of when, how, why and where people do or do not buy a product. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand peoples wants and needs. Consumer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer (Sensagent, 2012). A major question to understand consumer behaviour can be: ‘why is the study of consumer behaviour important?’. Studying consumer behaviour will help businesses to identify consumers’ needs and satisfy them more effectively than competitors. It makes a business’ marketing consumer-oriented, which is a key to succeed. Knowledge of consumer behaviour is not only useful for the company, but equally useful for middleman and salesman to perform their tasks effectively in meeting consumers wants and needs more successful.

Economic growth

To understand the sales, China will be compared with the United States. The sales in the example will be divided to retail sales and e-commerce sales. Retail sales are collected data of the sales of retail goods over a stated time period, typically based on a data sampling that is extrapolated to model an entire country. The e-commerce sales are all purchases made of goods and services over an electronic network, primarily the internet. Both sales methods are operating in all four market segments: business to business, business to consumer, consumer to consumer and consumer to business. In the figure below (figure 1), the retail sales and e-commerce sales are shown. 

Figure 1 Retail and e-commerce sales from China and USA in 2015

Visible is that the retail sales of China, compared with the United States, is more than U.S. $1,5 billion below. But since China’s opening up, China’s growth percentage reached an average of 13,2 percent from 2010 until 2016. Since China’s sales are still growing very fast, the e-commerce sales will representing a high-growth sector. Forbes (2016) is mentioning that the volume of online sales in China now exceeds that in the U.S., as shown in the figure above, and online sales are expected to grow 20 percent annually by 2020. Now China’s e-commerce sales will be growing fast, it will be important for other businesses to pay attention to the Chinese businesses as China’s new marketplace sellers are expanding internationally, leveraging their direct access to Chinese workshops and original equipment manufacturer (OEM) factories. Global consumer-goods players should be ready to face competition from Chinese small and midsize enterprises and microbusinesses selling directly through marketplaces in emerging economies.

Consumers in China

In the past decades, Chinese consumers’ shopping habits have changed dramatically, as indicated earlier. Their incomes have risen and new concepts and products have entered China’s market. The habits continue to evolve every day, and examining generations of consumers can reveal specific trends. Though increased wealth can change some preferences, most Chinese consumers’ habits are identified by their objective living conditions and limited earnings. The current Chinese consumer population can be separated into several groups with distinguishing characteristics, for example the ‘wealthy retired’ and the ‘new generation’. 

China's urbanization

As incomes seem to increase and the young generation becomes the main population of consumers, the Chinese will gradually turn from buying only the basics necessities to leading comfortable, high-quality lifestyles. US-China Business Council (2011) indicates that the following product categories will expand rapidly in the upcoming 5 to 10 years: toys, convenience foods, pet products, personal care products, wine and whisky, snack foods, health food and products, baby products, auto products and products for the elderly. 

Consumer behaviour Chinese outbound tourists

As the Chinese consumers income is increasing, they also find the possibility to travel abroad. Indicated is that the number of Chinese tourists travelling abroad is constantly growing and could be doubled in 2020 to reach 234 million of tourists, which means 100 million more than the year 2015. This new tourism wave will have several characteristics that can be listed. The new generation of tourists will not be travelling in groups; they want to travel independently. According the boom in the digital era in China, the tourism shape will shape China with an infatuation for booking their trips on internet through mobile, which is already 53 percent of the Chinese tourist travelling abroad. As they book their trip online, they also prepare their trip online. The most common platforms are WeChat and Weibo. Besides the developments according the increase of income, China’s government’s effort increases as well, as the government has developed all the means to attempt changing the behaviour of Chinese, to be adapted to other countries. The government appears to support its citizens to travel more abroad (Marketing China, 2016).

References
eMarketer Inc. (2016). US Retail Sales to Near $5 Trillion in 2016. [Retrieved from http://www.emarketer.com/Article/US-Retail-Sales-Near-5-Trillion-2016/1013368 on the 2nd of October 2016]

Forbes (2016). China’s E-commerce addiction has serious market potential. [Retrieved from http://www.forbes.com/sites/sarahsu/2016/07/16/chinas-growing-e-commerce-addiction/#7427205a3b01 on the 2nd of October 2016]

Marketing China (2016). Top 5 trends of Chinese outbound travel market for 2016. [Retrieved from http://marketingtochina.com/top-5-trends-chinese-outbound-travel-market-2016/ on the 2nd of October 2016]

Sensagent (2012). Consumer behaviour. [Retrieved from http://dictionary.sensagent.com/CONSUMER%20BEHAVIOUR/en-en/ on the 29th of September 2016]

Statista (n.d.). Retail e-commerce sales in China from 2014 to 2018 (in billion U.S. dollars). [Retrieved from https://www.statista.com/statistics/289734/china-retail-e-commerce-sales/ on the 2nd of October 2016]

Statista (n.d.). Retail sales in China from 2009 to 2016 (in billion U.S. dollar). [Retrieved from https://www.statista.com/statistics/295540/china-retail-sales/ on the 2nd of October 2016]

US-China Business Council (2011). Understanding Chinese Consumers. [Retrieved from http://www.chinabusinessreview.com/understanding-chinese-consumers/ on the 2nd of October 2016]

Vertical Web Media (2016). U.S. e-commerce grows 14.6% in 2015. [Retrieved from https://www.internetretailer.com/2016/02/17/us-e-commerce-grows-146-2015 on the 2nd of October 2016]