New research from Mintel has revealed how China is experiencing a fundamental shift in consumers shopping habits with per capita online retail spend to grow to 45.7% by the end of 2017.
China’s retail experience has consumers purchasing different products from different channels with online retail expected to reach 60% of total e-commerce sales in 2017 and mobile online retail expected to reach 80%.
Apart from alcoholic drinks (61% shop in-store) it’s revealed that in all other sectors the combined total of those who shop online is greater than the proportion who shop in-store.
One of the main drivers of online retail’s success is that 65% of urban Chinese consumers say they find products cheaper online, while 63% say that online offers more choice. More than half (52%) of consumers say they find what they were looking for faster when shopping online.
Matthew Crabbe, research director at Mintel said: “Mintel research reveals that online per capita spend in China is close to reaching a peak and there are a few reasons why this is happening. One issue is that consumers are increasingly buying experiences and services online, rather than products. The other issue is that consumers are already adapting to new retail; they are embracing greater integration between online and in-store shopping.
“This will mean much tougher competition between retailers. It will also likely mean more pressure for further consolidation in the market, resulting in more mergers, acquisitions and strategic partnerships.”
While in-store grocery shopping still dominates, 66% of consumers buy in-home food and drinks in-store, the average number of consumers who shop online for in-home food and drinks grew 3% since 2016, with nearly half (49%) buying in-home food online using a mobile device. Compared with 2016, mobile online shopping grew significantly across all sectors, according to Mintel research.
“The growth in mobile online shopping across all sectors this year illustrates how mobile is driving the convergence of online and offline shopping,” Crabbe added. “Meanwhile, online shopping penetration is high across most sectors. There may be room to expand fresh and luxury food product sales online, thus increasing the number of high-income consumers who shop online, but the room for expansion of share of pocket among China’s consumers is running out.
“Supermarkets and hypermarkets are moving away from just selling in-home foods towards providing catering services (so called ‘groceraunts’), as well as offering online food ordering and in-store pick up services. And convenience stores are morphing into unmanned, checkout-free, cashless, elaborate vending machines. We’ve also seen shopping malls evolve away from retail spots into theme park-like leisure developments.
“This is all leading to a very diverse potential retail environment that includes retail as part of a wider range of consumer services. Store functions will increasingly incorporate online-enabled, front-of-store consumer touch points for selling goods and providing other customer services—even ones not related to the retailer’s core business.”
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