Consumers in mainland China and Hong Kong see quality of product or service as key purchase driver amidst evolving situation with COVID-19, KPMG report finds
HONG KONG,Sept. 30,2020 -- 'Quality of product or service' is now identified by most consumers in mainland China (66%) and Hong Kong (67%) as the top attribute when making a purchase,surpassing 'value for money' which was the most important purchase driver at the start of the COVID-19 pandemic,according to a KPMG global survey.
KPMG's second Consumers and the new reality: COVID-19 pulse survey reportanalyses how consumers' behaviour,expectations and interactions with organisations across different sectors have changed with the evolution of COVID-19 since the first report was published in July. The latest analysis is based on data collected between 29 May and 24 August 2020 from the first five of six waves of ourconsumer pulse survey,covering over 12,000 consumers across 12 markets,including 950from mainland China and 1,037 from Hong Kong.
Compared to the Wave 1 analysis conducted in July,consumers have since lost some confidence in resuming normal activity as they evaluate the impact of COVID-19 in their daily lives,viewing the effects of the pandemic to be more long-lasting. More consumers in Hong Kong and mainland China expect the impact of the pandemic to last for one year or more,with 59% and 44% of those surveyed indicating so in the latest analysis,compared with 50% and 29% recorded respectively in the Wave 1 report.
Among all surveyed markets,consumers in the mainland China are already among the most likely (41%) to return to their pre-COVID-19 habits but with extra caution,and only 13% think the pandemic situation will last more than a year.
Jessie Qian,Partner,Head of Consumer and Retail,KPMG China,says: "With pandemic restrictions now being lifted,financially able consumers in mainland China are prioritising expenditures in eating out,holidays in the country and other leisure activities and re-thinking their spending patterns in the future. Most Chinese consumers are however more selective with all their purchases now. Retailersneed to provide compelling reasons as to why customers should make purchases in the short-term."
With the expectation of a longer lasting impact from COVID-19,consumers are starting to think about their financial future. Banking customers,more than ever,want to feel in control and for their banks to understand them,with the highest percentage of respondents from mainland China (66%) asking banks to offer tailored products and services to their personal circumstances,and 43% of Hong Kong consumers asking banks to provide personalised analysis of spending patterns. In terms of overall spending,30% of Hong Kong consumers and 25% of mainland China consumers indicate they will spend less than before in the next 6- 12 months.
While the percentage of those who are inclined to stay at home has declined from 16% to 12% in mainland China,the percentage has increased significantly in Hong Kong from 20% to 33% in the latest analysis,and the number of those who indicate they will avoid any public spaces also increased from 33% to 39%,making Hong Kong the most cautious market of all. At the same time,Hong Kong sees the biggest growth (33%) in net grocery expenditure of all markets,followed by mainland China at 24%,and compared to 11% growth recorded globally. Consumerspending increases on groceries reflect the necessity faced by many customers to consume more at home. The survey also shows the percentage of those in mainland China who indicate they buy online regularly after COVID-19 has increased from 49% to 59% since the Wave 1 report.
Anson Bailey,ASPAC,says: "Home has now become the new hub,where work,entertainment,study and socialising activities take place. With digital the undisputed channel of growth and being a key way to meet customers' new expectations,brands must ensure their online offerings are easy to use and integrate seamlessly with their overall omni-channel offering."
Mainland China stands out as being exceptionally trusting of organisations at this time,with net trust across all sectors up 27% versus pre-COVID-19,while globally net trust has declined to -4 percent,Hong Kong is -9%,and all other markets also see a negative net trust compared to before the pandemic. Trust in the brand continued to be identified by more than half of the consumers in mainland China and Hong Kong as important to them when buying a product or service.
Alice Yip,Head of Consumer and Industrial Markets,Hong Kong,KPMG China,says: "Trust is driven by retailers demonstrating the same values that customers hold themselves. Customers are expecting retailers to focus even more on protecting customer safety. Organisations need to clearly communicate and demonstrate their ongoing commitment to rebuilding trust."
About KPMG China
KPMG member firms and its affiliates operating in mainland China,Hong Kong and Macau are collectively referred to as "KPMG China". KPMG China is based in 26 offices across 24 cities with around 12,000 partners and staff in Beijing,Changsha,Chengdu,Chongqing,Foshan,Fuzhou,Guangzhou,Haikou,Hangzhou,Jinan,Nanjing,Ningbo,Qingdao,Shanghai,Shenyang,Shenzhen,Suzhou,Tianjin,Wuhan,Xiamen,Xi'an,Zhengzhou,Hong Kong SAR and Macau SAR. Working collaboratively across all these offices,KPMG China can deploy experienced professionals efficiently,wherever our client is located.
KPMG is a global network of professional services firms providing Audit,Tax and Advisory services. We operate in 147 countries and territories and have more than 219,000 people working in member firms around the world.The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"),a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. In 1992,KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership,as of 1 August 2012. Additionally,the Hong Kong firm can trace its origins to 1945. This early commitment to this market,together with an unwavering focus on quality,has been the foundation for accumulated industry experience,and is reflected in KPMG's appointment for multidisciplinary services (including audit,tax and advisory) by some of China's most prestigious companies.
