eCommerce Grows Among Rural Chinese & Easterners (Nielsen)

The second quarter Nielsen Global Survey, which includes the Global Consumer Confidence Index, had some interesting findings for consumer confidence and eCommerce trends in China. To begin with, a willingness to spend among rural Chinese consumers hit 47% in the second quarter – up 10 percentage points from past quarters. This resulted in a two-point rise in consumer confidence among rural consumers. In contrast, confidence in Tier 1 cities dropped one index point since the first quarter while consumer confidence index levels for Tier 2, 3 and 4 cities remained steady.

When Chinese consumers were asked why they believe now is the time to buy what they need, 25% of rural consumers cited “convenience of shopping” as the strongest factor for their buying behavior. Rural Chinese consumers also stressed that online shopping channels are dramatically making shopping more convenient plus it helps them to purchase items they don’t otherwise have access to. - Online Shopping Among China's Rural Consumers

Thanks to agreements between manufacturers and local governments, e-retailers have penetrated almost 20% of China’s rural population. And while the level of online shopping availability lags the national average of 42%, rural Chinese consumers say they are spending more online than the national average. Moreover, rural online spending growth stood at 64% in the second quarter – higher than the national average of 53%.

When it comes to what categories have higher penetration rates among rural consumers than Tier 1 consumers, Nielsen mentions the following:

  • Paternal and baby care products
  • Personal cosmetics
  • Tourism
  • Virtual service products

Their research suggests that the strength of these categories stems from a high degree of product assortment and availability that is now available online through eCommerce sites.

Meanwhile, consumers in Eastern China are making the transition from brick-and-mortar stores to eCommerce sites the quickest. The percentage of consumers there who say they are buying online instead of offline stood at 35% with 25% saying they purchase items online more than two times a month.

Nielsen research shows that Eastern Chinese consumers have an emphasis on buying day-to-day items, quality-of-life improvements and personal indulgences. Eastern Chinese consumers were also more willing to spend more on dining out (59%), clothing and apparel (53%) and home appliances (50%).

To read the whole article, Rural Consumption Knocks on City Doors in China in the Second Quarter, go to the website of Nielsen Company. In addition, check out our China closed-end fund list and China ETF list pages.

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