According to a new report by consulting shop Yiguan 易观, consumers in China’s third-tier cities and below increasingly rely on product reviews and personal recommendations as a deciding factor in purchasing decisions. In a survey of 566 lower-tier city online shoppers:
- Respondents said that product reviews were the most influential factor in deciding whether or not to buy.
- They also said that they were much more likely to be influenced by person-to-person recommendations via friends (48.2%) or live-streaming video (38.9%) than in previous years.
- Users reported a big drop in the likelihood of being influenced by products shared via friends’ social media feeds.
The fact that buyers place heavy significance on reviews, ratings and recommendations isn’t news, and it isn’t specific to China (Podium in 2017):
93% of consumers say online reviews have an impact on their purchase decision.
What is interesting is why. Yiguan identifies a few primary characteristics of China’s lower-tier markets that they feel contribute to stronger reliance on personal recommendations:
- Weaker brand recognition: Less exposure to a variety of brands means buyers may not have formed their own opinions about new product they encounter, and may be more open to input from their person networks.
- Price sensitivity and lower income: We know that lower-tier city residents are gradually becoming less price sensitive and more focused on product quality, but price is still a major deciding factor. With less cash to burn (63% of lower-tier residents have between RMB 150-850 / USD 22-126 to blow online every month), consumers will want to be sure they’re getting the most bang for their buck.
- More time: In the absence of hectic urban schedules, shoppers have more leisure time to ask for, and get, product recommendations.
- Frequent offline purchases: A user base more accustomed to IRL shopping might be more likely to seek input before buying online.
Sources
Kendra Schaefer
