July 8, 2015, Beijing - CBRE recently launched its latest research report entitled Asia Pacific Consumer Survey - How We Like to Shop Online. The survey, polling 11,000 shoppers in 11 major markets, was conducted to identify current and future shopping trends in the region.
As the survey indicates, China is the most rapidly growing market for online shopping. Mobile shopping and social media are becoming increasingly prevalent as Generation Z rises as key buying force for the retail sector.
Focusing on the e-commerce sector, the survey reveals that online shopping is growing at a fast rate as the most popular method of purchase in many Asian markets. Consumers aged 18-24 - known as ‘Generation Z’ - are also set to play an influential role in the regional retail market in the coming years. As a result of factors such as these, landlords and retailers will need to be proactive in order to remain competitive.
China is the Most Rapidly Growing Market for Online Shopping; Over 70% Consumers utilizing Social Media to Buy
China is the most rapidly growing market for online shopping, with 45% surveyed indicating buying online at least once a week. Particularly in 3rd and 4th-tier cities, given the lack of quality retail space, online retail is often the most efficient way for retailers to reach their customers.
Mobile shopping and social media are becoming increasingly prevalent in China. Over 45% of consumers in China are purchasing via smartphones, a figure well above the regional average of 28%. The survey findings suggest that social networking activity has a significant impact on consumer behavior and China is an outstanding market with over 70% of consumers utilizing the social media platform to buy, representing the highest rate across the region.
Despite shopping online quite often, consumers in China (average US$26-50 on monthly basis) spend less compared to many other markets (average US$51-100 on monthly basis) such as South Korea，Hong Kong, Taiwan, Japan, Singapore, India and Australia in the region. This could indicate that consumers in China still prefer to purchase big-ticket items in bricks-and-mortar stores because of authenticity issues sometimes associated with the online marketplace.
“Driven by rapid growth in e-commerce in China, retail landscape is changing significantly. Landlords and retailers need to be more digital-savvy, keeping pace with the latest trends in smartphone applications and social media so they can build a stronger relationship with consumers especially those from Generation Z. These digital platforms are two essential mediums of online retailing, which should be integrated into retailers’ omni-channel strategies in order to capture Online-to-Offline (O2O) business opportunities,” comments Ivan Poon, President, CBRE China.
Online Shopping Habits in Asia Pacific:
Whilst 50% of Asia Pacific consumers still physically visit a shop to make a purchase, findings show that in emerging markets such as China and India, the majority of respondents - 76% and 68% respectively - utilize online shopping as their most commonly used method of making purchases. This is also the case in more developed markets of South Korea and Taiwan where 73% and 55% of consumers respectively, also said their primary method of making purchases is online.
Along with convenience, pricing ranks as one of the top reasons why consumers shop online—63% of the total number of respondents surveyed identified this as their key deciding factor. These correspond to the same deciding factors when shopping at physical stores.
The ability to compare products without having to physically visit individual stores is another key factor for the region’s consumers when shopping online. This trend is more prominent in emerging markets such as Vietnam (64%), China (61%) and India (58%) where quality shopping centers or shops are often located far from each other.
Generation Z: Shaping Market Dynamics for Retailer
Generation Z is expected to have significant influence over the retail market in the coming years as their income levels are set to increase rapidly upon joining the job market.
“Having spent most of their lives using the internet and other related technology, Generation Z’s demographic of consumers has distinct shopping behaviors in comparison to other demographic segments. Key aspects of their online shopping habits include stronger trust in online information; more activity on social media; and needing a sense of differentiation. These factors demonstrate the increasingly important role of technology in shaping the decision-making process of consumers,” comments Frank Chen, Executive Director and Head of CBRE Research, China.
In order to remain competitive in the digital age, retailers and landlords need to be proactive in reaching out and engaging with their consumers. Mobile shopping is most prevalent in emerging markets, and in many places, smartphones are the first - and sometimes only - point of internet access for many consumers, therefore, are playing a key role in driving the growth of online retail. Smartphone apps and social media platforms based on consumers’ shopping history, location and preferences can help personalize their shopping experience.
With around 70% of consumers in Asia Pacific collecting their online orders in-store - and 90% of them purchasing additional items when picking up their online order- click-and-collect services are also an effective way to drive in-store sales, creating a synergy between both online and offline platforms. Landlords should thus collaborate with tenants to help merge their online and offline offering by providing the necessary facilities and regular renovations.
Survey Definitions
The survey was conducted using online consumer panels. The findings therefore represent the emerging behavior of this important and fast-growing segment of all markets, but may not fully represent consumer behavior in markets with low online penetration. The survey is based on shopping trips for non-food items such as clothes, shoes, jewelry etc. but is referred to as non-food in this report.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
