Lower-tier cities drive boom in online shopping in China

Online shopping in China is booming during the coronavirus outbreak.

According to research house GFK, with twice the number of first-time users in lower-tier cities are moving online compared to the number living in top-tier cities.

The findings were part of a Gfk China consumer sentiment study conducted last month, which showed that more than 40 percent of consumers have increased their frequency of buying online. Greater numbers of consumers are also shopping across multiple platforms, using third-party applications, brand websites and WeChat community shopping.

The boom has caused significant operational and logistical challenges for retailers trying to keep up with the surge in demand, including delivery delays and out of stocks.

“While China is already at the forefront of e-commerce and retail innovation, the current situation would further accelerate digital commerce adoption among consumers and will have a long-term impact on consumer purchase behavior,” said GfK China and India MD Vishal Bali.

“Chinese consumers are likely to adopt more options to consume content and purchase products and services online, including e-learning, online healthcare consulting or buying products through social commerce and third-party apps. Therefore, brands need to also explore newer commerce platforms, payment methods, delivery options and loyalty programs to connect with consumers across all city tiers and create a seamless shopping experience for them,” he said.

The research relating to online shopping in China showed many consumers intend to delay the purchase of big-ticket items such as consumer electronics until after the outbreak passes, preferring instead to buy products to protect their health and wellbeing.

Most Chinese consumers are expecting the economy to recover before the third quarter of this year.

After the epidemic, approximately 60 percent of consumers with high incomes plan to spend more to reward themselves, while 70 percent of consumers in the low- to middle-income groups intend to save money by reducing overall expenses and only spending on essential items.