New consumer mindset evolves around the world
Ninety percent of Chinese consumers trust foreign brands over domestic, and shoppers in Brazil, India and China are significantly more likely than Americans and Canadians to use a credit card for something they can't afford, according to a global study of shopping behaviour and consumer loyalty by Colloquy.
The '2011 Colloquy Cross-Cultural Loyalty Study' study also found that Brazilians are far more concerned than Americans and Canadians about protecting personal information, while Chinese consumers are far less concerned than their North American counterparts.
Signs of significant growth potential for North American businesses aiming to enter rapidly developing economies were found along with the critical importance of businesses "localising" their consumer marketing approaches in these markets. The study revealed stark contrasts in optimism between three developed nations (the US, Canada, and Australia) and three emerging markets (India, China and Brazil). These contrasts underpin fundamental differences in sentiment in developed and emerging markets during a time when corporations are focused on strategies for stability and growth. The message is clear: even in markets with pent-up demand, consumers in emerging markets respond differently to new brands and product opportunities than do their counterparts in developed nations.
In the study, three T's: Tired, Turned Off, and Tuned Out, were used to characterise consumers in developed markets, where there is strong evidence of a new set of much higher expectations for innovation and reinvention among loyalty programmes. Conversely, the emerging market consumer sentiments can be summed up by three E's: Energy, Engagement, and Enthusiasm. However, despite this prevailing commonality in optimism, marked differences in perceptions about loyalty and shopping-related behaviours were detected.
Among the study's key findings when comparing developed and emerging markets:
- Foreign vs. domestic brands Shoppers in emerging nations are more welcoming of foreign brands and in some cases are more trusting of foreign/global brands. In China, nine out of 10 consumers say that global brands are more trustworthy than domestic brands. Chinese consumers are six times more likely than Americans to agree with the statement that competition from foreign companies is a good thing.
- Credit card usage China, Brazil and India consumers are five times more likely than U.S. and Canadian consumers to say they will use credit cards for "things you can't afford now".
- Privacy 68% of Brazilian consumers are concerned about protecting their personal information, compared with 50% of consumers in the United States and Canada. This far outstrips China, where just 33% of respondents said they are concerned.
- Brand Loyalty Defined Consumers almost universally define brand loyalty as telling friends or family to shop at a particular store, except in China, where loyalty is defined as shopping with a specific company for more than three years.
"We've entered into a period of great change and complexity, which is driving a critical need for clarity and direction. This study is an essential navigational beacon regardless of whether you're leading the charge for growth on foreign soil or in a market where growth is increasingly hard to mine," concluded Kelly Hlavinka, managing partner for Colloquy.