The Convenience factor part I: Why Chinese shoppers are heading in-store

By Natasha Spencer

- Last updated on GMT

Convenient in-store shopping in China
24-hour services are adding value to urban Chinese consumer shopping habits, as Matthew Crabbe, Director of Research, Asia-Pacific at Mintel reveals that convenience stores are differentiating their products and services to remain competitive.

Market leading

Mintel data shows that convenience store retail sales have outpaced both supermarkets and hypermarkets, with a Compound Annual Growth Rate (CAGR) of 13.6% from 2011 to 2016.

However, “while recent growth in the convenience store market has been strong, convenience store chains must start to innovate as today’s consumers are seeking wider product and service ranges”,​ said Matthew Crabbe, Director of Research, Asia-Pacific at Mintel.

“They also want more localised and individualised service, and for store chains to respond quickly to their changing needs,”​ Crabbe added.

Convenient stores and their housed brands need to place the local community at the heart of cosmetics and personal care product selection, Crabbe went on to say: “There is a demand for convenience stores to fulfil a growing list of local community needs in order to differentiate, and improve customer retention.”

Purchasing factors 

Global market intelligence agency, Mintel, found 53% of consumers select product quality as a core factor in helping them make purchasing decisions. This was very closely followed by proximity (52%), with the range of products available in-store coming third (31%).  

The convenience of a store’s payment options and the speed of customer service were both ranked as highly influential in purchasing decisions by 24% of those asked.

In fact, these factors all outranked the importance of appealing promotions (20%) and loyalty schemes (12%).

Convenience appeal

With indie brands and emerging at-home start ups utilising online marketplace apps such as Alibaba, convenience stores are providing a fast and no-hassle solution.

Collecting and sending parcels is a popular service at convenience stores with 45% of those asked utilising this service in the past six months. This has seen the biggest rise in use amongst urban Chinese consumers, as this has almost doubled since 2015.

“Urban Chinese consumers are now enjoying more fast-paced lifestyles, creating an obvious rise in demand for convenience,”​ stated Crabbe.

“Additionally, consumers are increasingly embracing the convergence of online and physical retail store, as reflected by the increased used of services such as online account top-ups and delivery collection,”​ Crabbe commented.

With more products and services available, “this also creates more reasons for consumers to make return visits, helping convenience stores to become more competitive,”​ Crabbe continued.

Simple and local

Easy of use is vital in convenience retailing, with 49% of urban Chinese consumers preferring stores that allow visits 24 hours a day. Price points are also a key indicator of convenience stores visits, with 64% looking for cost-effective and basic items.

In the future, it is likely that China will witness the emergence of larger convenience stores as three out of four consumers are looking for bigger stores. In expanding, it is important to ensure convenience stores retain their local community-focus and ability to provide a quick service.

Additionally, 66% of shoppers are hoping to spot more overseas products to purchase. The connection between online and offline shopping is proving fundamental when it comes to selecting a convenient store to shop in, as 66% of buyers state that home deliveries are on a par with convenience store visits.

“Set within local communities, convenience stores really need to understand their customers’ preferences,” ​Crabbe highlighted.

As a result, “convenience store chain models are rapidly shifting towards the ‘new retail’ mode, in response to changing consumer behaviour”.

“The growth in developments in cashless and checkout-free stores could be an increasingly significant service trend for convenience stores to introduce,” ​Crabbe concluded.

The second part of this article will be published on Wednesday 9th August.

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