With the growth of the modern retail trade, it is increasingly important for both manufacturers and retailers to understand the behavior of shoppers. Understanding what is driving changes in the choice of trade sector and specific retailers is critical in shaping strategies for future business success with your customers. Nielsen has updated its ShopperTrends study of shopper attitudes and behavior to answer those questions of shopper profiles, store attributes, shopper loyalty etc, providing insights into which customers may deserve greater focus and who are vital in developing the Category Management strategy.

The European Chamber is pleased to welcome Mr. Oliver Rust, Executive Director, Nielsen China. Oliver has over 10 years of experience in the market research industry when he began his research career with Taylor Nelson Sofres and spent 8 years in progressively more senior client servicing roles. He has also set up Consumer Panel Services in Russia, China and Hong Kong. In 2002, Oliver joined Nielsen as Regional Client Director in Greater China, managed the Retail Measurement Business in Taiwan for 3 years and recently returned to Shanghai as the Executive Director of Nielsen Integrated Services.

Agenda

08.00 08.30 Registration
08.30 09.10 Presentation by Mr. Oliver Rust
09.10 09.30 Q&A session

Registration

To register for this event, please email this form to Mr. Joao Gago at jgago@euccc.com.cn by Tuesday, August 7th, noontime. Confirmations and cancellations by phone are not accepted. Please note that cancellations should be done before August 7th, noontime.
No-shows who fail to cancel before this time will be invoiced for the event.
Registrations done after the deadline will be accepted only if space permits and are charged an additional 50 RMB walk-in fee.

Company:
Member of the European Chamber: Y ( )          N ( )
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Event review

Hypers to Hawkers - Consumer Behaviour in China

In the annual business confidence survey carried out by the European Chamber in the summer of 2006, it emerged that the number one reason for European companies doing business here was to ‘produce goods in China for the Chinese market’. This trend shows a clear move away from the traditional view of China as a production base for export towards China as a strategic domestic market.

In recent times the European Chamber in Shanghai has been organizing events to examine this important new market. In May, a seminar was held on market research, July saw a presentation on luxury brands. On August 9th, the Chamber was delighted to welcome Mr. Oliver Rust, Executive Director, Client Services, AC Nielsen China to deliver a presentation entitled ‘Hypers to Hawkers, Consumer Behaviour in China’

Mr. Rust began by saying that the changing socio-economic structure of China is dramatically affecting the amount of money people have, and the ways that they spend it. With the rise in personal income throughout the country there is then a corresponding growth in disposable income, leading a diversification in expenditure. In developed markets in the region, typically 25% of income is spent on food. The figure in China is still quite a bit higher, but it is expected to follow this trend. Investing in stocks and shares and exploring the world with foreign holidays are high on the list for those with some money to spend.

As with almost everything in China, there is an important need to understand the spectrum of wealth. It also just wouldn’t be a discussion about China without some talk about tiers of cities. What is interesting is that consumers in tier two and three cities are diversifying their expenditure more rapidly than the traditional markets of Beijing, Shanghai and Guangzhou did in previous years. Adding this to the uniqueness of the culture and tastes, it is crucial that retailers adapt accordingly. In retail, it would be naïve to have a ‘China-wide strategy’, the market is simply too large and diverse.

Focusing on the FMCG retail (fast moving consumer goods) trade Mr. Rust continued by highlighting how ‘Modern Trade’ (modern retail stores, hypermarkets, supermarkets etc) has fared in China thus far. Basically the retailers are doing extremely well. Frequency of visits already shows numbers that are higher than those in more developed markets (61% of those questioned said they had been to a hypermarket in the previous seven days). However since the market is so enormous, no one has secured a market share nationally of more than one percent, even the well-known big retailers, domestic or foreign.

‘With growing consumer wants and less time to shop, a one-stop-shop seen as increasing attractive to the new, modern urban dweller’, Mr. Rust stated. With the saturation of the larger established markets, location is no longer the key factor there as consumers demand a wide product range and modern comfortable stores. In the newer markets, second tier cities, proximity to home still remains the top factor when choosing where to shop.

There is a clear change in the structure of retailing, with the large hypermarkets leading the charge. Mr. Rust concluded by showing a number of ‘battle grounds’ that will determine how retailers succeed over the coming years. The key one is fresh produce. Wet markets still retain the upper hand here. Developing store loyalty will be important (56% of those surveyed said that they had visited three different retail outlets in the previous month, a relatively high figure). Of course, pricing structures and promotions will also play a significant role but other less obvious factors such as changing transportation methods, facilities for home storage and the possibility of online shopping will also affect how the FMCG market evolves over the coming years.

The European Chamber in Shanghai will continue to hold events on the topic to keep member companies up to date on the freshest challenges and opportunities in retail and distribution.

To view Mr. Rust's presentation, please  click here。

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