On the rise and online Female consumers in Asia An Economist Intelligence Unit report Commissioned by On the rise and online: Female consumers in Asia Contents Preface Executive summary Introduction Changing demographics, control over purse strings The shifting nature of retail 13 How women buy 18 Global vs local 23 Connecting with the new Asian female consumer 25 Barriers ahead? 29 Conclusion: What does the future of retail look like? 30 © The Economist Intelligence Unit Limited 2014 On the rise and online: Female consumers in Asia Preface On the rise and online: Female consumers in Asia, is an Economist Intelligence Unit report, commissioned by VIPSHOP The EIU conducted the survey and interviews independently and wrote the report Jonathan Hopfner and Liana Cafolla were the authors Laurel West was the editor Gaddi Tam was responsible for layout l Andreas Faahs, CMO and vice president, Amway Japan The findings and views expressed here are those of The EIU alone and not necessarily reflect the views of the commissioning organisation l Kamal Nandi, executive vice president and business head, Godrej Appliances We would like to thank all survey respondents and the following interviewees (listed alphabetically) for their time and insights: l Maximilian Bittner, CEO, Lazada Group l Hyon-Ju Cho, vice president and team leader, marketing service team, Samsung Electronics l Elisabeth de Gramont, group account director, Jigsaw Communispace l Jodie Ding, senior analyst, iResearch l Linda Du, Shanghai managing director, APCO Worldwide l Devangshu Dutta, chief executive, Third Eyesight © The Economist Intelligence Unit Limited 2014 l Leta Hong Fincher, author l Andrew Keith, president, Lane Crawford l Alice Lau, CEO, Le Saunda l Roopa Purushothaman, managing director and head of research, Everstone Capital Advisors l Arvind Singhal, chairman , Technopak Advisors l Torsten Stocker, partner, consumer goods & retail, AT Kearney l Lixia Tan, senior vice president and CFO, Haier l Lavinia Tong, marketing director, Diageo China l Tong-yi Mao, China general manager, GRI Group l Iris Xuan, brand direction manager, SK-II China On the rise and online: Female consumers in Asia Executive summary Asia’s rapidly growing consumer markets are the great hope of many companies across the world In 2015, retail sales in Asia are forecast to grow by an average 4.6% on a volume basis, to US$7.6trn1) This compares with 2.5% in North America and 0.8% in Europe, according to Economist Intelligence Unit forecasts Behind this broader trend is one that is rapidly coming to the attention of brand owners and retailers: the rising independence and economic power of Asia’s women While controlling an increasing amount of household purchasing decisions, women are also showing a passion for online shopping This report is aimed at providing insights on how women’s purchasing power is increasing, and in particular how women are driving e-commerce in Asia It is based on an extensive survey of 5,500 women across major cities in Greater China, India, Japan, Singapore and South Korea, as well as input from consumer analysts and major retailers and brand owners themselves Among the key findings: l Women in Asia’s major cities are increasingly empowered Region-wide, 43% of the women responding to our survey were in managerial, executive or professional services jobs Most were contributing to their household income—8% described themselves as sole breadwinners and 41% said they were joint breadwinners The trend is particularly notable in mainland China, where 62% described themselves as joint breadwinners l Women are showing increasing independence in handling their finances Just over two-thirds reported having their own bank accounts (this ranged from 76% in mainland China, to a low of 47% in Macau), and 48% held their own credit cards Most are in charge of budgeting decisions on groceries, clothing and accessories, and children’s products, and are at least co-decision makers in most other product categories like electronics and travel services In terms of who pays, 35% of women said they paid for their own online purchases, while 15% said they paid for their partners’ purchases as well l Women are driving the growth of online shopping in the region, with many preferring it to offline Among survey respondents, 63% browse the Internet at least once a day for products and services, with nearly 30% doing so twice or more per day Just under 80% of women regionally buy some groceries online (just over 20% buy the majority of their groceries online); the figure rises to 83% for cosmetics and nearly 90% for clothing and accessories (29% of women make the majority of their cosmetics purchases online with the figure rising to 39% for clothing © The Economist Intelligence Unit Limited 2014 Based on nominal US$ sales On the rise and online: Female consumers in Asia and accessories) Perhaps most troubling for retailers focused on the brick-and-mortar business, nearly half—49%—of women polled agreed or strongly agreed that they preferred the experience of shopping online to doing so in stores The figure was as high as 69% in mainland China Notable outliers include Hong Kong, Singapore and especially Japan, where only 18% of women said they preferred online shopping to shopping in stores—the lowest rate in the region This no doubt reflects the highly developed retail markets in these places l At least on the Internet, many Asian women don’t seem to be living up to the stereotype of selfless, family-focused individuals Over 62% of women are buying for themselves most of the time when shopping online; in mainland China that rate rises to 74%, and to 77% among 18-29 year olds Women do, however, engage in guilt shopping; 41% said they would buy something for their partner, children or family when they feel they have bought too much for themselves That figure rises to 67% among women in mainland China l Women say online shops are cheaper, more reliably stocked, and offer a less stressful shopping environment Women have a variety of reasons to prefer online shopping Most point to cost (62%) and time savings (60%), but they also feel that online retailers can be relied upon to have the products they want to buy (59%) and they appreciate the range of choice online shopping offers (56%) Online shopping is also more relaxing Across the region, nearly half (48%) of women say they feel pressured and stressed in traditional shops, and 27% feel store staff talk down to them because they are women l The online shopping craze offers opportunities for cross-border trade for brands and retailers, but they need to work on logistics Regionally 36% of women agreed or strongly agreed that they shop online © The Economist Intelligence Unit Limited 2014 specifically to get products from overseas, and 41% said they bought products from abroad because they were better than those produced domestically—with the figure rising to 45% among those aged 18-29 This perceived quality gap was especially pronounced in Macau and mainland China, where 53% and 63% of women respectively saw products from abroad as superior Analysts say this is partially a result of the safety problems that have plagued China’s supply chain at regular intervals in recent years, but also points to the challenges faced by local brands in winning over increasingly demanding Chinese consumers However the taste for imports is not universal—South Korean and Japanese women remain highly loyal to local brands Moreover, regionally, 64% of women agreed or strongly agreed that delivery times were a concern when making purchases from abroad, and 66% were concerned about delivery costs l Mobility in online shopping also means women are increasingly shopping anywhere and everywhere, and online retailers will need to have a strong mobile interface Perhaps of interest to some of the region’s employers, 28% of women say they shop online via PCs at work—with the figure rising to 40% in mainland China, where 20% also use their smartphones to shop at work Just under 30% also say they shop online in bed at night Home is still the favoured place to shop, with 78% using a PC at home, 45% using smartphones and 25% using tablets l Women want personal service According to our survey, women are attracted to retailers that build accurate customer profiles and target communications accordingly—64% of women found this appealing—as well as reward them for loyalty (61%) These are seen as far more effective ways for online retailers/brands to attract traffic than traditional marketing tools such as advertisements and newsletters (45%) On the rise and online: Female consumers in Asia l Getting the messaging right will be tricky Given their rising economic power, one might reasonably expect women to be more attracted to messaging that appeals to their rising independence The reality is more complicated While messages that address them as independent, intelligent consumers were found to be appealing by 56% of women, nearly the same percentage (54%) said they found messages addressing them as wives, mothers or girlfriends to be attractive Successful messaging will no doubt be that which somehow manages to marry the two, and will depend on the product in question l The future of online shopping looks mobile, and impulsive Many of the trends identified in our research are driven by younger women, suggesting that the move toward online shopping in general, the shift to shopping on mobile devices and the preference for being addressed on a personal level are likely to intensify For example, the percentage who prefer shopping online climbed to 53% among the youngest (18-29) demographic surveyed (compared to 49% overall) In this age range, 58% of women shop online with their smartphones at home, versus 38% of 40-49 year olds Similarly, 58% of women 18-29 found communications that respected them as independent, intelligent consumers appealing or strongly appealing, compared to 53% of women 40-49 While overall some 43% reported spending more money online than they in physical shops, again the rates among those 18-29 were even higher (56%) This may be connected to the typical lack of youthful restraint; over half of women 18-29 agreed that they were more likely to buy impulsively online, versus around 40% of older women But habits, once entrenched, usually not change much © The Economist Intelligence Unit Limited 2014 On the rise and online: Female consumers in Asia Introduction Asia has produced no shortage of compelling growth stories over the past decade, and the region certainly has more in store Investors and companies are now looking to consumers in the emerging economies of Southeast Asia as they seek to diversify beyond BRICS giants China and India But in the hunt for the continent’s next growth engines, they may better not to think in terms of markets, but demographics— specifically, Asia’s women Long an untapped resource in regional labour markets, women are increasingly employed, independent and prosperous, and they are poised to be one of the leading drivers of spending in the years ahead Rising female labour participation and incomes have coincided with a profound transformation of the retail landscape Online shopping is gaining traction worldwide, but in Asia its rise has been Asia as number one Retail sales (US$trn), volume growth 4.3 North America 3.2 Western Europe 2.5% 0.8% 7.6 Asia and Australasia Latin America 1.5 2.4% Middle East and africa 0.6 2.9% 4.6% For many traditional retailers, this will present challenges and require shifts in strategy Connections with female shoppers will increasingly have to be forged in the online environment, and consumers will have more options than ever At the same time, online shopping also represents a major opportunity Constant generation of data will allow vendors unprecedented visibility into the behaviour and tastes of their customer base; online platforms will provide a possible way around some of the costs and space limitations associated with physical storefronts Based on an extensive survey of 5,500 women throughout the region, as well as input from Source: The Economist Intelligence Unit nothing short of meteoric; the region is set to displace North America as the world’s largest e-commerce market this year There are multiple reasons for online shopping’s success First, it is convenient, frequently bringing goods to even remote doorsteps Second, it increases choice, giving consumers access to products beyond national borders And third, as our research and this paper will show, e-commerce has struck a chord with Asia’s female consumers Despite their diversity in terms of income levels, habits and cultural preferences, overall women throughout Asia are enthusiastic proponents of online retail, with many preferring it to traditional brick-andmortar stores for a variety of reasons © The Economist Intelligence Unit Limited 2014 On the rise and online: Female consumers in Asia consumer analysts and major retailers and brand owners themselves, this paper provides insights into women’s preferences and aspirations and how these could evolve It suggests how companies will need to respond to the emergence of more empowered female consumers, particularly in the online environment © The Economist Intelligence Unit Limited 2014 On the rise and online: Female consumers in Asia Changing demographics, control over purse strings Much of the rise in women’s spending power can be traced back to a common cause: more Asian women joining the workforce, and at more senior levels While women have traditionally been underrepresented in the Asian workplace, recent trends have been encouraging Women held 29% of senior management positions in Asia by 2013, a higher rate than in North America and Europe2 In mainland China alone, women’s average contribution to household income has jumped to 50% from just 20% in 19803 The results of our survey reflect these changes The sampling for the survey mirrored the urban female population between the ages of 18 and 60 in select Asian countries* in 2014 in terms of age, marital status, number of children and income.4 Women’s rising economic power in Asia Breadwinners, not bakers Overall, 91% of urban adult women contribute to household income (% respondents) (% respondents) Joint breadwinners Other Grant Thornton, Women in business, from classroom to boardroom, March 2014 Nielsen, A Battle of the Sexes Plays Out in Shopping Aisles, March 2014 The survey covered mainland China (Beijing, Changsha, Chengdu, Guangzhou and Shanghai), India (Bangalore, Chennai, Delhi, Kolkata, Mumbai, Pune), Hong Kong, Japan (Kanto, Kinki), Macau, Singapore, South Korea (Gyeonggi, Seoul) and Taiwan Respondents were also screened to exclude those who not have an Internet connection Mainland China Overall, 83% of urban adult women contribute to household income Partner is sole breadwinner Live with family and share expenses Sole breadwinners 10% 41% 8% 1% 9% Partner is sole breadwinner Live with family and share expenses Sole breadwinners 15% Joint breadwinners Other 62% 9% 8% 11% 8% Earn, but partner is main breadwinner 19% Partner is main breadwinner Japan Overall, 63% of urban adult women contribute to household income (% respondents) Other 14% Partner is sole breadwinner 24% Live with family and share expenses 25% 17% Sole breadwinners Note: Figures may not total 100% due to rounding © The Economist Intelligence Unit Limited 2014 19% Joint breadwinners 2% Earn, but partner is main breadwinner On the rise and online: Female consumers in Asia Financially independent Bank accounts Regionally, 67% of women have their own bank accounts (% respondents) 76% Mainland China 66% Hong Kong India 65% Japan 65% 61% South Korea 60% Taiwan 58% Singapore 47% Macau Credit cards Regionally, 48% of women have their own credit cards (% respondents) 53% Mainland China Japan 52% South Korea 52% 49% Taiwan 48% Hong Kong 37% India 35% Singapore Macau Region-wide, 43% of the women responding were in managerial, executive or professional services jobs Most were contributing to their household income—8% described themselves as sole breadwinners and 41% said they were joint breadwinners, while another 19% reported that they had some income, though their partner was the main breadwinner More importantly, beyond simply contributing to the family kitty, women are showing increasing independence in handling their finances Just 30% over two-thirds reported having their own bank accounts (this ranged from 76% in mainland China, to a low of 47% in Macau), and 48% held their own credit cards Most are in charge of budgeting decisions on groceries, clothing and accessories, cosmetics and children’s products, and are at least co-decision makers in most other product categories like electronics and travel services Women in mainland China seem to have a particularly large say in household spending a majority also control household budgets for electronics and travel purchases © The Economist Intelligence Unit Limited 2014 On the rise and online: Female consumers in Asia What women buy online Percentage of women buying at least some products online, by category (% respondents) 89% Clothing and accessories 87% Maternity and children’s products* 83% Cosmetics Groceries 78% Home products 78% 76% Electronics 75% Travel & leisure services 56% Furniture * % of women among those between 18-39 years of age with children Percentage of women buying at least some groceries online (% respondents) 90% Mainland China 88% South Korea 85% Taiwan 76% India 65% Japan 60% Hong Kong Macau Singapore to form around products, says Jigsaw’s Ms de Gramont “Chinese women view shopping in general as a social activity Chinese women go out shopping, including window-shopping, much more frequently than the average American woman, for example … there’s a very important social media element to online shopping, e.g., customer reviews and reviews of other like-minded women, because that’s really what they trust most Successful e-commerce websites should have a social component because women like sharing 50% 44% with their friends, but also being able to have some sort of community or discussion about the product and what they’re buying brings a lot of quality assurance.” Asia’s women turn to the Internet to find a broad spectrum of goods, but it is in apparel and fashion that online shopping appears to be displacing traditional retail the most Regionally, 89% of women said they bought at least some clothing and accessories online, with 39% reporting that they make a majority of purchases online Maternity and children’s products and © The Economist Intelligence Unit Limited 2014 19 On the rise and online: Female consumers in Asia Buying decisions Which factors are most important in buying decisions? Brand vs price vs personal feelings (% respondents) Groceries Clothing and accessories Brand Personal feelings 26% 28% 46% 41% Price Electronics Brand Personal feelings 25% Personal feelings 50% 25% cosmetics are also frequently bought online Online shopping for furniture is generally less common, with only 6% buying online Rates of online shopping tend to be higher, therefore, for product categories where women tend to control the household budget—and where purchasing decisions tend to be driven by brand, or personal feelings, rather than price While most women cited price as the main factor when selecting groceries, furniture or home products, their motivations for picking goods that are typically for their own rather than household use are quite different When selecting clothing, 41% of women said their personal feelings were the main factor This was particularly true for women in Japan—where the rate was 51%—as well as South Korea, Hong Kong and Taiwan Brand power, however, counted 20 24% 35% Price Cosmetics Price Brand Personal feelings © The Economist Intelligence Unit Limited 2014 Price Brand 16% 52% 32% for more in purchases of cosmetics—cited by 50% of women as the most important factor—as well as electronics and maternity or children’s products Mainland Chinese women appeared to be particularly brand-conscious, with 66% basing cosmetic purchases on brands, for example “(In mainland China) knowledge about brands is almost a form of social currency … because all the brands have come in so quickly, it’s almost like there’s a pressure to find out what they’re all about,” explains Jigsaw’s Ms de Gramont Women in India also often take a brand’s status into consideration, but prices generally play a larger role in buying decisions than they in mainland China “Traditionally, the female head of household would see (shopping) as her responsibility and On the rise and online: Female consumers in Asia her contribution to the overall family, so she would save as much as possible—get it cheaper, faster and better So women’s shopping habits traditionally have a lot to with negotiation, informal pricing, relationships, and a lot of back and forth and time spent to get to the right price,” says Ms Purushothaman “Indian women will shop for styles, range, price and/or a combination, and therefore show less affinity towards a certain brand They may be brand conscious but may not be brand loyal,” says Mr Singhal of Technopak “A large population of Indian women are homemakers and this adds a different dimension to some of the shopping trends Managing the expense budget of the family becomes a key responsibility and this gets reflected in Indian women shoppers being value seekers and bargain hunters.” Women in South Korea, Japan and Singapore seemed by far the least motivated by brands overall Only a quarter of Japanese women cited brand as the most important factor when selecting cosmetics, for example, a highly brandcontrolled segment in other Asian markets In Singapore, just 9% of women felt brand played the main role in clothes buying decisions—price was a far greater consideration Purchasing motivations also vary depending on demographics Among women surveyed, married women seemed more brand-driven than single women, while single women were more likely to be swayed by personal feelings Younger women also appeared more brand-sensitive, with 52% of 30-39 year olds citing brand as the main factor in cosmetic purchases and 56% as the main factor in electronics purchases, higher than the rates for 40-60 year olds in both categories “I think there’s also a mindset among [mainland] Chinese women from their 20s to their 40s, that spending on themselves as they’re entering the workforce is a long-term investment in their image … spending on themselves can help them advance socially and career-wise, especially when you’re talking about luxury products and branded accessories,” Ms de Gramont says The brand consciousness of the young female demographic has convinced some major technology companies to adopt more fashion cues into their product design and marketing approaches Hyon-Ju Cho, vice president and team leader of Samsung Electronics’ Marketing Service Team, says young women represent an “important target” for the firm “Samsung is collaborating and will expand partnerships with fashion brands such as Swarovski phone covers and (Galaxy) Gear charms to deliver mobile accessories targeting female consumers.” Unsurprisingly, brand sensitivity has an impact on Asian women’s online shopping preferences Regionally 70% of women said the presence of good brands or branded products somewhat or very important when choosing an online retailer Overall, however, they were even more concerned with finding the best prices, which 83% cited as important or very important, and whether the products on offer are genuine and of good quality These views were broadly consistent throughout the region, making it important for online retailers who deal in various brands to strive for the most extensive and reputable range possible “Lazada is constantly striving to give our customers access to the widest possible selection of products,” says Mr Bittner “We are continuously working with vendors to make assortment from these markets available to consumers in Southeast Asia.” “Women are more adventurous in seeking out new brands and product so we have a much larger (women’s) brand portfolio to shop from online (than in stores),” says Mr Keith of Lane Crawford Social circles also play an important role in steering women towards certain e-commerce sites Thirty per cent of women said they typically first discover an online retailer through © The Economist Intelligence Unit Limited 2014 21 On the rise and online: Female consumers in Asia friends or word of mouth, and over half viewed friends’ recommendations as important or very important The advice of friends was viewed as particularly important in India and mainland China Women in mainland China were also most likely to lend credence to reviews of online retailers on forums or blogs, again highlighting the social characteristics of the country’s e-commerce landscape that analysts say make online shopping such a compelling proposition These traits have made positive online comments one of the most valuable currencies in mainland 22 © The Economist Intelligence Unit Limited 2014 China’s brand landscape, and encouraged some unique promotional techniques Mainlandfocused shoe and accessory maker Le Saunda, for example, sometimes offers points and bonuses that can be applied to future purchases to online customers who ‘like’ or praise its products “A lot of customers are willing to post their comments on our websites or other platforms,” says CEO Alice Lau “Positive comments and word of mouth from customers is very important, not just concentrating on promoting your brand image.” On the rise and online: Female consumers in Asia Global vs local Online retail has given women throughout Asia access to a greater range of goods than ever before, including imported brands that may have previously been entirely inaccessible or all but unknown outside a few urban fashion circles On the one hand this represents a stellar opportunity for brands and retailers, enabling them to extend their presence to markets where they don’t have physical operations “Extending online to a digital flagship enables us to cover all of [mainland] China and Asia, expanding our reach into new markets,” says Mr Keith of Lane Crawford “The online store has been very effective in cultivating new customer bases and very strong sales growth across Asia Pacific and most notably in Australia, Japan, Singapore, Korea and Taiwan.” On the other hand, this can increase the competitive pressure on local brands that previously enjoyed a privileged market position because of a relative lack of alternatives The results of our survey indicate local brands may have to more to raise their game Regionally 36% of women agreed or strongly agreed that they shop online specifically to get products from overseas, and 41% said they bought products from abroad because they were better than those produced domestically—rising to 45% among Buying from abroad Percentage of women who agree or strongly agree (% respondents) I buy from abroad because 56% I purchase products that are not available at home Purchasing certain products abroad saves money 47% I get more choice 47% 41% Products are better quality 38% It helps me keep abreast of trends Products from abroad suit me better 32% But I am concerned about 66% Delivery costs 64% Delivery times 59% Having to pay extra taxes © The Economist Intelligence Unit Limited 2014 23 On the rise and online: Female consumers in Asia those age 18-29 This perceived quality gap was especially pronounced in Macau and mainland China, where 53% and 63% of women respectively saw products from abroad as superior Analysts say this is partially a result of the safety issues that have surfaced in mainland China’s supply chain at regular intervals in recent years, but also points to a bigger issue with local brands struggling to win over increasingly demanding Chinese consumers “Quality and trust are the fundamental issues (Chinese brands are) facing If they want to be successful, they need to know how to grow beyond their own market, (but) a lot of Chinese brands are well known in [mainland] China but not known in the global market,” says Linda Du, Shanghai managing director of communications and strategy firm APCO Worldwide “That really limits their strength and power because consumers definitely want products that have a global reputation.” “The challenge is that [mainland] Chinese consumers are still skeptical of local brands, especially from a quality standpoint,” says Ms de Gramont of Jigsaw “Not many local brands have really been able to build a true brand in terms of the story behind the brand and what they stand for A lot of it is just development stage; I think that it will come A lot of brands had not been marketing focused until quite recently, they’d been sales and distribution focused.” Women are also motivated to buy imports online because they are unavailable at home, and frequently because they are cheaper Price sensitivity was especially apparent in comparatively high-cost South Korea and Singapore, where 57% and 58% of women respectively said purchasing some products from abroad helped them save money Overall, however, women citing brand as an important factor in purchasing decisions tended to gravitate towards the local in most product categories Regionally 89% who felt brand was 24 © The Economist Intelligence Unit Limited 2014 important favoured local grocery brands and 66% domestic clothing brands This is most likely explained by the unique dietary habits of each country, as well as clothing styles and particularly sizing issues—few Western apparel makers cater for smaller Asian sizes, and vice versa The notable exceptions were electronics and cosmetics, where only 52% and 43% said they preferred local names For cosmetics branding in India “you rarely see an Indian face in advertising, and you’ll always see that the selling point is that it’s from some other country outside of India because makeup in particular is seen within India that the quality isn’t very good,” says Ms Purushothaman of Everstone Capital Advisors South Korean and Japanese women appear to be the most consistently loyal local consumers Eighty-one percent of Japanese women and 70% of South Korean women prefer local cosmetics brands, and 97% and 94% respectively prefer local electronics products, by far the highest proportions in the region—thanks no doubt in part to the presence of home-grown, globally feted brands like Laneige and Sony in both categories Local brands can take some comfort in the fact that infrastructure limitations and red tape look likely to temper the influx of imports in many markets Regionally, 66% of women agreed or strongly agreed that delivery times were a concern when making purchases from abroad, and 64% were concerned about delivery costs While a lower proportion were worried about having to pay extra taxes on overseas purchases, this is a significant potential barrier in mainland China and Taiwan, where 66% and 68% of women respectively cited taxes as a concern The emergence of services like Borderfree, which partners with major US retailers to offer discount shipping and packageforwarding to destinations around the globe, may go some way to addressing women’s delivery cost concerns, but taxes or duties can’t be avoided by even the most innovative vendors On the rise and online: Female consumers in Asia Connecting with the new Asian female consumer With Asian women now able to take their pick from a truly global array of retail and product options, brands must work harder than ever to build connections and loyalty with their buyers In some ways the online retail environment has made this more difficult, lacking the possibilities for camaraderie and physical interaction with goods that exist in brick-and-mortar stores “It’s worth keeping in mind that the modernisation of the Indian retail business is happening significantly offline, and the social and experiential element of retail remains a strong driver for women,” points out Devangshu Dutta, chief executive at consumer consulting firm Third Eyesight At the same time, mining online transaction data can provide retailers with a new level of insight into customer preferences and behaviour While using data to build customer profiles can come across as invasive in more privacy-sensitive consumer markets, overall Asian women seem appreciative of efforts to personalise the online shopping experience Asked how online shops could best win their trust and loyalty, 64% said efforts to understand their profile and tailor offerings to their individual needs were appealing or strongly appealing, the highest rate among all options Personalisation was especially valued in mainland China, where 80% of women found it appealing or very appealing, but the rate dropped to 42% in Japan Similarly, 57% of women regionally appreciated communications from retailers that reflected their profiles and respected their lifestyle and product preferences That compared to just 45% and 49% saying the same regarding newsletters and regular advertising, respectively Mainland Chinese women, particularly of the younger generation, “don’t like to read magazines and be told what to buy from an advertisement—the old fashioned ‘this is a famous brand you should like’ approach,” says Mao Tong-yi, China general manager for GRI Group, which manages multiple imported clothing brands on the mainland “They prefer to see a discussion around a product or brand.” Asian women also seem willing to volunteer information to online retailers Referring to websites where a good range of quality branded goods were available, 44% said they would sign up or register their preferences so they could be alerted to relevant offers and sales In India and mainland China, the rates were 57% and 63% respectively Online vendors have moved quickly to apply the information they garner from their customers, and many are already factoring the unique traits or trends that emerge into their marketing campaigns Mr Bittner of Lazada gives an example from Singapore “Female shoppers in Singapore seem to have a preference to shop in the evening, unlike their neighbours in the region where shopping in the afternoon is more common,” he explains “As such, targeted promotions published on Facebook in Singapore tend to be scheduled later in the day than in many of our other markets.” © The Economist Intelligence Unit Limited 2014 25 On the rise and online: Female consumers in Asia Which forms of communication from online retailers appeal to you? Percentage of women who found each option somewhat or strongly appealing (% respondents) Understanding my profile and tailoring to my individual needs 64% 61% Loyalty rewards 60% Alerts for latest offers Communications that reflect the profile I give to stores in respect to my lifestyle and products 57% Communications that respect me as an independent, intelligent consumer (ie does not address me as a wife/mother/girlfriend) 56% Communications that consider my life situation and status as a woman (ie, that I am a wife/mother/girlfriend) Store’s advertising to remind me of their presence Newsletters Lane Crawford, meanwhile, reaches out to women with personalised communications that highlight new products, brands or content likely to pique their interest, garnering a “significant response,” Mr Keith says The retailer also employs an army of “personal stylists” that can work with shoppers online on “recommending new products, pulling together total looks, finding a special piece for a specific occasion, building on their wardrobe season after season—whatever the customer wants.” Product makers are also emphasising the personalised approach India’s Godrej Appliances is focusing on digital marketing, differentiating and targeting online customers through specific communication, says Mr Nandi “(Women) being our core target, we are especially reaching out to them through social media, search engine marketing, banner advertising, retargeting and other online means.” 26 © The Economist Intelligence Unit Limited 2014 54% 50% 45% Samsung Electronics, meanwhile, connects with women via both proprietary and mass online shopping sites, and even factors customer preferences into product design, says Ms Cho “Samsung makes a great effort to tailor its products for women (and men) based on the needs of local markets and consumers For instance in India, Samsung ensures that its home appliances can fit into their distinctive housing environments and reflects Indian women’s taste, putting emphasis on various colours as well as exterior pattern design [Mainland] Chinese women place the importance on their family as well as health At the same time, they show higher interest in following global trends and celebrities’ lifestyle Samsung utilizes these points in marketing activities.” Asian women are also highly receptive to loyalty rewards programmes, with 61% saying they On the rise and online: Female consumers in Asia found such programmes appealing or strongly appealing And retailers are again creating initiatives to match Lane Crawford runs a “Privilege Programme” across its online and physical stores that rewards repeat customers, according to Mr Keith “Women have a higher rate of participation and therefore redemption for their spending.” When asked about the communication approaches they prefer, women’s responses were mixed Regionally 56% said they find communication that speaks to them as independent, intelligent consumers—that is, not a wife, mother or girlfriend—appealing or strongly appealing However, 54% said the same about messages that considered their life situation and status as women—ie, as wives, mothers and girlfriends Women in mainland China, Taiwan and India showed a slight preference to be spoken to as individuals Japanese women were the most indifferent, with the majority saying they found both approaches neither appealing nor unappealing In the view of spirits giant Diageo, these hybrid preferences are less a sign of contradictions than more complex realities Asian women increasingly have it all—in terms of income, choices, roles and responsibilities “We say that ‘cream with spirit’, which is what Baileys is, reflects women’s reality,” says Lavinia Tong, marketing director at Diageo China, referring to the firm’s iconic Baileys cream-based liqueur, which is targeted towards women “They are working full time but are also worried about style, elegance They are independent but family values are also important to them They want to be good wives, daughters, mothers—that’s the cream At the same time they are confident and have career ambitions—that’s the spirit Women are all sorts of things, and we celebrate them all.” Baileys was launched in Ireland in 1974, aimed at “modern, empowered women” It was launched in mainland China in 2008, and Diageo stepped up the marketing campaign in 2012 It has used the basic “cream with spirit” messaging in its approach to women on a global level In mainland China, however, it has added another layer— guimi, or sisterhood “Many in our target market are single children because of China’s one-child policy,” explains Ms Tong “So their female friends are their family So we use the concept of sisterhood to speak to them Baileys is something you should enjoy while with your sisters.” Its strategy has clearly gained traction: in the fiscal year ending in June 2014, sales of Baileys in China grew 20% year-on-year The types of messaging preferred also no doubt depend on the product category (women buying children’s clothing no doubt expect to be addressed as mothers) Overall, however, the high levels of appreciation for tailored and personalised communication is a firm indication Asian women value being approached as independent individuals Efforts to speak to women as a whole, particularly if based on assumptions about their roles and interests, can backfire In Western markets, for example, brands are increasingly sensitive to criticism that they use only ultra-thin, beautiful models in their advertising, contributing to self-esteem issues amongst young women who not live up to this image But such sensitivities not seem as pronounced in Asia Skin care brand Dove’s initial attempts to replicate its highly successful “Campaign for Real Beauty,” which features real women with varying physiques as models, in Japan and mainland China floundered, with marketing specialists citing its failure to take into account more exacting beauty standards and a cultural preference for the less direct Lane Crawford’s customers across Asia are “on a journey of self-expression which is really just beginning,” says Mr Keith “And they’re having fun with it.” Ms Purushothaman believes that in India—where many products that tend to be bought by women, © The Economist Intelligence Unit Limited 2014 27 On the rise and online: Female consumers in Asia such as cosmetics, are still sold or marketed by men—brands could very well by speaking to women’s growing independence into your brand stories … that will influence their purchasing decision,” says Ms Du of APCO Worldwide “There really aren’t brands that have spoken to the young Indian woman consumer, playing up on the empowerment they’re going through on the ground here—for example they’re starting to work in families where they never did before—so I think there really is an opportunity for a brand to capitalise on that and I’ve not seen anyone it very well Mostly what they is carry their global marketing campaigns and bring them here, but that’s not really the same thing.” Jigsaw’s Ms de Gramont points out that mainland Chinese women now regularly compare prices on online malls and brands’ dedicated websites— sometimes on a global level This makes the still-common practice of luxury marques inflating their prices or image on the mainland a risky proposition Appeals to independence are by no means successful only with younger women For Procter & Gamble beauty brand SK-II, in mainland China the so-called ‘golden age’ women of 35 and older are among the fastest-growing customer demographics While the company tends to reach out to young women with mass social mediadriven marketing campaigns, it has found a highly individualised approach more effective with this segment, according to Iris Xuan, brand direction manager at SK-II China “We use VIP club member data from banks or department stores to create a very targeted, very highincentive offering,” she explains “We’re more focused on one-to-one communication, because if we talk to the right person, the conversion rate is quite high.” Overall, however, analysts say the best way for brands, local and foreign, to win Asian women over is to stand for something compelling, and to represent good value—and with a more connected and sophisticated consumer, it’s getting a lot harder to fake either “[Mainland] Chinese people’s English language skills are much better than before, they travel around the globe and they’re more adapted to foreign cultures, so if you’re able to tell good stories, if they can learn stories from either global platforms or their friends and they buy 28 © The Economist Intelligence Unit Limited 2014 “They come into [mainland] China and see the opportunity that people want premium luxury products, and they price themselves and position themselves in that way Consumers buy into it, but more and more you hear consumers talking about certain cosmetic brands and saying, ‘you can buy it in a supermarket in the US, so why is it being sold for US$40 in China, the exact same thing?’ So be careful about how you’re positioning yourself in China, because consumers want to see more and more what you stand for in your home market.” For those looking to move beyond major cities, the proposition is somewhat different Appliance maker Haier, based in mainland China, has experimented with such things as special washing machines for lingerie, but has now decided to focus on women’s role in consumption decisions, and how to cater for women in different income brackets While design is more important than price or technology for higher-income women, in mainland China’s third and fourth-tier cities the situation is much different Annual disposable income ranges from Rmb10,000 (US$1,634) to Rmb20,000, but Haier has discovered that it can make substantial sales by offering packages of several appliances for women about to get married “Rmb10,000 is a small number for a dowry, but three to four home appliance items as a dowry is substantial enough,” says Lixia Tan, senior vice president and CFO of Haier On the rise and online: Female consumers in Asia Barriers ahead? Online shopping may be making massive strides across Asia, but its advance will not go entirely unimpeded Physical stores benefit from unique pull factors that continue to draw many women in—like the opportunity to socialise or bargain, or literally try something on for size— while online retail has to confront a host of potential issues that traditional retail largely does not With a business model based heavily on home delivery, online retailers are highly reliant on local transport infrastructure and logistics networks, which are not always in optimum condition Regionally 20% of women surveyed said they found it difficult to get products delivered where they live—this is significant considering that our survey was conducted in major cities in the region The rate was significantly lower in highly developed South Korea and Japan, but rose to 63% in Macau and 35% in India India suffers from “weak and inadequate last mile delivery infrastructure,” says Mr Singhal of Technopak “Logistics, which is a key component of order fulfillment, is challenging given the geographical complexity, sub-optimal infrastructure, and regulatory variations across India … while we have seen considerable progress in the past five years in terms of the development of the B2C logistics ecosystem, this still remains the biggest challenge in this sector.” In India, the issue is often still one of broadband connections, and of productive usage of the Internet in general Based on our research, we estimate that only one in ten Indian women in our demographic profile use the Internet5 Online retailers must also contend with a multitude of payment systems and associated security concerns “One barrier in perception is that people want better security in online shopping,” says Ms Du of APCO Worldwide “Security is more and more an issue among customers, (who) consider whether it’s safe to put my credit card or information on an online platform.” Varying payment standards are “one of the biggest challenges in [mainland] China and Asia,” says Mr Keith of Lane Crawford, requiring substantial investment from online vendors “To transact online in [mainland] China, you need multiple payment options We are currently working with more than 14 different payment partners, and that might be normal in the rest of the world but the reality in China is there are real concerns around fraud and security of personal data, so 14 took significant time.” Relatively low credit card penetration is also a drag on e-commerce in markets like India, effectively locking women out of many overseas shopping networks and requiring retailers to adopt ‘cash on delivery’ services “This is stopping players from unlocking the real e-tailing potential,” says Technopak’s Mr Singhal—while adding that the recent rise in mobile payment options presents a possible way around this shortfall © The Economist Intelligence Unit Limited 2014 In conducting the survey, respondents were screened to ensure they were Internet users One in ten respondents approached for the survey confirmed that they were Internet users This is in line with other surveys conducted in India 29 On the rise and online: Female consumers in Asia Conclusion: What does the future of retail look like? As our survey and this paper have shown, in Asia the rise of online shopping is a genuinely cross-cultural phenomenon, broadly embraced by women from Seoul to Mumbai regardless of age group and marital status At the same time, much like the region itself, the growth of e-commerce encapsulates a vast diversity of trends, and a ‘one size fits all’ approach is unlikely to succeed In order to cultivate a regional customer base, online retailers—particularly those selling a variety of brands across multiple product categories—will have to hone their product mixes and marketing approaches carefully while retaining a high degree of flexibility This will be a delicate, and difficult, dance that balances the mainland Chinese thirst for imports with Japan’s devotion to home-grown brands; India’s patchy communications infrastructure and hyperconnected South Korea; the younger women mainly shopping for themselves and those more inclined to buy for family members It’s a tall order, of course, requiring major investments of time and resources, and some companies may decide to concentrate on simply serving their home base or a handful of especially What women look for when choosing an online retailer Percentage of women who agree or strongly agree (% respondents) 83% Whether the products are good quality 83% Best price 82% Whether products are genuine 79% Delivery costs Ease of use 77% Standard of after-sales service 77% Range of choice 74% Speed of delivery 74% 70% Good brands/branded products 66% Breadth of offering, unexpected items 61% Reviews from forums/blogs Recommendation of friend 30 © The Economist Intelligence Unit Limited 2014 53% On the rise and online: Female consumers in Asia promising markets But in the picture of a diverse and rapidly developing regional industry, some consistent trends are clear With the rise in choices and sources of information has come a more international consciousness; the image, cost and quality of products are increasingly measured according to global rather than local standards What is notable—and what retailers may want to keep in mind—is that although the rise in women’s purchasing power and online shopping are together reshaping retail, many of the trends that are emerging are nothing new Women still place an immense amount of value on the advice of friends and family A good name counts for more than just about anything When choosing an online retailer, women say price (83%) is important or very important, but so are quality (83%), genuine products (82%) and convenience (77%) Brands and retailers will also, however, have to speak to the growing sense of independence that has accompanied Asian women’s increasing financial and—with many women marrying later, if at all, and having fewer children—personal autonomy As this paper has shown, women not only value, but also expect companies to be aware of their individual tastes and preferences, and to target them with communications, products and promotions accordingly Success is therefore likely to come down to the classic retail maxim of “know thy customer”—and better than ever before Thankfully, the data collection and analysis possibilities that e-commerce presents will provide a powerful tool for companies in this effort Companies would well to keep in mind that all these trends appear set to accelerate, and grow more prominent, as Asia’s younger crop of female consumers comes of age Women aged 18-29 are not only more likely to prefer online retail, but are far more active shoppers on mobile devices, and less likely to confine their browsing to home or during their time off The preference for being addressed on a personal level is also more pronounced among Asia’s younger women They are more inclined to impulse buying, and more dedicated users of social media, especially in markets like mainland China Brands like Le Saunda are already responding to these emerging realities with innovative pop-up events and flash sales broadcast on microblogs Of course, the basics—quality of products and services—remain as critical to young consumers as ever, and in developing the online aspects of their business, there may be no need for retailers to reinvent their strategies wholesale But their strategies must take into account the great online shopping migration, and the expectations of the women leading that charge © The Economist Intelligence Unit Limited 2014 31 While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report LONDON 20 Cabot Square London E14 4QW United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8500 E-mail: london@eiu.com NEW YORK 750 Third Avenue 5th Floor New York, NY 10017, US Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Rue de l’Athénée 32 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 9347 E-mail: geneva@eiu.com [...]... This makes online shopping in mainland China a communal practice, and vendors should tailor their online stores accordingly by incorporating functions that allow communities and discussions On the rise and online: Female consumers in Asia What women buy online Percentage of women buying at least some products online, by category (% respondents) 89% Clothing and accessories 87% Maternity and children’s... that they can get elsewhere … or looking for different styles (and sizes),” says Ms de Gramont © The Economist Intelligence Unit Limited 2014 The appetite for online shopping transcends nationality But unsurprisingly given the region’s diversity, it takes varying shapes Asia s largest On the rise and online: Female consumers in Asia Why they shop online (% respondents) 62% They get the best price online. .. mid-range apparel, there is much more variety online compared to what they can find in the shopping malls.” The presence of bargains is one of the main motivators for online shopping not only in mainland China, but also throughout Asia Across the region 62% strongly or somewhat agreed that shopping online gets them the best prices The rates of agreement were highest—around 70% in mainland China and South Korea,... accessories online, with 39% reporting that they make a majority of purchases online Maternity and children’s products and © The Economist Intelligence Unit Limited 2014 19 On the rise and online: Female consumers in Asia Buying decisions Which factors are most important in buying decisions? Brand vs price vs personal feelings (% respondents) Groceries Clothing and accessories Brand Personal feelings 26%... Philippines, Singapore, Thailand, Indonesia, and Malaysia, enjoying the experience and then returning home and continuing to shop frequently with us online. ” Around 10% of the firm’s Hong Kong online orders come from mainland China “You see more and more consumers who are looking for an ‘omni-channel experience’—more and more women are in stores and are actually checking on their mobile what the better... rise in mobile payment options presents a possible way around this shortfall © The Economist Intelligence Unit Limited 2014 In conducting the survey, respondents were screened to ensure they were Internet users One in ten respondents approached for the survey confirmed that they were Internet users This is in line with other surveys conducted in India 5 29 On the rise and online: Female consumers in. .. 30 © The Economist Intelligence Unit Limited 2014 53% On the rise and online: Female consumers in Asia promising markets But in the picture of a diverse and rapidly developing regional industry, some consistent trends are clear With the rise in choices and sources of information has come a more international consciousness; the image, cost and quality of products are increasingly measured according to... motivator for married women and working women, with around 60% of each group agreeing or strongly agreeing they shopped online to save time, versus 54% of single women © The Economist Intelligence Unit Limited 2014 15 On the rise and online: Female consumers in Asia Availability and choice of products also contributes to online retail’s allure, again for Chinese and Indian women in of women with children... according to China-based iResearch Online shopping in [mainland] China has already partly replaced offline shopping (It’s) become a part of daily life,” says iResearch senior analyst Jodie Ding Among Chinese women surveyed, 69% preferred online to offline shopping, and 63% classed online shopping among their favourite past times—both the highest rates in the region Consumers in Taiwan and Macau were... the rise and online: Female consumers in Asia 5 Connecting with the new Asian female consumer With Asian women now able to take their pick from a truly global array of retail and product options, brands must work harder than ever to build connections and loyalty with their buyers In some ways the online retail environment has made this more difficult, lacking the possibilities for camaraderie and physical ... online: Female consumers in Asia Preface On the rise and online: Female consumers in Asia, is an Economist Intelligence Unit report, commissioned by VIPSHOP The EIU conducted the survey and interviews... empowered female consumers, particularly in the online environment © The Economist Intelligence Unit Limited 2014 On the rise and online: Female consumers in Asia Changing demographics, control... unsurprisingly given the region’s diversity, it takes varying shapes Asia s largest On the rise and online: Female consumers in Asia Why they shop online (% respondents) 62% They get the best price online