Understanding the Digital Savvy Chinese Car Buyers 2015

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CHINA CAR MARKET •  2014 Total sales: 19.7Million Units* •  Sales increment: 9.89%* •  Estimated 2015 Market Size: 140 Billion (AUD)*

•  The car owner age group is getting younger, the 18-29 group, surpassing the 30-45 group, has the highest percentage of car ownership.**

•  63.7% consumers will use Internet as a main information source before making the purchase decision, increased by 81% comparing to the percentage of 2008 (35.1%)***

Data source: *China Association of Automobile Manufactures 2014 ** Credit Suisse Consumer Survey 2014 ***China Automobile Dealer Association

COMSUMER ONLINE BEHAVIOUR KEY TRENDS

#1 Brand Participation #2 Trust In Word Of Mouth #3 Smartphone Addiction #4 Socialized Online Shopping

#1 BRAND PARTICIPATION •  Today’s online consumers are more proactive to initiate enthusiastic

conversation about brand and product. They involve themselves in brand participation online.

•  Car owners and fans set up the brand forums or blogs, interact with each other, share their comments and experience, give each other suggestions about car purchase and maintenance and even organize offline driving and travelling activities. They generate tons of content to advocate their love or hate for the brand and product.

#2 TRUST IN WOM •  The skeptical car buyers no longer believe in the information from advertising

and dealers. Instead, they turn to other netizens for suggestions. Before they make their purchase decision, they will spend hours and hours to research other buyers online product review and take serious consideration of key opinion leaders (KOL)’ (such as auto bloggers) car model recommendations.

•  According to Autohome.com.cn, China’s biggest auto vertical portal, 48% potential car buyers will visit the site and checking reviews and ratings before purchase.

#3 SMARTPHONE ADDICTION •  With 527.1 million smartphone users in China (2014), it is not being exaggerating

to say that Chinese consumers are into the generation of phubbing (a term to describe over frequent use of phone). Smartphones have been a part of their life. Over 70% China consumers state that it is important for them to have Internet access anywhere, anytime.

•  With social applications nested in the phones, busy modern citizens can share their driving experience pictures with family and friends, follow and comment on their favorite car editors’ updates, make their car maintenance appointment and purchase their car insurance on the go.

#4 SOCIALIZED ONLINE SHOPPING •  WithIn China, the average online purchases number is 5.9 times per month

(Campainasia.com), almost twice as much as the rest of the world. Consumers even purchase high involvement products such as cars. According the record, Buick Taobao online store sold 51 units of Encores in Oct 2014.

•  Meanwhile, for China’s netizens, online shopping is mixed with social. With China’s 500+ million-user social platform WeChat (Tencent, 2014) added the payment function in 2013, consumers’ seamless combination of “buy & share” process are becoming a new trend.

IMPLICATIONS

#1 Open Culture #2 Join The Conversation #3 Mobile Integration #4 Transparency

#1 OPEN CULTURE •  More and more automotive companies open their arms and

start to harness the power of social media in product design, service improving, experience providing. They actively listen to what car owners and intenders are talking about across online channels, embrace and adopt the new ideas from the netizens. Campaigns such as Volkswagen’s People’s Car project and Skoda’s Clever Together project are the perfect examples of getting insights from consumer participation.

#2 JOIN THE CONVERSATION •  It is the end of brand monolog. Companies no longer

monopolize the information channels. Social media enables customers share good or bad experience with millions of people in seconds. Each blog, Weibo account is an individual media. Car companies have to cope with this change, and put down their arrogance to listen and talk to the customers, understand their needs and thoughts, manage customer expectations in a democratic way

#3 MOBILE INTEGRATION •  Armed with more and more technologies, mobile-based

social media channels could be an integrated platform for customer acquisition and retention. Big car brands such as BMW, Volkswagen start to set up their social CRM platform on WeChat, nesting themselves in customers’ pocket. Several car brands set their Weibo metrics with brand account integrated with dealers’ account, enables awareness, engagement and conversion at one platform.

#4 TRANSPARENCY •  After sales used to be a grey zone. Both car companies and

car owners always felt frustrated about dealers’ service and random price. With social media, owners and companies have direct and convenient communication channel, which eliminate the darkness in the middle and boost a transparent, standardized service and price.

OPPORTUNITIES & THREATS  

OPPORTUNITIES #1 Strong Customer Relationship #2 Cost Efficiency THREATS #1 Brand Image Inconsistency #2 Risk Management Demands

OPPORTUNITIES #1 STRONG CUSTOMER RELATIONSHIP

•  With relevant and meaningful content in digital and social channels, deep relationship with customers will be easily built. Brands are becoming more human through constant conversations with getting customers more involved. Therefore, it makes possible to have high customer loyalty and advocacy.

OPPORTUNITIES #2 COST EFFICIENCY

•  Most digital and social media channels are free to use, as having part of the media nature, a great part of brands’ social media practice will involve understanding customers’ voice and creating right content to trigger the action. Moreover, good content will viral itself widely. Therefore, the expensive TVC production and media buying seem unnecessary in some circumstances.

THREATS #1 BRAND IMAGE INCONSISTENCY

•  With more and more voices talking about the brand from customers, KOLs, brand and competitors, the brand image is becoming fragmented and cluttered. It’s very hard to keep a very consistent brand image online. Meanwhile, as brands are trying to be more “speak to” the online customers, some brands will face the dilemma of entertaining their Weibo followers and retaining its elegant and traditional brand image.

THREATS #2 RISK MANAGEMENT DEMANDS

•  Everyone will be shocked at how fast bad news could be all over online. For automotive marketers, it is a big challenge. With relatively big investment, buyers always want to prevent the risk of product. Hence, a quick responsive and genuine manner is required.

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