Nielsen: retail loyalty programme is key to winning market share in China

Eighty-six percent of Chinese respondents agree that all other factors equal, they will buy from a retailer with a loyalty programme over one without, higher than the global level (72%), according to Nielsen’s Global Loyalty-Sentiment Survey..

Vishal Bali, managing director of Nielsen China, said a retail loyalty programme can be an effective way to create competitive advantage by reducing customers’ likelihood to switch stores.

“The ultimate goal for using loyalty data is to provide consumers better shopping experience so as to attract more consumers. To improve the shopping experience, retailers need to consider exclusive rewards and in-store experiences that are unique to their location or brand positioning and make it engaging and fun to participate for all generations of consumers,” said Bali.

Participation in retail loyalty programme in China still has space to grow
According to the Nielsen report, Chinese consumers are not actively participating in retail loyalty programmes compared to the consumers in other countries. On average, the number of retail loyalty programmes that each person participates in is only 2.14 in China, while the global average stands at 2.39. And the participation rate in Greater China (61%) is a bit lower than the figure worldwide as well (66%), and much lower than the percentage in India and Southeast Asia, where almost three-quarters of consumers with online access say they participate in one or more retail loyalty programmes (74% and 72%, respectively).

However, this situation might be changing, as Chinese retailers are now focusing more on loyalty programmes. E-commerce is growing fast, and off-line retailers are under intense pressure to protect their share and their consumers. Additionally, more Chinese consumers are paying greater attention to the quality of products and the overall shopping experience.

Chinese people have high expectations for retail loyalty programmes
Despite the participation rate of retail loyalty programmes not being very high in China, Chinese consumers still show interest in the features of such programmes and indicate they are more than willing to join these initiatives.

The report found that 82% of Chinese respondents would pay a little more for a product from a retailer with a loyalty programme than from a retailer without one. The percentage that loyalty programmes make consumers more likely to continue doing business with a company among Chinese participants is 82%, while globally the percentage is 74%.

Chinese consumers love loyalty programme mobile apps
An interesting finding in this report is that Chinese consumers especially love loyalty programme mobile apps. According to the report, APAC has the highest percentage of loyalty-programme participants in the worldwide study who say store-specific loyalty mobile apps are somewhat or very appealing (69% versus 60% globally).

Mobile apps are particularly popular in China (74%), only slightly lower than that in India (80%) and Thailand (78%). The report found that 84% of respondents in China like to use loyalty programme mobile apps that can automatically earn and use points or rewards.

As Weibo and WeChat develop, sharing products and pages on social networks to win points and awards is also popular in China. About 78% of Chinese respondents say indicated liking these services very much, much higher than that worldwide, which is 61%.