Nielsen's latest 2016 China Hypermarket/Supermarket Shopper Trends Report shows that penetration of convenience stores and online shopping in the past month rose from 32% and 19% last year to 38% and 35%, respectively. This trend demands transformation from traditional hypermarkets and supermarkets, while also intensifying competition among online platforms with homogeneous product categories, presenting new challenges and opportunities for retailers and manufacturers.

The survey shows that the impact of relatively lower prices online on consumer shopping has increased significantly compared to last year, jumping from 42% to 61%. The convenience of price comparison rose from 41% to 56%, and 54% of consumers shop online for home delivery services, up from 42% last year. Meanwhile, with the increase in available e-commerce channels, consumers are becoming more discerning, focusing on different benefits from different e-commerce channels based on their specific needs and selecting different product categories and services accordingly.

"Overall, the average basket size in offline channels has decreased due to changes in shopping purposes. Previously, shoppers would visit hypermarkets/supermarkets for 'bulk stocking,' but this year's data shows a decline in that proportion. Consumers, especially younger ones, increasingly prefer convenience stores and online channels for their purchases. Additionally, offline shoppers are paying more attention to pleasant shopping experiences and promotions. Compared to physical stores, the relatively lower prices, convenient price comparison, and home delivery services are the main drivers for online shopping," said Ding Xia, Vice President of Nielsen China.

Nielsen research also shows that in 2015, penetration of hypermarkets and supermarkets slightly recovered, with 78% and 82% of respondents having visited a hypermarket or supermarket in the past month, still maintaining a clear advantage over other modern channels. Shopping frequency remained stable, but the average basket size decreased from 172.4 yuan in 2015 to 162.7 yuan, reflecting a reduction in "bulk stocking" trips. Regular large-scale shopping trips fell from 24% in 2014 to 22%, with more trips for general replenishment (38%).

However, in terms of sales and penetration, hypermarkets/supermarkets continue to lose market share. As the convenience of convenience stores and online shopping becomes more ingrained, shopping frequency in these emerging channels is also increasing. Young people constitute the main force of these emerging channels. Data shows that penetration of convenience stores and online shopping rose from 32% and 19% last year to 38% and 35%, respectively, outpacing the recovery of hypermarket/supermarket penetration.

Nielsen found that consumers are paying more attention to the shopping experience in hypermarkets and supermarkets, which will be their advantage. The increased importance of "pleasant shopping experience" (86%), "clean and tidy product displays" (86%), and "clean and hygienic store environment" (90%) confirms this. Meanwhile, "good staff service" (94%), "wide product variety" (92%), and "easy access" (90%) remain the most important factors for consumers.

In 2015, 19% of respondents said they had visited a new or different hypermarket/supermarket within six months. Reasons for visiting a new store include a new store opening nearby (55%) and good reputation (46%), highlighting the importance of location and brand image.

Therefore, hypermarkets should focus more on improving brand image, conducting interesting promotions and campaigns to retain loyal customers and increase their basket size. Additionally, developing new customers through opening new stores and expanding e-commerce channels is also crucial.

Nielsen's 2016 China Consumer Confidence Index latest survey shows that in 2015, consumers' personal financial situation and employment expectations indices slightly declined, while willingness to spend continued to rise to 48, reaching a historical peak. Shoppers have a strong desire to spend, but will be more cautious about prices when shopping.

Nielsen's report shows that the proportion of price-sensitive shoppers rose from 15% to 19%, a four-percentage-point increase year-on-year. These online shoppers are older (mostly over 35), with lower education and income levels, and typically focus most on price, considering price first when selecting products.

The report shows that discounts and promotions remain effective ways to attract consumption, with 68% of shoppers making online purchases during discounts or promotions. Meanwhile, major e-commerce platforms are making every effort to satisfy online shoppers' desire for low prices and promotions, with shopping festival penetration reaching 95% among online shoppers. As various shopping festivals proliferate and e-commerce promotions become diverse, the intensity of price wars among merchants is increasing.

After replacing laptops as the preferred device for online shopping among Chinese respondents last year, mobile phones have further increased in importance. Nielsen's survey shows that 59% of consumers use desktop computers for online shopping, 57% use laptops, but 81% of online shoppers use mobile phones.

When asked why smartphone online shopping is becoming increasingly popular, convenience is the primary consideration, with 71% of consumers saying that using smartphones for online shopping offers convenience that computers do not. Additionally, 52% of consumers say convenient payment methods are a reason for mobile shopping, up 10 percentage points from last year, followed by payment security (39%), which is also an important factor driving online shopping.

Nielsen's data confirms the trend of Chinese consumers shifting to mobile digital channels for online shopping. The data shows that compared to last year, the proportion of online shoppers using mobile payment apps rose from 96% to 99%, with mobile payment apps covering almost all online shoppers.

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