77% of Chinese respondents believe global brands are usually more expensive than local brands, 72% believe global brands offer the latest product innovations compared to local brands
67% say global brands offer higher quality than local brands
Beijing – July 20, 2016 – Ninety one percent of Chinese respondents say a brand’s country of origin is as important as or more important than other purchasing drivers such as selection/choice, price, function and quality, according to findings from the Nielsen Global Brand-Origin Report. The new research examines whether consumers prefer goods produced by global/multinational brands (defined as those that operate in many markets) or by local players (those operating only in a single market—the respondent’s home country), based on responses from more than 30,000 online respondents in 61 countries spanning 40 categories.
Online platforms are important channels for Chinese consumers to search for or buy global brands, with 47% respondents doing so for clothing and shoes, 56% for computers and laptops, 48% for food and drinks, 47% for personal care and beauty products, 46% for mobile phones, 34% for home cleaning products, 30% for cars and 20% for baby care products.
In total, 77% of Chinese respondents strongly agree (32%) or somewhat agree (45%) that global brands are usually more expensive than local brands, 72% people strongly agree (27%) or somewhat agree (45%) global brands offer the latest product offerings/ innovations compared to local brands, and 67% of respondent strongly believe (25%) or somewhat agree (42%) that global brands offer higher quality than local brands.
“One of the more surprising findings from the survey is that country of origin is as important as—or even more important than—other purchasing criteria such as price and quality,” said Patrick Dodd, group president, Nielsen Growth Markets. “In a crowded retail environment, brand origin can be an important differentiator between brands, but sentiment varies by category and by country, and leveraging a powerful brand presence needs to be managed carefully regardless of whether it is global or local. Ultimately, the brands that deliver on a strong value proposition and connect personally to consumers’ needs will have the advantage in any given market.”
THE WHY BEHIND THE BUY
Why do Chinese consumers choose global brands over local brands or vice versa? When asked to select the top three decision factors for choosing a global or a local brand, Chinese respondents offered answers emphasizing the factors that typically are top rated in Asia Pacific consumer surveys. Safer ingredients and processing were the top-selected reason for choosing global (50%) and local (38%) brands. Better price/value (30% for global brands, 38% for local), better product benefits (34%, 24%), previous positive experience with the product (28%, 27%) and better overall nutrition on the brand (28%, 24%) were also among the top-selected reasons for selecting a product.
Interestingly, national pride is the only selection factor for which there is a notable difference between local and global brands among countries, which is unsurprising, given that one would not buy a global product for reasons of national pride, unless it was a global product widely recognized as ‘American’ such as Marlboro, or ‘Japanese’ such as Toyota. One-fifth of the Chinese respondents (21%) say national pride is the most important reason they buy local products, which is equivalent to the global average. This particular sentiment is highest in Africa/Middle East (25%), Asia-Pacific (24%) and Latin America (21%) and lower in Europe (16%) and North America (10%).
LOCAL BRANDS HAVE ADVANTAGE IN FOOD AND BEVERAGE CATEGORIES
For fresh foods, local brands are, not surprisingly, the clear preference for Chinese consumers. The majority of Chinese respondents who have purchased the category say they prefer local brands to global ones for vegetables (71% vs. 9%), meat (67% vs. 11%), fruit (66% vs. 10%), seafood (58% vs. 16%) and yogurt (58% vs. 16%). The preference for local brands holds for nearly every fresh category in China. Local brands are also preferred for food and beverage categories in China, and Chinese would like to actively seek via online sources to search/buy local (48%) and global (28%) food and drink products. Chinese respondents prefer local brands for juice (47%), water (56%) and milk (46%). Among those who purchase carbonated soft drinks, global brands (39%) are preferred in China than local brands (32%), and 28% say brand origin is not important to them.
For packaged foods and snacks, local taste preferences dominate in China. Local brands are preferred to global brands for ice cream (38% vs. 29%), crisps/crackers (36% vs. 28%), breakfast cereal (50% vs. 21%), instant noodles (51% vs. 17%) and canned vegetables (52% vs. 10%).
GLOBAL BRANDS ARE PERCIEVED AS QUALITY FOR BABY CARE CATEGORIES
Global baby food and formula brands are greatly preferred in China. The Nielsen survey found that worldwide the strongest preference for global brand baby food and formula comes, unsurprisingly, from respondents in China, where in recent years product-quality issues for local baby food and formula have made headlines. About 54% Chinese respondents said they prefer global brands, and 30% said would more likely to purchase local brands.
“For many categories, a global brand name is an indicator of quality, safety and trustworthiness in emerging markets,” said Dodd. “In North America and Europe, the baby-care product industry is highly regulated, and consumers may automatically expect that the baby foods they buy are safe and nutritious. For these consumers, local brands carry an assurance of quality.”
CONSUMERS LOVE GLOBAL BRANDS FOR PERSONAL CARE AND BEAUTY
For personal-care and beauty products, global brands are the clear favorite in China. Global brands are preferred to local for razors (34% vs 26%), shampoo and conditioner (38% vs 33%), cosmetics (53% vs 19%) in China. Local brands are preferred for toothpaste, hand and body soap, and hand and body lotions, and deodorant.
The survey found that 47% Chinese respondents seek online channels to search/buy global personal care and beauty product brands, in contrast, only 28% respondents search and buy local brands online.
“Global brands are able to leverage their scale and expertise, research and development capabilities, and strong brand equity to provide high-quality and innovative personal-care products to local markets around the world,” said Dodd. “In addition, in some markets, the number of local brands is limited for nonedible categories, so consumers naturally gravitate to offerings from global brands because they are widely available.”
ABOUT THE NIELSEN GLOBAL SURVEY
The Nielsen Global Homecare Survey was conducted Aug. 10 – Sep. 4, 2015 and polled more than 30,000 online consumers in 61 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes Internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of Internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.9% at the global level. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion.
ABOUT NIELSEN
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content—video, audio and text—is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the world’s population. For more information, visit www.nielsen.com.