Retail in Asia

In Trends

89% of Chinese consumers say loyalty programs increase their spending

A new study by customer relations development firm Collinson Group shows that successful loyalty programs are still critical for brand engagement with affluent middle-class consumers in mainland China despite a global decline in memberships.

Out of a survey of 1,524 respondents in the top 10 to 15 percent of earners split equally across China, Hong Kong, and Singapore, 72 percent of mainland Chinese consumers “regard themselves as engaged members of loyalty programs.” This positive reaction is in stark contrast to a negative global trend for loyalty programs, showing the importance of localizing strategies for the China market.

Collinson Group’s report, which was conducted in January by SSI Research and included responses from 6,125 participants around the globe, found that membership to loyalty programs from 2014 to 2015 fell 20 percent. These included programs for supermarkets, airlines, retailers, hotels, media companies, cafes, and credit card providers.

The findings suggest that loyalty programs are key in the overall success of a brand in Greater China—89 percent of mainland Chinese respondents and 87 percent from Hong Kong agreed that a loyalty program makes them want to spend more. But only 45 percent of respondents in Hong Kong feel engaged in loyalty programs, and while 34 percent of mainland Chinese consumers “feel loyalty programs have increased in value over the past year,” 25 percent in Hong Kong feel the same. Collinson Group’s director Chris Rogers called Hong Kong’s survey response an example of what can happen if companies “become complacent.”

“China, Hong Kong and Singapore are vital markets for brands, and we’re seeing a much higher demand for personalized, relevant, and digital customer engagement initiatives than before,” Rogers said in the report. “Given the importance of affluent middle-class consumers on the fortunes of companies, brands must lift their game and focus on how they recognize, engage and reward customers.”

(Source: Jing Daily )