“Despite the enthusiasm surrounding the potential of direct-to-consumer retailing, it has not seen anticipated growth. Brands need to reconsider their strategies on DTC channels in the post-epidemic era. Delivering brand values and philosophies through high-quality branded content and experience online and offline should be a priority for enhancing consumers’ loyalty through DTC channels. Meanwhile, brands could focus on developing ‘high-value’ consumers who have the potential to become repeat purchasers, innovators or key opinion leaders on their DTC channels to further capitalise on their private domain traffic.”
– Toby Xu, Research Analyst
Key issues covered in this Report
- Consumers’ interactions with brands’ DTC channels, especially on the online DTC channels of brands
- Consumers’ spending on brands’ DTC channels and the products they have bought in the past 12 months
- Aspects that matter the most to consumers’ shopping experiences on brands’ DTC channels
- Why consumers keep following brands’ official channels
Collapse All
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Overview
- What you need to know
- Covered in this Report
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Executive Summary
- The market
- Consumers are returning to offline in the post-epidemic era
- Private traffic is integrated into Uni Marketing (全域营销)
- Brand self-operated live streaming becomes the mainstream
- More intelligent customer service would empower brands’ private channels
- Companies and brands
- Delivering a differentiated customer experience in offline stores
- Offering content with distinctive brand characteristics
- Enhancing customer engagement through interest-based community
- The consumer
- Brands’ offline direct stores see great potential
- Figure 1: Consumers’ engagement with brands’ private channels, 2022
- Content/information is key to attracting consumers to brands’ DTC channels
- Figure 2: Behaviours on online DTC channels, 2022
- Beauty and personal care products are most popular on DTC channels
- Figure 3: Spending on DTC channels by category, 2022
- Simplifying the purchase journey matters most
- Figure 4: Aspects important to consumers when shopping on DTC channels, 2022
- Attractive content is critical to retaining consumers
- Figure 5: Reasons for continuing to follow brands’ official channels, 2022
- Enhancing brand-consumer bond in DTC channels
- Figure 6: Attitudes towards DTC retailing, 2022
- What we think
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Issues and Insights
- Enhancing trust with quality brand content on DTC channels
- Figure 7: To summer’ online content and offline experiential store, 2023
- Focusing on developing “high-value” customers on DTC channels
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- Figure 8: Miniso’s co-creation activities and products, 2023
- Enhancing trust with quality brand content on DTC channels
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Market Factors
- Consumers are returning to offline in the post-epidemic era
- Private traffic is integrated into Uni Marketing (全域营销)
- Brand self-operated live streaming becomes the mainstream
- More intelligent customer service would empower brands’ private channels
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Market Highlights
- Delivering a differentiated customer experience in offline stores
- Li-Ning
- Figure 9: Li-Ning’s offline experiential store, 2023
- Philips
- Figure 10: VR experience space in Philips’ offline store, 2023
- Offering content with distinctive brand characteristics
- Zepp Health
- Figure 11: Professional content and activities on Zepp Health’s official channels, 2023
- Tai’er Sauerkraut Fish
- Figure 12: Attractive cartoons on Tai’er Sauerkraut Fish’s official channel, 2023
- Enhancing customer engagement through interest-based community
- Pop Mart
- Figure 13: Members’ comments and messages posted on Pop Mart mini-program and WeChat fan groups, 2023
- Wuling Hongguang
- Figure 14: Wuling Hongguang’s offline community activity, 2023
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Engagement with Brand Private Channels
- Brands’ offline direct stores see great potential
- Figure 15: Consumers’ engagement with brands’ private channels, 2022
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- Figure 16: Consumers’ engagement with brands’ private channels – have purchased, 2021 vs 2022
- Brands’ official live streaming needs to show further differentiation
- Online private channels more popular among tier 1 city consumers
- Figure 17: Consumers’ engagement with brands’ private channels – have purchased, by city tier, 2022
- High-income consumers are willing to try different DTC channels
- Figure 18: Consumers’ engagement with brands’ private channels – have purchased or browsed, by monthly household income, 2022
- DTC channels with social attributes appeal to females
- Figure 19: Consumers’ engagement with brands’ private channels – have purchased or browsed, by gender, 2022
- Brands’ offline direct stores see great potential
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Behaviours on Online DTC Channels
- Content/information is key to attracting consumers to brands’ DTC channels
- Figure 20: Behaviours on online DTC channels, 2022
- Older consumers are more straightforward and hesitant to interact, especially males
- Figure 21: Selected behaviours on online DTC channels, by gender and age, 2022
- Utilising benefits to get referrals from multi-generation families
- Figure 22: Selected behaviours on online DTC channels, by living situation, 2022
- Engaging high-income consumers through shared value
- Figure 23: Behaviours on online DTC channels, by monthly household income, 2022
- Content/information is key to attracting consumers to brands’ DTC channels
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Spending on DTC Channels
- Beauty and personal care products are most popular on DTC channels
- Figure 24: Spending on DTC channels by category, 2022
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- Figure 25: Changes in spending on DTC channels among purchasers in the last 12 months, 2022
- High-income consumers at the forefront of spending on DTC channels
- Figure 26: Consumers who have purchased the following categories from brands’ official channels, by monthly household income, 2022
- Beauty and personal care products are most popular on DTC channels
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Areas of Improvement for DTC Channels
- Simplifying the purchase journey matters most
- Figure 27: Aspects important to consumers when shopping on DTC channels, 2022
- Enhancing the pre-purchase experience for consumers
- Figure 28: TURF Analysis of aspects important to consumers when shopping on DTC channels, 2022
- Satisfying the needs of multi-generation families
- Figure 29: Selected aspects of DTC channels for improvements, by living situation, 2022
- Simplifying the purchase journey matters most
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Reasons for Retention
- Attractive contents are critical to retaining consumers
- Figure 30: Reasons for continuing to follow brands’ official channels, 2022
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- Figure 31: TURF analysis of reasons for continuing to follow brands’ official channels, 2022
- Meeting the social needs of high-income consumers
- Figure 32: Reasons for continuing to follow brands’ official channels, by monthly personal income, 2022
- Connecting with non-spenders with promotions, spenders with emotion
- Figure 33: Reasons for continuing to follow brands’ official channels, spenders vs non-spenders, 2022
- Attractive contents are critical to retaining consumers
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Attitudes towards DTC Retailing
- Consumers trust the information from DTC channels
- Figure 34: Selected attitudes towards DTC retailing, 2022
- Enhancing brand-consumer collaboration in private domain
- Figure 35: Selected attitudes towards DTC retailing, 2022
- DTC channels should lean on service to stand out
- Figure 36: Selected attitudes towards DTC retailing, 2022
- Attracting consumers with more professional sharing
- Figure 37: Selected attitudes towards DTC retailing, 2022
- Consumers trust the information from DTC channels
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Appendix – Methodology and Abbreviations
- Methodology
- Abbreviations
- TURF Analysis – Methodology
- Figure 38: Areas of improvement for DTC channels
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- Figure 39: Reason for retention
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