Chinese consumers are increasingly opting for quality goods at higher prices and adopting online shopping and social media to gather product information – two key trends driving company strategy in China.

This is according to a report by The American Chamber of Commerce in Shanghai (AmCham Shanghai) and Booz & Company.

For the second year, companies ranked the evolution of consumers – from price-driven purchasers to value-driven consumers – as the top trend driving their China market strategy, report says.

Chinese consumers, particularly in first- and second-tier cities are seeking greater reliability, consistency and integrity in consumer products.

With the rise of e-commerce and social media, the second most important trend identified in the report, both multinational and Chinese companies reported that they recognise the importance of developing digital marketing and sales channels.

However, the majority of companies declared that they are not yet adequately prepared to convert growing online interactions to a sales advantage.

In contrast, the report noted that leaders in this area demonstrate an ability to make strategic use of data derived from online viewing and purchasing habits, and to align digital activities with their corporate strategies and across organisational functions.

“The report highlights that the use of mobile devices, online shopping and social media is a disruptive business trend. Companies must develop targeted strategies and China-specific capabilities that enable them to respond and beat out competition,” said AmCham Shanghai chairperson Robert Theleen.

“China’s rising middle class have high expectations of consumer products and also a need for product verification. With the rise of e-commerce and social media, online marketing channels and Internet forums offer a platform for consumers to gather the intelligence they need to make informed purchasing decisions,” Theleen continued.

“In China, consumers leapfrog their counterparts in other markets by adopting technologies to gain bargaining power. They are sophisticated in using social networking platforms to form alliances with like-minded consumers, which would be hardly possible in developed markets. Companies have to stay vigilant to the power of the online activities, with opportunities for online engagement to enhance or harm a brand.”