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Loyalty Program Use Lags in China

But consumers display willingness to trade data for rewards

February 8, 2017 | Retail & Ecommerce

Consumers in China trail other countries when it comes to loyalty programs, but they also indicate a strong willingness to sign up for them. According to Nielsen’s “2016 Global Loyalty-Sentiment Survey,” 61% of internet users polled in China participated in a loyalty program. That’s lower than the worldwide average (66%), and considerably behind the levels in Southeast Asia (72%) and India (74%).

Internet Users in Select Countries in Asia-Pacific Who Are vs. Aren't Willing to Share Personal Data in Exchange for Benefits/Rewards, Summer 2016 (% of respondents)

But Nielsen also found that respondents in China were very interested in signing up for loyalty programs. In fact, 86% of those surveyed said that, all other things being equal, they would prefer to make their purchases from a retailer with a loyalty program than from one without.

One thing is clear: If loyalty programs are to take off in China, they must be designed with smartphone users in mind. That’s not just because China is a famously mobile market, where more than 95% of internet users rely on smartphones to access the web, according to the China Internet Network Information Center (CNNIC). It’s also because those consumers want to use mobile apps for loyalty. Nielsen’s survey revealed that more than eight in 10 (84%) respondents said they would prefer mobile app loyalty programs that automatically earn them points.

Consumers in China also display a willingness to part with personal data in order to access the types of perks that often come with loyalty programs. A global survey of internet users conducted by GfK in the summer of 2016 found that 38% of respondents in China would share information like financial data and personal health data to take advantage of benefits or rewards. That compared with just 25% of respondents in the US, and 16% of those in the UK.

A November 2016 survey of internet users in China by Japan’s GMO Research found that 41.2% of respondents were willing to register with a program or provide personal information in order to earn points for a reward program. That compared with just 13.3% of respondents in Japan willing to do the same.

Man-Chung Cheung

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