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China’s Toy Shoppers: The Online Dimension podcast

An increasing number of mainland parents search for toys online. According to HKTDC’s report “China’s Toy Shoppers: A Purchasing Behaviour Survey”[1], 749 of them (46%) have purchased toys online for their children or as gift. Compared with the 2010 survey when only 14% of the parents had purchased toys online, the proportion of parents buying toys online has risen markedly. It is worth noting that the growth rate of online shopping for toys in second-tier cities is higher than that in first-tier cities.

Chart: Have shopped for toys online in the past year
Chart: Have shopped for toys online in the past year

The main reason for buying toys online is that prices are lower than those in physical stores. Today, consumers can compare prices on the internet at any time and some shopping directory sites (e.g. egou.com and 365huiji.com) even do price comparisons for consumers so that they can easily buy toys at competitive prices. The survey finds that the reason given by parents in Nanjing (79%) and Wuhan (77%) for buying toys online is lower prices, their proportion is considerably higher than that in other cities. Parents in Beijing (49%) and Nanjing (44%) indicate that they choose online shopping because they do not have the time to go to shops to make purchase, their proportion is higher than that of the overall parents (31%). By household income, parents with a monthly household income of Rmb7,000-8,999 are more price sensitive than parents in other income groups, with 75% of them saying that they choose online shopping because prices are low.

Table: Reasons for buying toys online
Table: Reasons for buying toys online

Urban people lead a busy life. As online shopping has no time or geographic limitations, consumers can shop for products wherever or whenever they like. Another advantage of online shopping for toys is goods delivery. Purchasing large toys (such as game tables, rocking horses, multi-function kitchens) online can save the buyer the trouble of taking the goods home themselves. Some surveyed parents point out that many of their relatives and friends live in other cities, so when they buy toys as gift for their children they would usually shop online because the toys would be delivered to their relatives and friends’ house, saving time and energy. This survey shows that 65% of the parents in Wuhan, 64% in Shanghai, 63% in Nanjing and 62% in Guangzhou give “convenience/ delivery available” as the reason for shopping online, higher than the proportion of overall parents (56%).

Both the styles and categories of toys offered online are richer than those in physical stores. A small number of parents would even buy toys for their children through overseas purchasing websites, because children who have special toys are more popular with their peers. However, parents also point out that buying toys of foreign brands through overseas purchasing websites requires longer delivery time and there is always the risk of the goods being detained by Customs. So they do not often buy toys on overseas purchasing websites. During home visits, some parents make the following remarks:

“When I go on business or pleasure trips abroad, I would visit toy stores and buy toys which are not available on the mainland, such as buying wooden Thomas the Tank Engine and railways in Thailand.”

“I would ask friends who often go on business trips abroad to buy some foreign brand toys for me.”

Online shopping platforms

According to a report compiled by McKinsey Global Institute, third-party trading platform[2] is the major online retail mode in China, accounting for 90% of the country’s online retail market, while independent online shops take up the remaining 10%. This survey also confirms that the parents surveyed mainly purchase toys via third-party trading platforms, with 79% of them indicating that they buy toys on taobao.com, followed by Tmall.com (56%) and jd.com (39%).

Table: Online shopping platforms for toys
Table: Online shopping platforms for toys

It is worth noting that taobao.com is a C2C (consumer to consumer) platform, whereas Tmall.com is a B2C (business to consumer) platform[3]. Since transactions on C2C shopping websites are conducted between individual consumers and the vendor may not be able to guarantee the quality and safety of the toy or offer after-sales service, the interests of the buyer are less well protected. As for B2C shopping websites, since the corporate vendor (which can be a manufacturer, supplier or retailer) has a stronger clout, better product assurance and after-sales service can be offered. Many B2C shopping sites acting as third-party trading platforms have set up flagship store special zones for companies. The surveyed parents point out that they have the impression that these flagship store special zones offer genuine products and competitive prices, so when they plan to buy toys for their children they would first visit the flagship stores of well-known brands and conduct a search.

Search keywords for toys

According to the parents surveyed, when searching for toys online, they would use different keywords, including product category (e.g. remote-control car, building blocks), gender of the child (e.g. girls’ toys), age of the child (e.g. toys for age 3-6), toy functions (e.g. science experiment, DIY toys), toy brand and price range. Naturally, parents would also use a string of keywords (e.g. girl, age 3-6, princess toys) to search for the right toy.

The majority of parents point out that they would use product category (61%) as the keyword for searching for toys online. Parents with children under age 6 tend to use the child’s age as keyword in searching for the right toys. Some parents at the focus group discussions indicate that they would pay attention to the “suitable age” marked on the packaging of the toy, because if the toy is too simple their children would not be interested but if the toy is too sophisticated their children would lose patience or suffer from a sense of failure. However, parents do not mind buying toys with the “suitable age” older than their children’s because even if their children do not play with it now, they can play with it when they grow older. It is mentioned earlier that as children grow older they would have greater brand awareness, hence, the proportion of parents with children aged over 6 and using “brand name” as the keyword for searching online is higher than that of the overall respondents.

By the child’s gender, the proportion of parents with boys (65%) using product category as keyword for searching is considerably higher than that of parents with girls (58%). Meanwhile, the proportion of parents with girls (51%) using the child’s gender as keyword for searching is considerably higher than that of parents with boys (40%).

Table: Popular keywords used in online shopping
Table: Popular keywords used in online shopping

Among different cities, parents in Guangzhou tend to use “function and feature” (58%) and “price” (33%) more as the keyword for searching, while parents in Nanjing tend to use “brand name” (46%) and “price” (26%) more as the keyword for searching. These proportions are higher than those in other cities.

 


 

[1]  The Hong Kong Trade Development Council (HKTDC) conducted a consumer survey from January to March 2014. The survey covered eight mainland cities where a questionnaire survey of 1,600 parents with children aged 14 and below was carried out. The eight cities are Beijing, Shanghai, Guangzhou, Chengdu, Wuhan, Shenyang, Nanjing and Xian. Apart from the questionnaire survey, six consumer focus group discussions and 30 home visits were conducted in the three cities of Guangzhou, Shanghai and Chengdu.

[2]  Third-party trading platforms also handle C2C (e.g. taobao.com) and B2C (e.g. Tmall.com) transactions.

[3]  For further information, please see E-tailing in China: a key sales channel.

Content provided by Picture: Alice Tsang
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