Text 100 Consumer Electronic Index Asia-Pacific

TEXT 100 CONSUMER ELECTRONIC

INDEX: ASIA-PACIFIC

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Introduction

This report is the fourth in a series of Digital Indexes developed by Text100, a global

communications agency. These Digital Indexes are designed to investigate the change in how

and where buyers gain influence in sectors where there has been significant disruption

caused by changes in technology and communications. Previous indexes have provided data

on influence and how people are buying in the automotive, energy and travel and tourism

sectors.

This latest index delves into how consumers are gaining influence as they consider buying

consumer electronics. The consumer electronics buying journey has been dramatically

disrupted and was one of the first sectors to adopt a heavy ecommerce presence. But, over

the last two years additional information and purchase platforms have accelerated the

change. Fundamental shifts in technology, business and society have accelerated how we go

about fulfilling four very basic human needs: communication, collaboration, creation and

consumption. Today, consumers expect a connected and consistent shopping experience

across bricks and mortar, desktop, laptop, mobile, apps, social sites, magazines and many

other platforms.

These platforms have given people greater access to information from vendors, media

celebrities, peers or anyone, at any time, to influence their decision to buy. How consumers

are able to make their purchase has also increased dramatically. This led us to the question:

Has the proliferation of information, influence and ways to purchase changed consumer

buying patterns? We decided to focus our research on the consumer electronics sector.

Along with our research partner Redshift Research Text100 took a deep dive into three sub-

sets of the growing consumer electronics sector:

- Smart Devices and Wearable Technology

- Gaming, Apps and Software; and

- Traditional Electronics and Home Appliances.

Our aim was to understand how the buyers’ journey has changed, what kind of information

consumers want, where they go to get it and when they need it the most.

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Our findings showed that 68% of respondents have already decided what they will purchase

before they step into a store or visit an e-commerce site. This is based on extensive research

conducted offline and online. Even though consumption of smart devices and the use of

multiple online platforms has grown significantly in Asia (specifically mobile), offline word-of-

mouth and media (broadcast and print) still has equal influence as a vendor’s website and

online sharing/testimonials and reviews. Influence varied by sector and country through

across the region, celebrity endorsements had more influence in gaming, apps and software

and smart device decisions than in traditional electronics and home appliance purchases.

Bricks and mortar retail is not dead to the consumers that were surveyed. But, the store

needs to be part of an omni-channel strategy where consumers can connect and consume

information and make purchasing decisions in a consistent and connected way.

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This report looks at ten top observations drawn from our Asia-Pacific wide survey. Our hope

is that by understanding the buyers’ journey better and by taking a less platform centric and

more connected and consistent content approach brands will be able to engage their

audiences at every stage of the shopping journey. Doing so will define the difference between

being in the market and leading it.

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About the study

This installment of the Text100 Digital Index focuses on where people in Asia who are

purchasing consumer electronics devices and appliances gain influence. The study seeks to

understand the most influential information sources and topics as a person moves through

each stage of the buying journey: awareness, intent, action, confidence and finally

advocacy.

THE BUYING JOURNEY

It considers how these information sources and topics vary in importance at each of the

various stages of the consumer journey across each country and in one of three sub sectors

of the consumer electronics sector: namely Smart Devices and Wearable Technology;

Gaming, Apps and Software; and Traditional Electronics and Home Appliances.

The findings are based on online interviews conducted in October 2013 with 2,023

respondents across seven locations: Australia, China, Hong Kong, India, Malaysia,

Singapore and Taiwan.

There was a balanced sample across age and gender.

The research was conducted by Redshift Research.

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Top 10 Observations

1. 2 in every 3 consumers end up buying what they research

On average, 68 % of consumers across all sectors will purchase the product they have been researching. This varies little by age and demonstrates the importance of the “awareness” stage in the final decision to buy. Consistent and connected, up-to-date information and content needs to be available to consumers across multiple platforms. In the purchase of Gaming, Apps and Software, people discover products on social media sites at the awareness stage and only go to retail outlets once they have the necessary information to make the purchase. Price (37%), customer reviews (36%), compatibility (33%) and accessories (32%) are the top research topics for gaming, software and apps.

AWARENESS INTENT Offline word of mouth Social media (online word of mouth) Personal experience Traditional media Online specialist and technical sites Online price comparison and consumer sites Manufacturer’s website Visit to a retail outlet

36% 34%

33% 33%

30%

27% 22% 21%

Offline word of mouth Social media (online word of mouth) Personal experience Traditional media Online specialist and technical sites Online price comparison and consumer sites Manufacturer’s website Visit to a retail outlet

37%

33% 37% 33%

35%

28% 26% 26%

Word-of-mouth (57%) and media (50%) rate highly as an information resource at the awareness and intent stage for Smart Devices and Wearable Technology purchases. Word-of-mouth declines to 51% and media declines to only 35% during the action and confidence stages. The retail outlet takes on a larger role once the action is taken. Product specifications (61%), purchase price (60%) and customer reviews (55%) topped information topics researched prior to action.

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In the awareness and intent stages of purchasing Traditional Electronics and Home Appliances, visits to retail outlets (43.5%) and the media (41%) were the most popular information sources. This was the only sector that the media and retail topped the sources. Media becomes less important once the decision is made, but the retail outlet stays key suggesting that this is still the number one destination for information and purchasing of traditional electronics and appliances.

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2. Smart Devices and Wearable Technology could be this year’s holiday hot sellers

More than 80 per cent of all respondents are

currently looking to purchase Smart Devices or

Wearable Technology; 55% of respondents are

looking to purchase Gaming, Apps or Software; and

47% plan to purchase more Traditional Electronics or

Home Appliances.

This is particularly the case in China with more than 90% looking and in Australia where

80% are looking to purchase Smart Devices or Wearable Technology in the next 12

months.

And for those in the 25-34 year age bracket, their propensity to purchase, and do so in all

three categories in the next 12 months, is very high.

82%

55%

47%

65%

60%

90%

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3. The Gaming, Apps and Software decision process is the quickest

Consumers are 20% more likely to make a purchase

decision within one week of becoming aware of the

need for Gaming, Apps and Software than for other

consumer electronics products. This compares with

the average consumer electronics purchase taking

within a month of the buyer becoming aware of

needing a product. This suggests the time which

such brands have to inform and convince people to

purchase a product is shorter than any other

consumer electronics device.

The younger the target audience, the more sources and topics they engage with and search,

particularly in the early stages. 18-24 year olds predominantly use social media sites and

online web reviews and price/comparison sites to get information on gaming, software,

devices and new apps. The younger demographic surprisingly also predominantly used retail

outlets as the main source of information for traditional electronic products and appliances.

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4. Justifications for purchase vary significantly

Why do we buy things? The research found that

consumers justify their purchases differently depending

on what sort of technology they were buying and

where they’re located.

In general Malaysian respondents use more reasons to

justify their purchases particularly in the Smart Devices

and Wearable Technology sectors.

a. For Smart Devices and

Wearable Technology, the most

common reasons for purchase are to take advantage of improved

functionality (58%) or replacing older versions (61%). Slightly less

important (but still of significant importance) was staying trendy or current

(49%). Those aged 18-24 were more likely to purchase replacements for broken devices

(56%) than the total survey group, and were also more likely to buy because an item was the

newest / latest version (59%).

b. The top reasons for purchasing Gaming, Apps and Software are newness (37%), testing

if a product suited the buyer’s fancy (33%), and recommendations from friends (35%). 18-24

year olds justified their purchases with more reasons than other age groups; and are more

likely to purchase products recommended by a friend than the total group.

c. The most common reason people invest in Traditional Electronics and

Home Appliances is to replace something that is broken (47%), followed by

purchasing in a style that fits with the home (38%). The style conscious 18-

24 year olds were as likely to buy a new appliance if the old one was

broken (41%) or to match the rest of the domestic landscape (41%).

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5. Online and offline Word-of-Mouth hold equal sway

No matter the stage of the buyers’ journey, word of

mouth was the most important information source

across all the different stages for the Gaming, Apps, and

Software and Smart Devices and Wearable Technology

sectors.

Offline Word of Mouth

Online Word of Mouth

Gaming, Apps and Software

35% 32%

Smart Devices and Wearable Technology

54% 45%

Traditional Electronics and Home Appliances

37% 26%

In the awareness stage, online sharing (35%), online specialists (35%) and personal

experiences (40%) also all ranked highly in all sectors, with retail rising in importance for

Smart Devices and Wearable Technology. That suggests brands need to invest in providing

individually-tailored advice and “subject matter expertise” to their audiences: by doing so,

they can tap into the word-of-mouth cycles that already make or break the majority of

purchases.

Of all the countries in the survey, consumers in Malaysia and India use social media and

online peer recommendations rather than offline word of mouth recommendations. Hong

Kong consumers also use online news, review and price comparison sites extensively.

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The exception was Traditional Electronics and Home Appliances, where broadcast media

(43%) was the most important at the “awareness” stage of the journey. For the other stages,

in the purchase of more traditional

electronics, retail outlets (45%) comprised

the most important point of influence;

word-of-mouth (38%) and personal

experiences (37%) continued to have

substantial influence throughout the

remainder of the journey.

Retails outlets are much less important to Chinese respondents compared to the rest of Asia.

Online news, lifestyle and price comparison websites are the information source most used

in China for the purchase of any consumer electronics device.

a. Gaming, Apps, and Software

o Online sharing was less important in the action and confidence (29%) stages versus the

awareness and intent (34%) stages

o Information on price and compatibility is important at the beginning, but less so as

consumers progress. Consumers do expect accessory information early on, though.

b. Smart Devices and Wearable Technology

o Word of mouth (57%) is the most significant source of influence in the awareness and

intent stages

o Personal experience (57%) is important at “intent” stage.

o Manufacturers’ websites are particularly important.

o Consumers expect all information at “awareness” stage, including guarantees /

warranties, compatibility, accessibility, and tech support.

c. Traditional Electronics and Home Appliances

o One big difference is that consumers use about the same number of sources at the

“confidence” stage as during the “awareness” stage.

o Retail important throughout the decision-making process.

o More than half expect to hear about guarantees and warranties at the “awareness”

stage.

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6. Purchase price, customer reviews and product specs were the top topics of

interest

There were only minor differences in the top

information types that people looked for across the

various sub sectors. 50% of people most wanted to

know about purchase price at the awareness stage,

72% at the intent stage, 48% at the action stage and

42% at the confidence stage.

Consumers in Hong Kong and Singapore were the most

price conscious of all respondents.

Peer reviews (43%) were very important to those

buying gaming software and apps in the 18-24 year old

group. Whereas, only 36% of the total surveyed said

customer reviews were a key topic of influence.

Product specifications take on greater importance when consumers look to purchase Smart

Devices and Wearable Technology (56%). Product specifications for Gaming, Apps and

Software (34%) and Traditional Electronics and Home Appliances (43%) were not as

significant. The only sector where celebrity endorsements (32%) seemed to make an impact

is in the Smart Devices and Wearable Ttechnology sector with the 18-24 year olds. In the

Gaming, Apps and Software sector (16%) and in the Traditional Electronics and Home

Appliances sector (17%) celebrity endorsements were not rated highly amongst all

respondents.

Consumers across all sectors are more concerned about the practical details of consumer

electronics, seeing and hearing what others’ experiences are rather than hearing about

celebrities using the devices.

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7. Omni channel crucial to young adults

In general, those aged 18-24 use more information sources and search for more topics. In

particular, this group sources information from social media sites (26%) and online review and

technical sites (27%) when purchasing Gaming, Apps and Software and Smart Devices or

Wearable Technology. Overall, they are using more information sources than the other

respondents at the intent and confidence stages. The top information sources on customer

reviews for the smart devices and new technology sector are: social media sites, word of mouth,

specialist online web sites, general web sites, visits to retail outlets, the manufacturers’ web

sites, traditional media and personal experience.

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8. Potential growth in second hand economy

People are more open to purchase Gaming, Apps, or Software second-hand than other sub-

categories. 36% of respondents would purchase second hand Gaming, Apps or Software

versus 23% for Smart Devices and Wearable Technology and 24% for Traditional Electronics

and Home Appliances.

The propensity to purchase brand new or second hand does vary by age and location. In

Taiwan consumers were as likely to purchase second hand as they were to purchase new.

Taiwan respondents were also those most likely to purchase because their old device or

appliance had broken.

Those in the 25-34 age group are most likely to purchase new (76%). Those most likely to

purchase second hand are in the 18-24 group (72%) and in the 55+ age group (67%). Taken

together with the finding that online sharing and peer reviews are relatively important in

choosing Gaming, Apps or Software, brands may do well to support and engage with user-

based trading of products and experiences – rather than making enemies of consumers by

clamping down on their behaviours.

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9. Early Adopters act faster with more data

In all of the markets, there tend to be certain

individuals who will test, purchase, and advocate

new technologies at a faster and more frequent

rate than others. The study found that, cultural

nuances notwithstanding, these individuals tend

to be males who are around 35 years of age. And

while these early adopters have a higher

propensity to buy electronic goods in all product

areas, they are especially likely to buy Gaming,

Apps or Software: 65% plan to do so in the next

12 months, compared to just under-50% in all of

APAC.

In addition, 86% of 25-44 year olds are likely to purchase Smart Devices and Wearable

Technologies versus 75% over the age of 45. Across all markets, males are more likely to be

solely responsible for purchasing technical devices (56%). In particular in Australia, the male

householder is heavily involved in the consumer electronics decision making process.

Early adopters – who often fill the role of trusted advisor for their family and friends’

purchases – are more likely to make fast decisions on purchases than your typical APAC

consumer. 68% of those under 45 years of age are often asked to give advice for others

making technology related purchases. They are also likely to consult more information

sources during this decision window. That means brands need to act faster, and provide

more comprehensive information, if they are to engage this critical demographic of

influence.

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10. Online advocacy – not the whole picture? When it comes to consumers who regularly share

their experiences of products, they are more likely

to post online about their positive experiences

than their negative ones.

40% of respondents said that they share positive

feedback with friends and family, 25% on a social

media site and 24% said they write positive

reviews. Only 33% share negative feedback with

friends, 18% on social and 20% write negative

reviews.

As a result, brands should be wary about judging the impact of their campaigns solely

through digital metrics: assessment should equally take into account the word-of-mouth

feedback which is, in fact, the most common way through which influential consumers share

their expertise. The challenge for brands is how to measure this offline word of mouth; or

interpret the online feedback in a manner which better reflects the overall state of play.

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Conclusion

In this Consumer Electronics Digital Index, we set out to find out how the buyers’ journey has

changed, where influence is sourced when making purchase decisions, what information is

relevant and when brands are best placed to engage with consumers.

Our findings showed that 68% of respondents will purchase following research . This decision

is based on extensive research both offline and online. Those below the age of 24 are

researching more than any other age group and those purchasing Traditional Electronics and

Home Appliances are the only decision makers not predominantly influenced by word-of -

mouth. Instead media plays a key role at awareness and intent and the retail outlet is key at

the action and confidence stages.

Nuances exist across different markets, but overall word-of-mouth, peer recommendations

and customer reviews are the key influences at the awareness and intent stage. The retail

outlet becomes increasingly important during the action and confidence stages. Bricks and

mortar retail is not dead to the consumers that were surveyed. But, the store needs to be

part of a broader strategy where consumers can engage and consume information and make

purchasing decisions in a consistent and connected way.

Brands need to recognise that despite the similarities in where, when, and why consumers

seek out information – particularly in the predominance of word-of-mouth and its digital

equivalents, like forums and reviews – it’s the nuances of behaviour which really impact their

brand-building strategies.

Content should be central to the integrated customer engagement strategy for these brands.

This study reinforces the opportunity for content to drive behaviour before making the

purchase decision; it also demonstrates why brands need to understand how owned, earned

and paid content can (and must) work in harmony. But more critically it illustrates that not all

content is created equal: where and when it’s placed always determines how effectively it

informs and accelerates a decision or supports a branding initiative.

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A Note on Design

The “heroes” which illustrate this report were designed to reflect the 8-bit graphic design style used

predominantly in 1980s and 1990s video games. 8-bit’s resurgence in popular culture has reflected a

growing interest in “retro” electronics products and, like our study, suggests the truth to the adage

that “everything old is new again”.

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APPENDIX: COUNTRY SUMMARIES

China

o More than 90 per cent of Chinese people are looking to purchase Smart Devices or

Wearable Technology within the next 12 months.

o Retail outlets are much less important (30—40%)to Chinese respondents compared

to the rest of APAC (up to 50%): “online general” (e.g. news, lifestyle and price

comparison websites) is the information source the Chinese use most when

researching these product types.

o The “intent” stage, in the majority of cases, is as or more important than the

“awareness” stage whereas for APAC in general, this is the opposite.

India

o In contrast to the regional findings, Indians place less importance on word-of-mouth

when researching Traditional Electronics and Home Appliances (33%). However they

do rely heavily on what may be termed the ‘modern word-of-mouth’ – online sharing

– particularly when researching Smart Devices and Wearable Technology (49%-56%).

o In keeping with the overall APAC findings, broadcast media becomes less important

the further along the decision journey, especially when purchasing Traditional

Electronics and Home Appliances (decrease from 51% to 32%) and Smart Devices and

Wearable Technology (decrease from 59% to 43%).

o When it comes to Smart Devices and Wearable Technology, ‘online sharing’ is the

most important source post the awareness phase at more than 50%. Technical

support information (60%) is sought after at the awareness stage for this sub sector,

along with guarantees and warranties and purchase price.

Australia

o 1 in 5 Australians are not looking to purchase any of these product types within the

next 12 months, which contrasts heavily to other parts of the region.

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o Australians rate visits to retail outlets highly (in the top three sources) throughout

the audience journey and perhaps more so than many other nations in the survey,

especially when considering Gaming, Apps and Software products.

o Within Australian households it is common for the husband/male partner to be

heavily involved in the decision-making process for consumer electronics purchases.

Malaysia

o In general Malaysians use more reasons to justify purchases, particularly in the Smart

Devices/Wearable Technology sub sector.

o Malaysians tend to use online sharing more (up to 70%) for Smart Devices and

Wearable Technology and Gaming, Apps and Software and rely less on the traditional

‘word of mouth’ than other APAC countries, particularly for Traditional Electronics

and Home Appliances (27-42%).

o Malaysians rank visits to retail outlets as the most important source for particular

topics of information (up to 45%), such as accessories, delivery options, guarantees

and warranties, trials, price, running costs and tech support; and are most likely to

view retail outlets as the key source in the action and confidence stages for all three

sub sectors.

Singapore

o Singaporeans are less likely (only 38%) to be looking to purchase Gaming, Apps and

Software in the next 12 months; but of those that are more than one third will make

their decision to purchase within a week of researching.

o For Smart Devices and Wearable Technology manufacturers’ websites rank as

important as (accessories – 28%; guarantees and warranties – 29%; running costs –

22%) or even more important than (compatibility – 26%; product specifications –

30%) visits to retail outlets for particular topics in this sub sector.

o For Traditional Electronics and Home Appliances, visits to retail outlets are by far the

most important information source (52% at awareness and 53% at action).

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Hong Kong

o Over two thirds of respondents are the sole decision maker of tech purchases within

the household.

o The two most frequently used information sources for Hong Kong residents when

researching information topics are “online general” sites, and retail outlets

(predominantly for guarantees and warranties, product trials). The amount people

from Hong Kong use these sources varies with the sub sector. For example these two

sources are used almost equally for Smart Devices and Wearable Technology,

whereas Hong Kong people are more likely to use online general sites when

progressing through the Gaming, Apps and Software journey. For Traditional

Electronics and Home Appliances, visiting retail outlets is the more frequently used

source for information.

o At all points of the decision-making journey and for all product types, purchase price

is the most important topic (and more so in comparison to the total survey sample)

Taiwan

o For 2 in 3 purchases in Smart Devices or Wearable Technology, “Replacing something

that has broken” is the key reason why Taiwanese respondents purchase. For APAC

in general this is far less important.

o Taiwanese respondents use a wide range of information sources when searching for

certain information topics – however, most of these sources are online.

o Almost three quarters of respondents are the sole decision makers when purchasing

technological devices for the household; Taiwan residents are just as likely to

purchase goods second-hand as they are brand new.