China's new generation of youngsters will continue to drive adoption of new technologies and new channels across traditional sectors including banking and payments. Current trends show that this rate of adoption will continue to increase. For banks to stay relevant, they will need to push boundaries to stay ahead of customer adoption, while remaining sensitive to the intricacies of development of their customer needs.
China's miraculous economic catch up since reform and opening up has created an unprecedented generation of consumers. The way this generation has adopted the online world in China is very different from that in the West. This generation has skipped the natural evolution of customer experience, leapfrogging to the latest online world experience -- and can be termed the "Skipped Generation".
Skipping PCs, straight to smart phones
The "Skipped Generation" refers to Iternet users who went from having no direct access to the Internet to active users of the Internet and online services from a smartphone as their channel of choice for surfing the web.
Over the course of the last 10 years, the cost of smartphone technology has decreased exponentially, meaning that by the time of Internet adoption, many users chose to "skip" the PC entirely and opt instead for the handier smartphone.
Data from the CNNIC shows that of China's 564 million Internet users, 420 million are accessing the Internet via smartphones -- up 18.1 percent on the previous year. This is much faster than the overall growth rate of Internet users.
The report also points out that usership on the smartphone is increasing in popularity across all indices -- including Weibo applications, online shopping and mobile banking. The Skipped Generation is largely responsible for these growth figures.
Straight to the online world
Customers in the west may browse products in a retail stores, and then return home to purchase them online -- they are familiar with the brand and merchandise before completing their transaction online, However, in China many Skipped Generation consumers, especially those in tier-3 or growth cities, have never visited the physical retail outlet of the luxury brands which products they browse and purchase online. When items of clothing are delivered to a customer, part of the service includes having the deliverer wait until the customer has tried on the clothing item. This online phenomenon is like bringing the offline world straight to your doorstep. This online-offline integration that we are observing is a unique phenomenon in China.
Here are three areas where the smartphone digital revolution is changing the nature of customers:
China's Skipped Generation consumers have different expectations and requirements of products and services when compared to the generation of consumers that accessed the internet only from their desktops.
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