China streets ahead in the shared-mobility market, global report shows

27 February 2018

China leads the way in almost every category of the current and future shared mobility market according to a global survey from consulting firm AlixPartners, from car-sharing and ride-hailing to the country’s readiness to support the looming advent of robo-taxis.

As the rise of shared mobility transport services continues to shake the automotive, taxi, and mass transit industries around the world, international consulting firm AlixPartners has conducted a survey with 5,000 urban global consumers to assess the sector’s current state and mid-to-long-term outlook, covering the seven key markets of Germany, France, Italy, China, Japan, the UK and US.

The results show that China is streets ahead in almost every facet of the burgeoning segment, as to the awareness and current and intended use of car-sharing (the short-term self-service rental of vehicles offered by companies such as car2go and Zipcar) and ride-hailing – the model of private transportation services supported by shared-economy giants Uber and Didi, the latter of which serves more than 400 million users in the country for an approximately 75% market share.Mobility sharing usage across key marketsOver the three months prior to the survey, 61% of survey respondents in China had used a ride-hailing service at least once. This number nearly doubled that of the next closest markets in the US (36%) and France (34%), and far outstripped Germany (13%) and regional neighbours Japan, with just 8% of Japanese respondents having used a ride-hailing service over the period.

Germany and Japan performed a fraction stronger when it came to car-sharing, with the report citing heavy regulation of ride-hailing in both nations as a factor in its poor rates of adoption. However, while 16% and 15% of respondents in Germany and Japan had used a car-sharing service over the prior three months, China still shaded both nations with a 29% rate – to again lead every region, including the next closest of Italy (22%) and the bottomed-out market of the US (6%).Net expected change in ride hailing and car sharing usageMoreover, China’s market dominance looks set to only grow stronger. When current users were quizzed on their usage expectations of the car-sharing and ride-hailing mobility platforms for the coming twelve months, be it less or more, the survey participants of China indicated a net 44% gain in intended car-sharing usage, the largest gain across all nations, and a net 40% increase in ride-hailing – just a fraction behind Japan on 44%, where far fewer numbers use either service.

China’s continued intended uptake in both platforms dwarfed responses in most Western nations, and especially in the US and UK, with just a 3% net gain in car-sharing intentions recorded in the US – following its total usage numbers having already dropped from 15% in 2013 to 6% less than five years on – and an actual net loss of -3% in car-sharing intentions signaled in the UK, with the British nation’s ride-hailing prospects not faring much better at only plus 3%.Awareness of car and ride sharing across key marketsAltogether, the lower figures for car-sharing reflect a widespread market sentiment, with 41% of all respondents stating a preference for ride-hailing between the two models, and with just the 14% in favour of car-sharing. Of the nations surveyed, Germany is the single exception as to projected comparative growth between platforms, where car-sharing usage is expected to outpace that of ride-hailing. 

This is given as a reflection of Germany’s stringent regulation of ride-hailing, but can also be seen in awareness levels as to each platform in the countries surveyed, with 95% of Germans clued in on car-sharing compared to just 74% as to ride-hailing – the second lowest figure for either platform next to the Japanese awareness of ride-hailing at 63%. In contrast, effectively 100% of respondents in China were familiar with ride-hailing, with a further 91% abreast of the car-sharing option.Willingness to use robotaxis among all consumers

Impacts and future trends

As for the longer-term future, China again stands well above the crowd when it comes to an expressed willingness to adopt robo-taxis as a means of transport, returning a 62% positive response-rate. The report contends that the potential penetration of robo-taxis will likely be dependent on prevailing cultures, with long-time auto-loving respondents in the US far less prepared to try robo-taxis at just 29%.

The figures supplied by the consulting firm, however, suggest that shared-mobility is already causing a major dent in mature auto markets, with 55% of ride-hailing and 57% of car-sharing users across the UK, Germany, Italy and France stating that the services have enabled them to delay the purchase of a vehicle or avoid one altogether. Further analysis by the firm of the US landscape notes that every car-sharing vehicle in the pool replaces 19 on the road, while each available ride-hailing car reduces the total number by four.

Andrew Bergbaum, Managing Director at AlixPartners, concluded; “With 41% of respondents preferring ride hailing, compared to just 14% for car sharing it is clear the concept of shared mobility is here to stay and is already transforming how urban residents move around their cities. We expect that it will continue to have a growing impact on consumers’ car buying decisions, especially when driverless taxis become common.”

The findings from the report match a previous analysis by consulting firm Arthur D. Little, which predicted a large momentum in growth for the car-sharing market in China. Despite this, the personal car market is also growing rapidly in the country according to a recent report from strategy giants McKinsey & Company, with premium models increasingly in demand. 

OC&C survey of 15,000 consumers uncovers distinct Gen Z characteristic

30 January 2019

An emerging borderless tribe; that’s how OC&C Strategy Consultants has characterised Generation Z following a comprehensive study of the globe’s youngest generation.

As the older members of Generation Z reach maturity, born from the mid-to-late-nineties and on, the international strategy and management firm OC&C Strategy Consultants has undertaken an in-depth study of the world’s generational habits and perspectives, describing those of Gen Z as belonging to an emerging borderless tribe – hungry for uniqueness but with the most globally consistent attitudes and behaviours.  

In an effort to gain a clearer understanding and insight for business and retailers into the youngest generation, OC&C altogether surveyed more than 15,000 respondents across four generations (Baby Boomers, Gen X, the Millennials and Gen Z) residing in nine countries, including 2,000 citizens in China, with Gen Z’s accounting for approximately one fifth of the Chinese population and 30 percent of world’s overall total.Chinese Gen Z ratio of household spend compared to globe

The findings of the survey demonstrate that while Gen Z is similar to its Millennial predecessor in certain respects, such as featuring experience-led and socially conscious consumers, the younger cohort has developed some distinct traits which set them apart – fittingly, one example being the desire as individuals to stand-apart. The other defined markers however may strike as an immediate contradiction; Gen Z is the most likely to be influenced by peers, and as a group is the most closely aligned in behavior and perspective at a global level.

The ready explanation to this apparent contradiction is of course social media. As stated by the report, whereas Generation X, the Millennials and Gen Z – the latter soon to account for one third of all consumers worldwide – may all shop online and are all influenced by social media, Gen Z’s list of influence extends further on digital media channels; “Brands’, friends’ and celebrities’ social media and blogs have bigger influences for Gen Z than for older generations.”

“China’s Generation Z are the first Chinese generation to be born in a fully digital age,” said Adam Xu, who was recently made Partner with OC&C. “They are an extremely tech-savvy crowd, willing to share their feelings and experiences in forms of online reviews, blog posts and other means of self-expression. Chinese Gen Z are more likely to make their social media public compared to their Western counterparts who prefer to limit their social media audience to people they know in real life. This suggests that information sharing extends even further beyond their immediate circles for Chinese Generation Z, a trend that presents immense marketing potential if leveraged appropriately.”

One area where this is apparent is in terms of brand discovery channels, with Gen Z’s citing a friend’s influence in 21 percent of recent occasions where they’d been introduced and subsequently purchased an item from a fresh brand, compared to 14 percent of Baby Boomers and Gen X’s and 17 percent of Millennials. The influence of social media and the internet can also be evidently credited for Gen Z’s sharing the greatest cross-border similarities in behaviours and attitudes compared to other generations.Social responsibility priorities for Gen Z As to those shared behaviours and opinions, Gen Z is distinctly socially-minded, or its members at least state a variety of social concerns as having a greater level of priority than their generational peers – building on the Millennial mind-set. Issues such as human rights, diversity, and building local communities all attract concern at far higher levels than the generational average, while for the Gen Z’s of China, environmental-friendly consumption features prominently – at 25 percent compared to the 13 percent global Gen Z average.

While those of Gen Z expect brands to adhere to high ethical standards, and are for example more willing to take extra steps to research a brand’s supply-chain and employment practices before making a purchase, the stated environmental concerns of the newest generation don’t necessarily translate however to broader purchasing activity, with its shoppers favouring passing trends and showing the lowest tendency to preference products that can be used repeatedly. This would suggest opportunities for brands which can meet both the Gen Z need for individual style while leading on social and ethical issues.

And for those same brands, retailers and manufacturer looking to the Gen Z market, it may be worth noting than the Chinese segment of young consumers – most still just teenagers or even younger – account for a massive 13 percent of direct or influenced total household spending in the country – 10 percent of that from their very own pockets – against comparative overall figures of just 3 percent in the US and UK. “These statistics are enough to urge brands to rethink their business strategy if they want to capitalise on China’s booming market,” concludes OC&C Strategy associate partner Veronica Wang.