The Chinese consumer
From production to innovation
The Chinese consumer is evolving. They are seeking a more balanced life where health, family, and experiences are a priority. Chinese consumers are becoming more selective about where they spend their money, shifting from products to services and from mass to premium segments.
While income is expected to rise across China, some cities and regions are already significantly wealthier than others. China is big and its regions are so diverse they should almost be treated as separate countries. Global culture is spreading through social media and a lot of developments you see in China are part of this global movement. Yet, they are similar but different. Because Chinese consumers are fast to adopt new technologies and are drawn to the new and different and have money to spend, the most interesting changes and ideas will be coming from China in the next few years. China will lead the way, new retail concepts, e-commerce, tech services, automatisation and the implementation of AI.
The “young generation” people born in the 1980s, 1990s, and the first decade of this century spend more then their elders. They are loyal towards brands and are highly influenced by social media. The share of total consumption by the young generation is projected to increase from 45% to 53% by 2020.
Highly personalized online shopping experience helps consumers discover new products and make lifestyle choices based on social interaction and location data. Everything consumers see on their screen is shopable and updated in real time. The path from discovery to purchase is seamless and easy. Discovery driven consumer journeys are more likely to deepen consumer engagement. Chinese consumers are increasingly open to local brands. Chinese brands are finding their own handwriting in design with a beautiful mix of Chinese heritage and global culture.
Healthy living is on the rise. The Chinese consumer has become more health conscious and more focused on value. People are not just working all the time. They’re actually starting to enjoy themselves and also care more about what they eat and how they take care of themselves. The number of Chinese running and doing exercise is higher than in the US. You see a shift from products to services and experiences that enhance a personal sense of well-being such as healthy foods, education, and travel. The market for health & wellness will reach nearly 70 billion USD by 2020. This is a result of both rising incomes and increasing awareness about healthy lifestyles among a growing middle and upper class. According to a 2014 BCG servey the country is already the world’s most health conscious.
Most Chinese consumers consider food globalization a good thing, they buy imported foods because these products are not available in China or because of food safety issues. Dairy products & children’s foods most imported. Consumers are interested in clean eating and this is also reflected in the increased popularity of organic produce, locally grown vegetables, and farmers markets, as well as the growing number of healthy food concepts like Tribe, Glo Kitchen, Obentos and Soul Bowls. Young people are used to ordering food on-line and rarely cook themselves. Food start-ups that run innovative delivery services are on the rise. Food is increasingly seen as self-expression, that fits to your lifestyle and what you can share online.
China’s personal and environmental health can have a significant impact on the rest of the world. China is the world’s largest carbon dioxide emitter and urban air pollution is a severe health issue. There are also significant water pollution problems with many of the rivers affected by industrial and agricultural waste. But times are changing, China is one of the world's leading investors in renewable energy, most notably hydroelectric power plants.
Chinese consumers want to see the world, and enjoy life with a focus on new and unique experiences. They love heritage, buying a piece of history, visiting countries all over the world. They love to experience luxury, not just buying the products but the whole experience. Technology is not seen as a luxury product, luxury is timeless and technology is not. People do enjoy the blending of technology and luxury.
change through Innovation
China is moving from production to innovation. Dream Town near Hangzhou, is nurturing 710 start-ups supported by the government. Also in China you see the rise of start-ups, collectives, other ways of working together and co-working spaces. The next generation is encouraged to be entrepeneurel, creating the ideas, technologies and jobs to feed the country’s future growth.
Seek something special, prioritizing premium products. something that sets them apart from the others. Logo’s are less important.
Quality of life
Balance and small pleasures instead of status and wealth. Living a more balanced, healthy, and family-centric life.
More open-minded and individualistic than older generations. Taking care/treating yourself. Social approval , the self via social media.
Chinese consumers are expected to continue to spend despite the slowing down of the macroeconomy. Individualism of the Chinese consumer will develop a new kind of energy that drives innovation and personal development. This will trigger global brands to be innovative and aware of the cultural needs of the Chinese consumers. Local Chinese brands will grow and develop an own unique design language that will be inflencing global trends.