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    3 Keys to Understanding Chinese Consumers

    By The Staff - Mar 2, 2021
    3 Keys to Understanding Chinese Consumers

    Image: Charles Deluvio via Unsplash

    Along with meteoric economic growth, China’s young generation has started to join the main consumer force. Adapting your marketing strategy is crucial for brands and it’s interesting to see how marketers are switching the attention from the older generation, “the post-’80s generation”, to “the post-’90s generation”, especially “Gen-Z” (born in 1995 – 2000).

    The generations and demographics in China

    China experienced tremendous changes in 40 years mostly thanks to its Reform and Opening policy since 1978. From 1966 – 2016, Chinese people went through the Cultural Revolution, the Reform and Opening, and the One-Child policy. Being affected by different policies, Chinese consumers can be divided by generation and psychographic.

    The post-’80s generation has a stronger buying power in terms of their income level. Meanwhile, those who born in a one-child family usually will buy more as they have four parents and two families to take care of. Even though they don’t want to spend too much on necessities, housewares, and healthcare, it has been their responsibility to look after them for the basics. Saying that they are the main consuming force of China wouldn’t be exaggerating. In short, they buy what they need.

     
     

    The oldest ’90s generation is going to celebrate their 31st birthday. Dating back to 30 years, the majority of Chinese were still at poverty. The grown-up ’90s generation is entering into a “different” world in regard to career development and marriage. In the meantime, they were the first new generation of China whoever had a chance to get involved with a computer, the Internet, E-commerce, Social & Messaging, at a relatively younger age. Generally speaking, they consume when they feel it’s right and for socializing.

    Being raised and educated in such a totally different environment, Gen-Z is very close to “Digital Native”, and eager to socialize online, voice out in their own communities with their attitudes, interests, and hobbies. Most importantly, they are willing to spend on what makes them feel unique rather than what they really need most of the time.

    The highly connected consumers

    Since China joined the WTO (World Trade Organization) in 2001, it became more open-up to the world. 10 years later, despite the fact that China was struggling of the application of the 3G due to limited technology and resources, China walked into the fastest-growing countries with the massive deployment of 4G from 2014 to 2019. The “Sleeping Dragon” has awakened along with its Belt and Road Initiative and the successful applications of 4G.

     
     

    “The year 2019 will witness a digital revolution whereby technology unleashes the power of ecommerce to benefit the livelihood of China’s rural population. China’s agricultural industry is still waiting to be tapped by e-commerce.” said Dada, Co-founder of Pinduoduo in the China Internet Report 2019.

    Despite a big part of traditional consumers in China, the young generation, especially the Gen-Z as mentioned above, embraces new technology, such as Mobile Commerce, Social Media, Live Stream, Mini Program, Mini Game. In recent years, the mainstream online channels Weixin, Weibo, Douyin, as well as Taobao, Tmall, and JD.com, play a significant role to meet Chinese consumers’ high demands from Fresh Food to Necessities, nearly everything and every service that the market needs. Other platforms, namely Xiaohongshu, Kaishou, Douban, Bilibili, that focus on “niche” markets also share a big portion of the “pie.”

    Before entering the biggest and fast-growing economy in the world, Market Segmenting, Market Targeting, Market Positioning would be the first homework all foreign brands should do to pick the right platforms to engage with the targeted audiences with the least costs. Indeed, understanding Chinese consumers is the first step to succeed in China.

    The Fast-changing habits and the need for recognition

    China is ready to jump into a new era, 5G+, thanks to its vast investments in ICT (Information and Communication Technology), accompanied by Big Data, AI (Artificial Intelligence), 5G, and IoT. Although business models, like E-commerce and Sharing Economy, are not new to Chinese consumers, there will be a brand-new dimension of economic booming as a result of the development and applications of ICT and 5G.

    China surprised the world with its remarkable economic progress within 40 years, which brought the whole country to a new horizon. Apart from this, there’s no doubt that China takes the lead of 5G applications covering various industries and services, such as E-commerce, Social & Messaging, Sharing Economy, Robotics, Wearables, Smart Appliance, Health Cares, Smart Cities, Smartphones, Smart Devices, Autonomous Cars, Blockchain, and Gaming.

    For instance:

    • 2/3 of the world’s 5G infrastructure towers are located in China.
    • Chinese Tech companies now have started to produce 1000 RMB’s 5G Smartphone, which is helping the whole global 5G ecosystem, not only in China.
    • Currently, 60% of the Smartphone sold in China is 5G enabled.

    These facts reflect the country’s beliefs in the value of 5G and the operators’ strategic vision and its people’s eagerness to be digital in all aspects of life.

    However, China is under pressure by its environmental degradation and aware of climate change and the emergency of sustainability, with respect to the 17 United Nations SDGs (Sustainable Development Goals).

    China is in the transition toward a sustainable path. More and more young consumers started to have their beliefs and their point of view towards their surroundings.

    Meanwhile, the unforeseen COVID-19 maximized its online shopping and service nationwide during the outbreak, including Social Content, E-commerce, Fresh Food and Cooked Food deliveries. It’s obvious to see that Online Business continues to grow in a new dimension along with the applications of 5G.

     

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