Following three years of pandemic upheavals in China, brands and retailers have been forced to ditch old rules and embrace the new norms in an uncertain economic environment. Thus, it’s unsurprising that we’ve seen a number of new consumer trends begin to arise during 2023.
As we enter the post-pandemic period, we’ve identified the top three emerging consumer trends in China.
1. A rise in rational consumption
The pandemic and the following economic downturn have changed Chinese consumers’ attitudes towards shopping. For example, consumers have become more pragmatic and less inclined to participate in impulse buying. Plus, product quality and functionality has risen in priority when making purchase decisions. According to the Deloitte China Consumer Survey, 41% of respondents cited "I only buy what I really need" as one of the top three consumer mindsets.
Price-sensitivity is also higher than ever before, with consumers investing time in careful research and price comparison before purchasing a product to get the best deals. 36% of respondents said they enjoy “looking for brands and products with the best cost-effectiveness”, and around 60% would proactively search for discounts or promotional coupons before shopping.
With only 14% of respondents buying things for “aesthetically pleasing” reasons, the data firmly shows that rationality and pragmaticism are becoming the dominant consumer mindset in China.
The recent 618 Shopping Festival - the first major shopping event after the pandemic in China - tapped into this trend. This year, Chinese e-commerce platforms from JD.com to Tmall and Pinduoduo, all pivoted to attract consumers with deep discounts and monetary subsidies, with luxury brands who usually avoid markdown sales joining in. For example, Apple hosted its first-ever livestream shopping event campaign, offering large temporary discounts on its products.
Under such a volatile economic climate and subdued consumer sentiment, Chinese consumers try to maintain their quality of life through savvy research and smarter choices. Brands and retailers should definitely adapt to this mindset and consider how to provide products and promotional offerings that can better capture these increasingly practical requirements.
2. Omnichannel is redefining the purchase journey
China has always pioneered the adoption of e-commerce, and is also among the first markets to witness the rise of social commerce and livestreaming shopping. The pandemic restrictions and lockdown only accelerated this omnichannel shopping trend in major categories, and shows no signs of slowing down.
The linear model of the customer journey, from awareness to purchase, is gone forever. Shopping is not a discrete activity anymore. Instead, it can happen whenever and wherever - either by scrolling through social media platforms or watching streamed videos.
Deloitte research indicates that 67% of Chinese consumers have partaken in livestream shopping, and nearly 70% of consumers experience community instant retailing at least once a month. These new forms of retail gained serious traction during the pandemic period and are definitely here to stay. As a result, the right audience, right messages and right places become a moving target for digital marketers.
The fragmented touchpoints require brands to build a prominent presence where the target customers are really active in discovering, researching and sharing, rather than blanket bombarding the mainstream channels or focusing on only one single channel.
More importantly, it is essential to provide a consistent shopping experience throughout consumers’ multichannel nonlinear path to purchase. Even during a mega sale event, customers hold the same high expectation for both products and services, unwilling to sacrifice anything over discount promotions.
3. Gen Z has emerged as the new shopping powerhouse
Gen Z, the group of people born between 1995 to 2010, nearly reached 340M in 2022, making up about 24% of China's population. They’re also the first digitally native generation and heavy internet users. According to QuestMobile research, Gen Zs on average spend 7.2 hours online per day, compared to 6.7 hours per day of overall users, so it’s no surprise they favour online shopping over their predecessors.
The spending power of Gen Zers is also picking up steam. They were estimated to contribute nearly five trillion yuan in consumption in 2021, over 11% of total consumption in China. Many brands are already aware of the importance of Gen Z and have adjusted marketing strategies to cater to their media preference and shopping habits. For example, Chinese Gen Zers are one of the early adopters and significant users of live commerce compared to other generations, and their most accepted online advertising format is short video ads. They’re also the earliest people to migrate from traditional social platforms to new places such as Douyin and Xiaohongshu (Little Red Book), which led to the growing social commerce trend in China.
Gen Z is also more aware of sustainability than older generations. According to VogueBusiness research in China, 54% of Gen Z believe they have a clear and accurate understanding of ‘sustainability’. Further, 39% of survey respondents are willing to pay under 10% premium for sustainable products, while 28% are willing to pay 10%-25% premium.
Even though Gen Z favours brands holding up sustainable ideas and missions, there are limits to the prices they’re willing to pay if they get too high. If you want to attract more Gen Z consumers, the above mentioned trends are unmissable.
There are many other important local sales and cultural moments for brands to engage with local consumers. Download the 2023 Chinese Marketing Calendar to find out more!
If you have any questions on the consumer trends mentioned above, please don’t hesitate to contact us.
