According to the worldwide retail and eCommerce forecast released by research company eMarketer, China is set to overtake the US to become the world’s largest consumer of goods by the end of the year, with a total retail sales of US$5,074 trillion. That is US$100 billion more than expected for the US market. And one huge portion of the Chinese market will be made up of millennials, standing at roughly 400 million people as of June 2018.
A 2015 Goldman Sachs report about Chinese millennials found that the Chinese millennials are rapidly emerging as China’s prime consumers. Their aggregate income will grow by US$3 trillion during the next decade with their average annual incomes rising steeply over the same period. This is why it is now more important than ever to know the consumer behaviours of Chinese millennials and what channels to best reach them.
Like any other millennials in the world, Chinese millennials are digital natives and tend to be more open to new experiences. But one huge difference that sets them apart from the rest of the world is that Chinese millennials, aged 19 to 35, were all born during the "One-Child Policy" period. From 1979 up until recently, each family in urban China was allowed to have only one child. This meant that they were at the center of their universe as they grew up.
Because of family support and China’s economic reforms, many Chinese millennials have never experienced financial hardships and are naturally optimistic about the future, which is why most of them are non-savers and more willing to spend on themselves. This spells good news for consumer brands, especially those in the luxury market. A report released by the Boston Consulting Group and Tencent in September 2018 observed that Chinese customers are expected to account for 40% of global luxury goods sales by 2024, with those aged 18 to 30 accounting for 58% of luxury goods buyers.
Also, because many Chinese millennials did not have siblings to play with, they turn to social media for socialising and entertainment. As they are digital natives, exploring, purchasing and interacting online are their daily routines. Not only that, but Chinese millennials also have specific interest in foreign brands so by having a presence on Chinese social media, brands would be able to reach out to these millennials more efficiently.
Chinese social media platforms might be a good entry point for brands targetting Chinese millennials. While most popular American social media platforms are banned in China, there are many alternative Chinese platforms with millennials being the bulk of users. For China’s very own “Twitter”, there are microblogging sites like Sina Weibo and Tencent Weibo. Douyin, better known as Tik Tok in the rest of the world, would be a great app to use for video broadcasting.
Branding is particularly important for Chinese millennials because they seek uniqueness and individuality. They enjoy strongly branded products which impart a sense of status and quality. This means that brands have to be authentic, involving the consumer in every step of their brand story.
On top of that, Chinese consumers generally tend to rely a lot on word-of-mouth recommendations. Therefore, it would be efficient for brands to be on forums like Little Red Book (Xiaohongshu in China) and apps like WeChat to reach the Chinese millennials. This is because these platforms allow users to leave and read reviews about various products and brands with their online communities.
Tapping on influencers would also be useful because Chinese consumers, in general, prefer brands that are loved by influencers and celebrities. According to CBNData, the online celebrity economy reached over 58 billion yuan (US$8.4 billion) in 2017, earning even more than the domestic film industry.
One industry that has benefitted largely from influencer marketing is luxury cosmetics. Brands like M.A.C. and Bobbi Brown became well-known in the Chinese market because of their popularity among professional make-up artists and stylists with large online followings.
The culture and attitudes of the Chinese market, along with the growing number of Chinese millennials who are willing and eager to spend will further spur the consumer market in China. Capitalise on this fast-growing industry and target the right consumers today in China!
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