More and more companies are restructuring strategies, developing new products, and launching marketing campaigns because, with the growth of upper-middle-class and affluent segments, the rise of young consumers, and the integration of online and offline businesses, China's consumer market is about to undergo a major transformation. Now, this reshuffling has taken on new trends. Recently, Boston Consulting Group (BCG) and Alibaba jointly released the report "New Consumer Trends in China: Three Driving Forces Shaping New Consumer Segments." They believe that as demographics and society continue to evolve, China has given rise to new segmented consumer groups.
Fashion-Conscious Men and Energetic Silver-Haired Consumers Shopping is generally considered a female label, but according to Alibaba's online data, Chinese male consumers now spend more annually than women, reaching 10,025 yuan. Some urban male consumers born in the 1980s and 1990s frequently read fashion magazines, spend an average of 24 minutes a day on grooming, and frequent gyms and clubs. Some savvy brands have sensed this trend early and are increasing their online visibility.
Besides the "fashionable man economy," the "silver economy" is also thriving.
According to BCG's global aging population research, over the past decade, the income of China's elderly has increased significantly, and their consumption structure has shifted from survival-oriented to culture-and-leisure-oriented. They show a particularly strong preference for travel, hobbies, re-employment/volunteer work, and physical exercise, with percentages 10 to 20 points higher than the older generation. Even "elderly internet celebrities" are emerging—such as Reebok spokesperson "Coolest Grandpa" Wang Deshun, and 72-year-old athlete Shao Quanfa who has completed 70 marathons. Taking the elderly tourism industry as an example, according to the China National Tourism Administration, the elderly tourism market grew at an average annual rate of 21.5% from 2012 to 2015.
Hedonistic Single Nobles China has experienced its largest wave of "singles" in history. The number of people over 35 who remain single has increased more than fourfold compared to a decade ago, reaching 21%.
More and more urban white-collar and gold-collar workers are choosing to become "single nobles." They belong to the upper-middle class, have stable incomes, and are well-educated. Even among married people, long-distance relationships and frequent business trips are becoming more common, creating more space for individual consumption.
This "single female economy" and "one-person economy" have spawned a range of business opportunities, such as single-person KTV, single-seat restaurant tables, small refrigerators, small high-end retail stores offering a variety of imported products, and refined small apartments and personalized living spaces. Whether single by status or by mindset, they advocate convenience, lightweight products, and a consumption style that emphasizes enjoyment and high quality.
Environmental Advocates Who Practice What They Preach The AliResearch Institute's "2016 China Green Consumer Report" shows that Chinese consumers' pursuit of green consumption and environmental protection is not only reflected in a preference for pollution-free or health-beneficial green products, but also extends to a desire for their consumption behavior and lifestyle to meet health and environmental standards. In GFK's consumer survey, as many as 80% of respondents believed that brands and companies must be responsible for the environment.
These "environmentally conscious consumers" have become a rising new segment. Their proportion among Alibaba users jumped from 3.4% in 2011 to 16.2% in 2015, a 14-fold increase in four years, and the price premium for green products has risen by 33%. In 2016, sales of natural skincare brands on Alibaba grew 2.5 times faster than the overall skincare category; imported fresh food sales grew 2.1 times faster than the overall fresh food category; and the number of people purchasing new energy vehicles and related products tripled compared to 2015.
Experience Masters Dedicated to Becoming Experts Chinese consumers now spend more time researching consumption than ever before—whether it's "what to buy, whether to buy, or where to buy," they do thorough homework and are keen to obtain consumption information through online shopping information-sharing platforms. As a result, experiential consumption is becoming a trend.
Compared to conventional entertainment, experience enthusiasts prefer to pursue unconventional activities, such as exotic long-distance travel and extreme sports that provide multiple satisfactions. Many physical businesses impacted by the internet are now carefully designing consumption experiences to find new business opportunities and survival strategies.
Following the United States' football, Japan's anime, and South Korea's online games, Chinese hobbyists are also gradually forming their own industry chain—they are more willing to invest in their hobbies and aspire to achieve something in them, even reaching "master" level. In recent years, professional-grade and even master-grade cameras have been selling well among photography enthusiasts, and fitness and cooking apps have reached 8 to 9 million active users on mobile phones. Consumers in this segment have endless expectations for experiences and skills; they complete purchases and consumption activities while continuously learning, creating, and persisting.
"Social Hermits" Addicted to the Two-Dimensional World China currently has 927 million active mobile internet users, 707 million active WeChat users, 272 million active Alipay payment users, 231 million active Kugou Music users, and 59 million active Didi ride-hailing users. This always-online state, covering everything from socializing and searching to digitalized consumption and payment, has also led to the emergence of a new consumer segment obsessed with two-dimensional (anime, manga, games) and virtual social interactions. For them, the boundary between virtual and real scenes has become blurred.
For example, in the past, World Cup fans had to go to bars or restaurants, order beer, and chat with friends to fully enjoy the experience. But now, more and more people are choosing to move this "beer socializing" scene back home, ordering barbecue and beer online via mobile apps, watching live broadcasts online, and interacting with fans from all over the country via bullet comments or mobile phones. And web novels, games, anime, and comics—once viewed by most adults as "not doing their proper job"—have also spawned a series of new business opportunities and peripheral products.
Chinese consumers' self-identity, values, and living and consumption habits have undergone tremendous changes. Therefore, domestic enterprises and innovative companies will gain more opportunities, while traditional industries and companies face challenges. In response to the complex market trends, BCG suggests that companies in China need to deeply understand these dynamics and changes, and explore more new growth points and potential business opportunities.
1. Identify consumer segments and needs Companies should invest sufficient time and effort to identify relevant segments and understand their needs; they should also consider whether their products and services can meet the different needs of each segment in terms of scenario, function, and performance.
2. Build an efficient brand architecture and strategy Enterprises should seize the pain points of segments, reshape their brand architecture, and efficiently communicate actual benefits, while avoiding overextending their brand lines, which could affect target effectiveness.
3. Enhance consumer interaction and engagement Chinese consumers' emotional attachment to brands is increasing. Therefore, in addition to product functions, companies should actively engage on an emotional level, and the deep emotional connections established with customers can yield significant returns in the future.
4. Create value for consumers Chinese consumers still pay close attention to the actual efficacy of products or services. Therefore, brands in China must justify their price premiums, continuously evaluate price structures and supply chains, and ensure they provide maximum value to customers.
5. Channel design Building comprehensive online-offline integrated channels is the general trend for future business. Companies should gain insight into consumer experiences and needs, build reasonable touchpoints that align with their lifestyles, ensure maximum channel coverage, and form a closed-loop effect.
These five "new new humans" are just current trends. In the future, China's overall consumer market will continue to grow, potentially producing more and richer segments. However, if companies fail to capture these high-consumption-potential income groups, choose low-potential product categories, or fail to develop effective omnichannel strategies, they will inevitably face slowing growth.
Conversely, if Chinese companies and foreign enterprises in China can adapt to changes and implement correct strategies, they can achieve sustained growth and profitability in China, one of the world's most dynamic economies.
Source: Jiemian News -END-