A Snapshot of Consumer Trends in China Consumer Goods And What It Means For Your Business In China
A SNAPSHOT OF CONSUMER TRENDS IN CHINA CONSUMER GOODS AND WHAT IT MEANS FOR YOUR BUSINESS IN CHINA
Jan Van Loon & Susan Yang at White Caviar
In a market where consumers continue to look forward to something new, it is imperative for consumer goods companies to evolve in order to address the fast and everchanging needs of the Chinese consumers and avoid falling behind or becoming ‘old-fashioned’.
In this article we will be looking at what we consider as 4 of the main trends shaping the consumer goods industry. We will do this by looking at some of the dynamics at play in 4 industry sectors, i.e., snacks & chocolates, apparel & accessories, alcohol & spirits, and automotive & mobility.
The 4 main trends we observe are,
‘Guochao’ or the conscious preference for domestic brands. This trend has seen an acceleration in 2020 and continues to influence choices in more and more categories.
Appraisal of the unique style needs, sense of creativity. Chinese people are now more confident to express their own style. It is no longer simply taking something of quality, rather looking for something that can express who I am.
The increasing awareness and expression of a more active and progressive lifestyle. The importance of health and healthy living.
Continued disruptive and out-of-the-box thinking as a force for local product, brand or marketing innovation. It takes Chinese brands and companies from being the ‘follower’ to being a ‘challenger’ if not ‘leader’, something that puts many Western brands in a discomfortable position or at a disadvantage.
Note that these 4 trends do not present a complete overview of what is happening within these categories or the China market. Our examples will give you a good sense of these critical dynamics at play as we take a closer look at what we see in the core categories, and how these trends drive change in some consumer goods sectors.
WHAT DO WE SEE IN THE SNACKS & CHOCOLATE CATEGORY?
A sense of ‘Creative Curiosity’. Chinese like food and diversity of tastes, shapes, colors and forms has become very noticeable. Chicecream’s use of cultural elements in its designs of ice-cream, Grey coconut ice-cream breaking the color conventions, and Muji bringing contrasting sensations in e.g. its chocolate coated dried strawberries are just a few examples of how innovative thinking drives product development.
A rise in ‘Healthy and Single person consumption offerings’. We see this through smaller, daily-dose packaging types that provide you the nutrients you need during the day, as well as a continuation of a healthier trend that started earlier though now giving more emphasis to the healthy and natural ingredients (e.g. fruit or vegetable) which at the same time become a stronger part of the on-pack communication.
A new code of ‘Animated Premium’. A change that is especially noticeable in the premiumization of local brands and snack products. High quality local illustrative elements decorate more and more local brands and products, tapping into the ‘ke ai’ culture in China and changing the impact and noticeability on shelf while modernizing the brand’s image at the same time.
WHAT DYNAMICS ARE INFLUENCING APPAREL & ACCESSORIES?
Integration and adaptation of local style and cultural elements. China is emerging on the global fashion scene, especially when it comes down to displaying its unique designs. While it is experimental, it has adapted its own style, a challenge for foreign brands who want to survive in the market. No matter how expensive the item, Chinese consumers look for style and story in the designs they select. Local designers are leveraging new design elements from past culture in their upcoming collections (more so than we see from international brands tied to their local history/culture). This is giving them a modern but culturally authentic feel and plays into the appraisal of the unique needs of the Chinese consumer.
Local confidence vs international label only. The ‘Guochao’ trend. With exception of the high-end fashion brands, we see greater acceptance and wearability of local or nonmainstream designer brands among China’s youth who started to appreciate local brands like Li-Ning, Anta or other Chinese designer brands as powerful alternatives given the style and design changes these brands have undertaken.
Collabs. Meaningful collaborations still attract and increase the value through their uniqueness and exclusive series giving a new meaning to brands they are familiar with. These collaborations increasingly become a mix and cross over between categories to tap into the more progressive lifestyle from many young Chinese.
A CHANGED DYNAMIC IN ALCOHOL & SPIRITS?
Less, lighter and conscious drinking. A combination of both the pandemic (during which many frequented locations were closed for extended times) and more active lifestyle makes that the younger generation starts to look at quality and category more than volume, often reducing their portfolio of alcoholic beverages to those they like most. This trend will make it more important for brands to leverage the right assets to stay connected to the future generation of spirit consumers.
Experimentation with Baijiu. More establishments are popping up experimenting with unique cocktails or food pairings to embrace Baijiu’s unique flavor profile and introduce a (re)discovery of this category of spirits.
WHAT IS STEERING THE FUTURE OF AUTOMOTIVE & MOBILITY?
Balancing status vs. digital & green practicality. We observe a greater differentiation starts to emerge between the role and image of international car brands who up and till today still saturate the needs of the image seeking car buyer in China. Brands like BMW, Benz and others are still performing strong in the market, but more and more Chinese start-ups are emerging in the EV segment. They create an attractive, practical, and alternative mobility solution for many first-time car buyers and those who seek a solution for their mini daily needs. Like Tesla, these local EV brands may become a greater disruptive force in the market that not just address the need for greener mobility solutions but offer smarter and more integrated solutions that fit the sometimes more rational usage of going from A to B. Chinese brands start so to say with a clean slate and can design a digitalized but stylish car unit that updates some of the features we are used to seeing in conventional car configurations.
Lifestyle and progressive. On a marketing level, Chinese car brands are looking at values that enforce a smart, conscious and progressive lifestyle, competing less on the driving experience but more on the attitudes and the aspirations of the car buyers. (smart, ingenious, effortless, fun, progressive, sophisticated, humane …). They are not hindered by a strong affinity for combustion engines and offer an alternative that goes beyond the legacy carmaker brands by taking advantage of the eco transition taking place. They may be less sophisticated but more digitally friendly, less mechanic and more ‘power-on’. Despite the boom of shared cars economy and alternative mobility solutions that present itself, cars remain relevant in the market but must address the needs to be progressive, smarter and greener.
WHAT CONSIDERATIONS AND ACTIONS YOU CAN TAKE TO STAY RELEVANT TO THE FUTURE CHINESE CONSUMER?
Apply a greater sensitivity to the different market dynamics and needs of the Chinese consumer. China is one of the few markets in growth modus today and many brands especially in the snack and apparel sectors keep a more Westernized view on product portfolio that risks making them second choice to their local counterparts.
Embrace innovative thinking. This is giving Chinese brands an advantage and has brought them to the position of ‘challenger’ and ‘leader’ rather than ‘follower’ brands, making many foreign brands insecure or inefficient in the marketing spend or budget priorities. Thinking around innovation must be adjusted and more approached with an open, sometimes bolder mindset.
Truly tap into the cultural understanding of what progression means for the Chinese consumer and what it means for you in terms of product features or experiences in the category. More than often do we see Western brands fail in adequately localizing their design, product or positioning.
For more information on China category trends or what it means for your brand and product offering, contact the authors at firstname.lastname@example.org or email@example.com