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New Urban Chinese Consumers 2017 Full Report

Sandy Chen

Senior Research Director, Kantar TNS

Shoppers 19.01.2017 / 11:30

Kantar TNS consumer trends 2 col

Based on our experience interacting with consumers and clients, these are 10 consumer trends in urban China.

Despite gloomy economic outlook, evidence has shown that Chinese consumer confidence remains resilient. However, how consumers spend and why they are spending has undergone significant changes in recent years. Distilled from our extensive experience interacting with consumers from all over China and clients with a variety of background, Kantar TNS presents you 10 prevailing consumer trends in urban China*.

Self-awareness Rising

The Chinese consumers are now more confident individuals – the sense of “self” is awakening as a result of western influence, modern lifestyle and material abundance. This shift in value and psychology has fuelled several consumer trends:

1. Something for “me”

As the basic needs are met and market offers flourish, big/well known/household brand is no longer enough. The new consumer is not going to settle with something every “common people” use, but something unique to set her/him apart from others. The first beneficiary of this consumer needs are premium and luxury brands, as price naturally gives these brands a sense of superiority. Recently, niche brands are gaining momentum. These small brands often come with innovative products addressing specific consumer needs to near perfection. More importantly, its niche identity helps the one who chooses it stand out.

How can brands leverage this trend?

* Huge opportunities for emerging brands in traditionally household brands dominated markets, such as personal care and home care.

新兴小众品牌

* DIY, limited editions for big brands to constantly reinvent itself.

大牌定制版

* Increasingly imperative for brands to have a point of view or personality to engage consumers.

品牌必须有个性

2. Small contentment

“How I feel is more important than what other people want me to be.”

Self-defined happiness takes over the traditional definition of success (i.e., wealth and status). As living standard reaches a certain comfort level, many people choose a relaxed and more balanced life over strenuous ladder climbing. This affects how people choose their career, how and with whom they spend their time. Some start to migrate back to lower tier cities. Freelancing, Bed & Breakfast, internet based small businesses are new career choices that allow people to have more control over their lives. More time is spent with family and loved ones as happiness and well-being gain more weight over pure financial success. Leisure hobbies are developed as there are more out side of work free time.

How can brands leverage this trend?

* Brand communications speaking of a variety of happy lives, e.g., content at the present, self sustain vs. luxurious, life vs. work.

小确幸

* Leverage leisure occasions for consumer engagement, e.g., concert, art fair, weekend outing.

休闲场合互动

3. Self pampering

Modern lifestyle and western value is affecting how Chinese consumers see her/himself in relation to her/his family and the social world. The traditional value of conformity and “small me” is now challenged by the increased sense of “self”. “Although my family and social obligations are important, my own needs should also be taken care of.” If only you are good to yourself, you know how to appreciate life.

How can brands leverage this trend?

* Product innovations targeting “take a break” occasions.

小饿小困来一杯

* Opportunities in products/services focusing on improving self/quality of life (e.g., spa, sports membership card, and hiring of personal trainer).

SPA需求

* Tapping into self-reward/pampering in brand communications – the best ingredient/quality should be used when it comes to things for yourself and family.

给自己最好的

4. Show time

The sense of “self” is manifested by Chinese consumers’ strong desire to be visible on social media. It’s a show time for everybody - not only 90s/95s are posting, so are grandpas and grandmas. Various social media provides just the platform for Chinese consumers to show their good way of life, their taste, their point of view. However, behind the obvious motive to show difference, also lies the desire for social approval: I post because everyone else is doing so. Thus “harmonized difference” is uniquely important to Chinese consumers on social media.

How can brands leverage this trend?

* Use design - brands with unique and stylish design are more likely to be shared on social media. It speaks about the taste of the one who posts it.

秀秀眷村

* Humour and attitude travels on social media.

幽默负能量

* Popular public activities provides a good platform for consumer engagement.

热门公共活动

Lifestyle Evolution

Consumer lifestyle evolves as living standard continues to improve and technologies further enwoven into people’s lives.

5. Health+

A new level of consciousness on health and well being unfolds:

* “Eat well” no longer means excessive intake of meat/nutrition, it’s about healthy and scientific diet

* Higher standard on quality and variety of food - organic food, imported food, fine dining

* Health comes not only from food, it’s about healthy lifestyle/habits - participation in sports, hiring a personal trainer to provide more professional guidance, using sports related APP and wearables

* From physical health to holistic view of body, mind, and soul - higher awareness of depression and various psychological/mental problems, practice of meditation, yoga and pursuit of religion

* From food safety to general awareness of overall living space - air, water and soil

How can brands leverage these trends?

* Upgrade accordingly to the new definition of health on food/lifestyle in product innovation and communication.

管理你的身体

* Brands/products shall facilitate and enable an easier pursuit of health by consumers.

有效吸尘

6. Buy time

Time scarceness has always been a pain point for today’s consumers who are often torn between family, work and many fun activities in the modern life. Consumers are now willing to buy time to free themselves from the boring and repetitive chores for hobbies/favourite activities. And this is made possible by modern technologies - trips to physical stores are saved by home delivery service, private chef comes to your home if you don’t want the hassle of eating out, taxi ordered at home and comes to your door steps, smart phones take the role of personal assistant to make your life more efficient. Convenience has been taken for granted as consumers are indulged by a variety of innovative offers that deliver convenience beyond expectation.

How can brands leverage this new trend?

* Convenience is a must-have in today’s product/service offerings.

送饭上门

* Innovation opportunities in further identifying areas that would bring more convenience to consumers, e.g., integrating various aspects of consumer lives into one single platform/product.

整合各功能

7. Omnipresent shoppers

Chinese consumers are now global shoppers – as income rises, oversea travel becomes a popular and sometimes must do annual event for an average Chinese urban household. Strong RMB in the past a few years further drove up the value of goods in foreign countries. Shopping, over time becomes the main driver of overseas trips.

On top of luxury goods (which enjoy the most appreciable price gap), a range of products from consumer electronics to household goods are also among Chinese travellers’ shopping list. Beside price advantage, foreign goods are believed to have better quality (safer ingredient when it comes to food) and more up-to-date selection. Global shopping is now no longer limited to travel occasions – various cross border ecommerce offers (e.g., global shopping sites by local and international ecommerce giants, global shopping agents, international shipping by foreign retailers) make sure that Chinese consumers can shop anywhere whenever they want.

Ecommerce has undergone explosive growth in the past 5 years – lured by cheaper price, ease of shopping, and limitless of offerings, consumers quickly changed their shopping habits and shifted many of their purchase online without much effort. The impact to offline retail is bigger in China than other countries because of the cheap delivery cost in China.

How can brands leverage this new trend?

* For brands that operate in multiple markets, China is worthy enough for early launch of latest offerings. Products specially designed for Chinese consumers is a demonstration of the brand’s respect of the uniqueness of Chinese consumers.

镂空剪纸兰蔻礼盒 

Lancome Genifique gift pack by French designer inspired by Chinese element.

* Leverage O2O – the border between online and offline is blurred. Brands need to think holistically to grab any opportunities possible. Offline operation shall fully leverage its advantage in delivering experience and service, in the meantime to leverage online channel for maximum reach and consumer engagement. 

优衣库线上线下促销 

11/11 Uniqlo on sale offline and online simultaneously.

Shift in Demographical Structure

Moreover, the shift in demographical structure has pushed new generations of consumers into the market place, with characteristics uniquely defined by this age of time.

8. A different kind of youth

The uniqueness of this generation of youth (90s/00s) is reflected by the following characteristics:

First, diversified view of life and desire to pursuit bolder dream. As the only child in the family, 90s/00s enjoyed material comfort and sole parental and grandparental attention. Their parents are better equipped financially than the previous generations to extend their financial support to the children even after their time of self-establishment. This gives them greater sense of security to explore different paths of life and pursuit bolder dreams.

Second, there is no single authority. They grew up in a time where different opinions are more tolerated. As self-absorbed as they are, they don’t want to be told – authority is not won by claim or to be obeyed. Choices must be given and they will explore and make their own decisions. 

Third, without much hardship experience, delayed gratification is not their belief. Everyday moments are equally meaningful as the grand dream of tomorrow. Success doesn’t have to be hard fought but can come from something you enjoy doing, and often time the unconventional fields (e.g., e-sports, internet host).

Fourth, digital is native. Their views and knowledge are greatly shaped by the internet world. They have developed a natural filtering scheme in face of huge amount of fragmented digital information. Any information that can’t get immediate cut-through will not make an impression on them. Once they find something interesting, they want to be engaged and never hesitate to share.

How can brands leverage this trend?

* Brand value claims need to echo with the values that are aspirational to youth.

VANS鼓励你的业余爱好

VANS, Encourage amateur spirit (really work on your hobby)

* Brand communication should take the tone of “a friend who knows you” instead of “authority who comes to educate”.

多芬男士广告

Dove Men Show understanding & sympathy

* Engage as much as possible.

青年造物节

* Brand needs creative strategies to generate impact in youth’s digital world.

创意赢得青年

9. Single nobles

Modern lifestyle, rising individual earning, and open social views foster the growing number of single nobles in higher tier cities. The average first marital age has risen from 23.6 to 26 y.o. in the past 20 years. It is estimated that 2 in 10 of 25-40 y.o. are currently single. Happily ‘unmarried’, most single nobles enjoy their newfound individuality. To them being "single" equals to "freedom to choose for my own and choose as I want. “Disposable income” has become more “disposable”, simply because they don’t face financial burdens to raise a family. Thus, they are able to spend in a more “reckless” way. Curbing one’s shopping desire to put aside money for the family is not their thing. They will therefore be the potential segment with strong spending powers for pricey clothes, upscale meals, exciting vacations and premium services.

Meanwhile, their needs are clearly different from consumers with families. First, personal usage occasions are prevalent thus quantity/service form should be adjusted. Second, the single nobles are time-luxury for leisure and can devote all time to personal interest. Third, the extended time living with their parents leaves them under-skilled for home chores. Free from family obligations, they also don’t feel the needs to improve their home making skills.

However, being a single noble never means being on a disconnected island. Most still crave for finding their better halves one day. Opportunities introducing more social interactions are highly valued.

How can brands leverage this trend?

* Product/service innovations that accommodate one person’s consumption, e.g. smaller product designs appropriate for single person usage; experiences (e.g. entertainment, tourism, accommodations) that are typically undertaken by a group or in pairs shall now offer versions that can also be played solo.

 

单身电饭煲

* Activities to kill time: self-improving programs, e.g. cooking class (offered by food/cooking brands), makeup class (offered by cosmetic brands), etc. will excite them and increase brand-consumer interactions.

花艺沙龙

* Services to help them better manage daily life. The most notable is the increasing reliance on “to door” services to make them survive from unwanted daily chores and low home chore skills.

逃离家务

* Brands acting as platforms for dating or socializing will boom to make them feel always connected.

共享单车告别单身 

10. New definition of “aging”

In the future 10 years, the 60+ y.o. population will account for more than 1/5 of total China (compared with 15% today). People who were born in the 60s are about to enter their retirement age. This cohort of consumers are different from earlier generations in the sense that although they grew up in a time of material scarcity, they are also the first beneficiaries of China’s economic take off – jobs were plenty, income rose fast, houses were cheap, and prospects optimistic. By the time they retire, they tend to have a greater level of confidence, financially, physically and psychologically. The notion of getting old is reinterpreted - as their children delay the time to start a family, their role of grand parents are also delayed.

Sound physical condition enabled by better nutrition and modern medical care further inspires their desire for a healthy and enjoyable retirement age. With high spending power and great willingness to spend, this new aging generation is too promising for any brands to overlook.

However, they are also more sophisticated and more demanding than the previous generations of older consumers. They are willing to pay premium for products that truly answer their needs. As their taste mature, quality and substance often weigh more than fancy design.

How can brands leverage this new trend?

* Brands need to look into their unique needs and offer true value to win their hearts, facilitating an active lifestyle in an older age.

Active Aging

* Premium product opportunities targeting the new aging consumers.

高端理疗

* Opportunities in antiaging and rejuvenating products and services.

恢复青春产品

* To reach the author, or to know more information, data and analysis of China's consumer insights, please contact us.

Source: Kantar TNS

Editor's notes

* We published a preview version of this report in December 2016;

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