10 Chinese Consumer Trends: What to Expect this 2019 and Beyond
If there’s one thing global companies can’t overlook is China’s continuous growth in internet usage beyond its borders.
Whether consumers are based in Mainland or overseas, the Chinese consumers’ behaviors—how they spend the money, where they spend the money, and how much they spend are—shaped by several factors.
The change of lifestyle, the increase in income, and robust technology solutions and retail strategies, trade policies, and regulations between countries are some contributing factors. However, where are the Chinese consumers heading this 2019?
Despite the global decline in growth of internet users– the global penetration rate of close to 50% growth is slowing— according to the most recent Mary Meeker Internet Report in June 2018. However, China’s internet users are increasing, the latest report in August 2018 with more than 800 million internet users and 98% penetration on mobile internet use.
So, what’s next for global companies? Here are the Chinese consumers and internet trends you need to watch out:
#1 Middle-class income earners will shape consumption: cautious and would save more
The middle-class income earners in China are over 400 million, and despite the growing numbers, they are burdened by the rising costs, debts, and mortgages, and worries of the future, that’s why they are cautious in spending, as the South China Morning Post put it, they are “tightening the belts” as they worry about the future. On the other hand, “optimists” see this segment’s ability to uplift the country.
#2 Emerging senior market with new demands
The increasing number of older people in China also creates opportunities for healthcare, pharmaceutical, and medical industries, including insurance as this market segment will be likely to spend more on these categories by 2020. Unlike their younger counterparts – millennials or the younger generation – the senior consumers are less likely to spend on travel, clothes, and leisure. Growing up in the harsh conditions of the Cultural Revelation, the mindset and spending habits are stringent and not luxury-focused.
#3 Personalization will create more engagement
The access to technology – mobile apps and other tools — drive consumers to desire personalization in products and services since they are aware of the busy schedules and its effect in their health and total well-being. Consumers in China are well-connected to mobile apps, and the availability of technologies and options will drive them to desire personalization to match their needs at the intersection of beauty, travel, sports, food, and travel.
#4 Emerging technologies like AI and IoT will transform the retail and e-commerce
According to Mintel China & North Asia Consumer Trends report, “BOLD” is the new buzzword as brands will jump in the bandwagon of experimenting with products and services across all the age groups. AI and IoT will play an essential role in retail and e-commerce as companies integrate these technologies for engagement and efficient transactions, from offline-to-online and vice versa.
Consumers data and IoT overall will help companies understand the purchasing behaviors. Paying using mobile wallets will be a norm, that companies would have to be on board to provide better shopping experience, for example, consumers scan codes in-stores to get prices and information without cash in hand, but instead pay everything via mobile phones.
#5 Chinese consumers will opt for a healthier lifestyle
The hectic schedule and stress from work and living conditions encourage consumers to change their lifestyle and begin to care more of their total well-being. Consumers will opt for more balanced healthy solutions, including technologies that support these categories, which also match the personalization they desire in how they consume products and services. Brands should think of tailored solutions across food, health, fitness, sports, and even leisure. According to Mintel’s report mentioned above, 45% of Chinese consumers say that a healthy lifestyle is a priority to them, and 49% think that health supplements made from food formats have better effects.
#6 O2O (online-to-offline) will elevate the shopping experience
According to Bain & Co. study, 100% of Chinese consumers will do their research and seek inspiration online before purchasing items offline. This trend will likely open more opportunities for retailers to bridge the gap between the in-store experience and online shopping. The traveling Chinese consumers are used to mobile payments, localized version of customer service (translation in Chinese) in-stores, and innovative shopping experience that will be consistent throughout the buying process.
#7 Traveling millennials will create the next wave of outbound tourism
Another market segment to watch out in 2019 are the millennials or those born in the 1980s and 1990s. They are redefining adulthood by living in the moment and spending on experiences instead of being mortgage slaves, despite the uncertain and turbulent housing markets and economic conditions. Experts believe that regardless of the declining economy, the numbers will remain high. These independent millennials will drive outbound tourism in the next few years. The Pacific island will benefit from these tech-savvy travelers who consider traveling as a way to enjoy life.
#8 Changes in the life stages of female consumers and status
There’s an increased focus on diversity as the transition in life stages of female consumers prompt them to take jobs and roles in the family that challenges the traditional assumptions. According to Mintel China & North Asia Consumer Trends report, 63% of Chinese women believe that childbearing would have a large impact on the development of their career. Meanwhile, 30% of Chinese consumers say that marriage is not necessary to complete one’s life. So, brands should be aware as well on how to communicate messages that tie up their vision or mission in their products and services and marketing channels. More women are focused on their careers and self-development, which prompts brands to show support and empowerment.
#9 Video consumption will continually grow
As consumers prefer to consume information on mobile devices, online video is expected to increase in 2019. The types of videos are more diversified where short videos, newsfeed types will catch the attention of consumers. The social networking activities declined in 2018 but with a large jump on videos according to Meeker report, from 13% to 22% records from 2016 and 2018 respectively. Brands would need to push more on video marketing strategies to ensure they engage well with the target audience with specific platforms for publishing.
#10 Consumers will also seek inspiration to relevant media
While brands invest in ads across mobile platforms and channels, consumers will be more interested in a search for relevant media instead of a singular message across platforms and channels. They would be keen to search product information and review from other key influencers or sources before purchasing. Personalization, data analysis, and optimization will help brands sort things out for the needs while sending a consistent message on ads.