# Chinese consumers

**Product:** Chinese consumers appreciate uniqueness in products and expect to have more customized services. Moreover, Mainland Chinese consumers are more confident about purchasing products with Chinese elements. Hence, products that offer customization and Chinese elements can be of interest to Mainland Chinese consumers. In addition, Chinese consumers purchase more often than before and during short intervals, which makes it important for luxury brands to release new products more frequently.

**Digital storytelling:** New content is becoming more important in terms of competing for the average consumer's fragmented attention span. Considering that digital channels have undoubtedly become dominant in obtaining brand information, it is important to create interesting digital contents with good visuals/ videos on brand websites, on brand social media accounts, and on other digital platforms. Also necessary is to collaborate with KOL while leveraging their authenticity, content-creation opportunities, and influence over fans while co-creating diversified content for brands e-commerce is a must for large numbers of low-tier city consumers in China, who are overall younger. For those brands to launch an e-commerce presence, it is suggested different approaches are applied in view of brand positioning and reputation. It is more appropriate for an established and higher-end luxury brand to have an official e-commerce website or a miniprogram WeChat store to maintain its exclusivity and luxurious brand image. For entry-to-mid-level brands with limited brand awareness, cooperation with leading platforms such as Tmall or JD.com may prove more efficient.

Meanwhile, official brand e-commerce websites shall provide a better user experience especially in developing flexible mobile applications, designing user-friendly buying processes and leveraging creative contents for driving e-commerce.

China consumers are more likely to shop online than their Hong Kong counterparts, with more than 70% of Mainland China consumers more comfortable purchasing almost everything online except for automobiles, watches and jewellery.

#### Target audience: GenZ and Millenials

We are totally aware that there are millions of Millenials & Gen Z in China, that is why we need to segment them into smaller groups by their lifestyles, shopping habits wants and needs.

Significant spending force, Impulsive, proud and empowered – Generation Z, must concentrate on them. In luxury, the sustainability decade is underway. Generation Z, born from the mid-1990s to the early 2010s, is maturing into a cohort of adults who will reward brands that have a positive impact on the environment and society, and disconnect from those that do the opposite; many older consumers are already leaning the same way. Meanwhile, the global shocks caused by Covid-19 are only adding to the mounting pressure for more sustainable approaches across business and government.

Official survey shows that consumers are making their first luxury goods purchases earlier in both Mainland China and Hong Kong. On average, Generation Z consumers between the ages of 21 and 25 said they generally bought their first luxury item at no more than 20 years old, which is two to three years younger than Millennials aged 26 to 35. In general, Hong Kong consumers purchase their first luxury goods at a younger age than those in Mainland China, with 9% of Hong Kong respondents purchasing a first luxury item before the age of 18.

GEN ZPost-95s, Gen Z, or Dotcom kids - They go by many names and are a truly global generation, shaped by the technology of the 21st century.

Gen Z will make up 27% of the population by 2025;

About half will earn an university degree;

They'll have an average of 18 jobs across 6 careers and 15 homes;

Around 2,000,000,000 Gen Zs globally.



Gen Z has a high preference for unique experiences that help them stand out from the crowd. They're also much more willing to pay for these experiences compared to other generations. This pursuit of uniqueness applies to products so they're seeking customized and limited edition products as opposed to mainstream products that feature flashy logos or brand names. Guochao isn't just a fashion trend. It also reflects a strong appreciation and recognition of Chinese culture.

China's 400+ million millennials represent a huge and emerging consumer group with a large impact on the economy. Most millennials own smartphones that are constantly in use and used in more versatile ways than their counterparts in the West. Millennials enjoy luxury brands. Forecasts expect them to make up 40% of global luxury goods sales by 2024, with around 58% of that group aged 18 to 30. It's key for brands to understand the consumer behaviours of millennials.

The sales are largely driven by China’s tech-savvy millennial generation — the average age of Chinese luxury shoppers has dropped from 35 to 25, according to the World Luxury Association — and where do they shop? Online, or, more accurately, on their phones.

Currently, the average monthly income of Millennials (Rmb11,738) is lower than the rest of the population (Rmb12,423), with close to two-thirds of Millennial respondents earning less than Rmb10,000 a month. In addition, their average monthly spending is also lower at Rmb5,565 a month. It also goes to show that Millennials in China are, in general, quite prudent spenders, with their average monthly spending at less than half of their income.

![Chinese consumers income level growth. Information source:https://bit.ly/3tmP6YO](https://3292444071-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FOsqJ0kWLXo6cQCD98xwi%2Fuploads%2FKJrLdxOjwI5r6qqY9pfw%2F1lentele.png?alt=media\&token=4f85b741-04d0-41de-b6b6-2f5ad8faabd5)

![Chinese consumers average monthly income and spending. Information source:https://bit.ly/3tmP6YO](https://3292444071-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FOsqJ0kWLXo6cQCD98xwi%2Fuploads%2FVUUG2RgjrDt5xRzhBAZ7%2F2lentele.png?alt=media\&token=7f9c3f34-c09c-4e33-84b9-dc5c154e4641)

For luxury brands, growth will likely be driven by young consumers in China’s lower-tier cities, where it’s unusual to find a Louis Vuitton or Gucci flagship at the local mall. Over 50 percent of luxury consumers in China live in cities that are second-tier or lower, but they have limited access to luxury western brands’ store networks, according to a report by the Boston Consulting Group and Tencent.

For example, providing beauty products for over 100 million people in China, Lancôme has benefited from the surge in demand of the middle and upper classes as well as Millennials. The younger generation that has more purchasing power than their parents are now seeking exceptionally high-quality products, which have a positive social impact. One of Lancôme’s successes is that it was able to listen and adapt to Chinese consumers' needs. On the other hand, Lancôme’s increasing sales are resulting from Chinese consumers’ daily cosmetics routines that are becoming more sophisticated than before.

#### Shopping habits:

Online was the fastest-growing channel, increasing by 50% and nearly doubling its share to reach 23% of luxury sales globally (up from 12% in 2019). Online sales made up €49 billion in 2020, up from €33 billion in 2019. Globally, the online channel influenced 85% of luxury transactions (compared with 75% in 2019), and 40% to 50% of purchases were digitally-enabled (compared with 20% to 25% in 2019).

Research indicates that 72% of GenZ will spend money on a product or service that is ‘sustainably produced.’ Apparel, accessories, and handbags are dominating the resale marketplace, and 68% of women have bought or are willing to buy from a second-hand marketplace. (Farfetch has recently launched SecondLife).

Gen Z is the primary internet user group on short video platforms.
