The rapidly growing income of the population over the past decade has greatly strengthened consumer purchasing power with both participation volume and values spent. Though, despite news of a slowing Chinese economy, consumer spending remains positive and it’s even expected that by the end of 2020, retail sales will reach $6.76 trillion, ahead of the US with $6.03 trillion.

China is already the largest e-commerce market in the world with 1 billion people purchasing consumer goods online. According to the National Bureau of Statistics, in 2018 online sales of physical and non-physical goods reached $1.03 trillion and $292.5 billion respectively. Despite this, it may take time and effort to reach your target consumer, though there is huge growth potential once this happens. This market certainly can’t be ignored. 

The Chinese market is quite complex in regards to Chinese consumer behavior as it is always changing and accelerating faster with the continued integration of social media and new technologies. The best tactic, although obvious, is to identify your consumer group. Groups in different regions show diverse preferences and behaviours on various social media platforms. Millennials are considered the main consuming power for the upcoming decade as most of them are now buying products not only for themselves but also for parents and children. Additionally, the vast majority are of the one-child policy generation and are accustomed to the immediate satisfaction of desires. During our training you’ll learn more about them and the difference between more senior consumers, Millennials and post 00s (Gen Z).

Regarding geographical locations, the most active consumers are living in the 1st and 2nd tier cities and other urban areas as they generally have higher incomes. It’s estimated that by the end of 2020, there will be 100 million more urban dwellers.

The vast variety of the products and services available to them make Chinese consumers very selective about the goods they buy. In the past, consumer choice was determined largely by brand popularity, but now there are more diverse criteria to take into consideration.

The three most purchased categories are usually food and beverage, clothing and fashion and electronics. Chinese consumers are willing to pay more for quality, design and a personalized shopping experience. Personal care, health and education are also high priorities for these consumers. This means luxury goods, sports products and educational services are in great demand.

Another factor which determines consumer choice is product positioning on social media. Most online consumers use social media as a search engine. They check what their friends and celebrities buy and post about shopping experiences. It’s estimated that 90% of Chinese consumers belong to online communities and 60% trust other users’ recommendations.

4. CHINESE MARKETING AND SALES CHANNEL OVERVIEW