With a population of more than 1.4 billion, the Chinese market is one of the most active and attractive markets in the world, but Chinese consumers and the methods of reaching out to them are very different to the West. In this module you’ll gain an understanding of the Chinese market, the main consumer groups and the digital trends shaping consumer behavior in modern China.
1. CHINESE MARKET OVERVIEW
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.
2. MODERN CHINESE CONSUMER OVERVIEW
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.
3. MOST DESIRED PRODUCT CATEGORIES AND THE REASONS BEHIND IT
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
There are different marketing and sales channels which will be discussed during the training but generally, the three channel groups accessed by consumers using social media, SEO and media are:
Depending on the industry a combination of different channels might be used. Chinese consumers expect brands to provide unique shopping experiences which are best made possible by collecting data about their consumption behavior. This is why the best way to engage with potential consumers is through social media.
Staying updated about current market conditions and digital trends in China is a must for anyone to achieve success.
China changes so fast. How can you guarantee that you understand Chinese consumers?
Our team is responsible for strategy and retainer projects in addition to training so we constantly launch surveys, read reports and research, have contacts on the ground in different places in China and are always tracking changes in consumer preferences and shopping behaviours.
Has Covid-19 changed consumer preferences?
Yes. The new normal in China is already establishing itself. People are more conscious of their health than ever before and their consumption preferences have changed.
Will I learn how to identify my target audience in China?
We’ll talk about different consumer groups and their preferences and spending habits.
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