SHANGHAI: A number of forecasts have warned of a slowdown in China’s economic growth next year, yet the country’s millennials appear unconcerned because almost three-quarters (70%) of them intend to spend more on luxury goods and services.
That is one of the headline findings of a survey of about 3,000 mainland Chinese consumers, two-thirds of whom were millennials, conducted by KPMG China and Mei.com, a Chinese online shopping platform, in September 2017.
The two companies said the aim of their study was to understand the current and future shopping habits of mainland China consumers and analyse how companies can drive their business and marketing strategies accordingly.
They concluded that millennials, who the study defined as people born after 1985, are “set to disrupt China’s retail sector as their spending increases” and that retailers are having to transform their businesses in response, especially regarding online.
That’s because almost nine-in-ten millennials said they shop online more than once a week and 80% expect to spend even more time shopping online in 2018.
In addition, almost a third (31%) expected to see a significant increase in their income over the next five years, prompting KPMG China and Mei.com to observe that millennials will “become a key component of China’s retail sector”.
“It is increasingly difficult for a single brand to be able to fill multiple segments. As China’s retail market continues to develop, more consumer groups such as millennials will gain prominence,” said Jessie Qian, Head of Consumer and Retail at KPMG China.
“It is imperative for companies to diversify and maximise their relevance to different groups of consumers,” she added.
The report went on to advise brands that they need to ensure they have all the major post-purchase feedback channels covered, as half of millennials and 44% of other respondents indicated online feedback as a key shopping influence.
In addition, two-thirds of respondents indicated that they post comments on an online store following a purchase, while 59% do so on WeChat or other social media platforms.
“The constant connectivity to the internet creates plenty of opportunities for businesses to impact consumers’ attention and behaviours,” said Thibault Villet, Co-founder and Chairman of Mei.com.
“Massive amounts of contextual data can also be used to personalise interactions with greater precision.”
Sourced from KPMG China, Mei.com; additional content by WARC staff