As China’s economy continues to rebound in the third quarter, the spending habits and preferences of millennial and Gen Z consumers are crucial to the future wellbeing of the country’s consumer market, according to a recent study.
Entitled How China’s Millennials and Gen Z Live and Spend, the insights come from research firm Euromonitor International, which included the impact of COVID-19 into its analysis.
According to the report, millennial and Gen Z consumers – defined at those born 1980-1994 and 1995-2009 respectively – accounted for 40% of the Chinese population in 2019, including 60% in urban areas. And this is projected to rise to about two-thirds (65%) of the urban population by 2025.
The report identifies three key themes and eight trends, which, perhaps not surprisingly, confirm the importance of digital devices and mobile commerce in the lives of these younger consumers, but also that they take increasing pride in local Chinese brands and are strongly influenced by key opinion leaders too.
Kelly Tang, a senior analyst at Euromonitor International, explained some of the key findings to Jing Daily, especially their relevance for China’s huge luxury, fashion and beauty markets.
“Chinese consumers very much rely on user reviews and recommendations when purchasing luxury [goods], and social apps like Little Red Book or Weibo and short-video apps like TikTok all enable influencers to connect seamlessly with consumers to promote products,” she said.
She also noted that luxury brands Dior and Louis Vuitton have been making use of short-video and live-streaming in their marketing mix, which underscores the increasing importance of this consumer trend.
There is also evidence that younger Chinese consumers are more receptive to domestic brands. According to the research, three-quarters (76%) of Chinese consumers bought more locally branded products over the past year, with 90% having a positive perception of these local brands.
“Chinese consumers are showing an increasing preference for local brands that demonstrate strong capabilities in leveraging new technology and adopting fashionable styles,” said Tang.
“As a result, it is no longer enough for luxury brands to simply use traditional Chinese elements in their product designs. Instead, they are expected to incorporate those elements more wisely into products and brand communication in China.”
Finally, the research found that young consumers in high-tier cities are willing to pay a significant premium for quality goods and experiences, including up to 25% more for premium beauty brands.
Sourced from Jing Daily, Euromonitor