Good vibes only: What brands should look out for as China reopens

The pandemic made overseas travel impossible, but now that borders are open again R/GA’s Jessie Wu says brands that offer invisible emotional values, such as companionship and comfort, will win the hearts of Chinese consumers.

As one of the largest countries in the world and consistently among the leading import countries, China is a market that brands consistently have their eye on – be it consumption patterns, new trends and more.

Without a doubt, COVID-19 fundamentally changed the consumption mindset of Chinese consumers. Three years on, as China’s borders reopen, we see two interesting divergent trends that brands should take note of.

First: With freedom comes revenge spending

On one hand, with the recovery of retail and logistics, consumers’ suppressed consumption desire is awakened, especially in industries related to indulgence and entertainment.

We are seeing overbooked fine dining, sold-out vacation packages, museums full of visitors and many more examples. The revenge spending seems to be a way for consumers to make up for lost time. Among all these industries, tourism is definitely the one receiving immense attention but with many unknowns remaining.

Three years of COVID-19 was a massive hit to international travel. Meanwhile, domestic travel grabbed the golden chance to develop. Short-distance trips made top-tier consumers consider many local cities. As a response to such shifts, we have also seen the improvement in domestic trip-related facilities and services.

Regarding outbound travel, the industry is definitely seeing a surge in searches and enquiries among Chinese consumers, with APAC being the top choice. Yet the actual rebound might take longer, mainly due to the backlog and delay of visa applications and the changing policies for Chinese tourists among foreign countries.

Other than these two factors, fluctuating airfares and the slow recovery of international transport capacity might also further hinder the process.

Second: With an uncertain future comes tightening purse strings

On the other hand, the pandemic caused immense uncertainty for everyone. A large group of consumers is turning towards a more conservative consumption pattern upon realising that they need to be more cautious about the future.

The younger generations – Gen Z and millennials – have even become pioneers in making long-term plans for financial security. Such a trend is also impacting everyday purchase behaviours. Consumers tend to make wiser and essential decisions, reflecting a more cautious mentality.

Meanwhile, we are observing a change in how consumers judge valuable purchases these days. For brands and products showing strong emotional values, consumers are embracing them with a very positive attitude.

How brands can remain top-of-mind: #GoodVibesOnly

While tangible price tags are being scrutinised again and again, invisible emotional values are winning big. The love towards brands and products offering a sense of companionship and comfort is not only driving positive reputations but also spurring powerful business performance.

For instance, according to data from CTJPA, Jellycat’s revenue on T-mall clocked in at more than 100 million RMB in 2021, with 47% year-on-year growth and seemingly on the uptrend.

With such great earnings potential, bringing intangible emotional value to tangible touchpoints is now a priority. Here’s what brands can do to stay ahead:

• Keep the conversation going: Understanding is the foundation for effective emotional value exchanges. It is critical for brands to build and sustain an interactive platform where they can hear the consumer’s voice in real time. One-way communication can seem preachy and inadvertently present a lack of empathy towards a group of consumers seeking respect and understanding.

• Spark joy: ‘Good vibes only’ is no longer just a Tinder headline. Spending time and money on something that helps you feel good is a no-brainer. Life can be unpredictable and brands can use the opportunity to bring a little joy to a consumer’s day. This can take many different forms – a satisfying cup of milk tea, a relaxing meditation session on a fitness app, or a glamping afternoon shared with close friends. The pursuit of happiness is ever present throughout humankind and is ever pertinent for such times.

Beyond utilitarian value, the invisible emotional value that local and international brands and products can offer will be the fast pass to win consumers’ hearts. The reopening of China to the world provides an opportunity for brands to be exposed to a group of consumers that have not had the opportunity to travel in the past three years – but such enthusiasm should be met with caution.