Chinese consumers want ‘richer experiences’. Can you deliver them?


Monday October 21, 2019 - Posted by:

China is a market that holds enormous growth potential for ambitious brands, but also poses major challenges, particularly for international businesses that don’t have an innate understanding of the country.

Chinese street with consumers

In general economic terms, China is set to grow by 6.1 per cent in 2019, according to the International Monetary Fund. This dwarfs the rate of expansion expected in other major economies like the US (2.4 per cent), the UK (1.2 per cent), Japan (0.9 per cent) and Germany (0.5 per cent).

China is also on course to see major developments in specific industries. Its ecommerce sector is forecast to see sales growth of 27.3 per cent this year, while total retail sales are expected to rise by 7.5 per cent, which will see China overtake the US as the world’s biggest retail market.

This all sounds very encouraging for international brands targeting growth on the global stage. However, it’s vital to understand that succeeding in this region requires a lot of careful research and planning, particularly around what local consumers want and expect from brands.

For companies that have prepared in the right way, it’s clear China offers the necessary audience demand and as well as the economic fundamentals to deliver success for foreign businesses.

‘Richer experiences’

Your chances of success in China will increase greatly if you have certain advantages that will help you stand out in the eyes of consumers, such as a strong brand message, and the right language facilities to express it.

It’s also important to have a clear idea of what your target audience wants, which you can learn through market research and effective engagement with customers on the most relevant platforms, such as their favourite social media channels.

Looking at consumer trends across the country as a whole, research has shown that many people are looking for unique, high-quality experiences from brands, and are willing to pay for them.

Mintel’s latest annual Chinese Consumer Report revealed that the country’s citizens are increasingly seeking out “richer experiences and quality of life.”

A substantial majority of respondents (91 per cent) felt that quality is more important than price when making a purchase. Encouragingly for international brands planning to enter the market in the near future, 81 per cent of consumers showed an interest in fresh experiences, such as buying a product they have never bought before or visiting a new holiday destination.

Jessica Jin, Mintel’s category director for China reports, said: “With China’s economy still experiencing healthy growth, Chinese consumers, today, are increasingly in pursuit of richer experiences and quality of life.

“Furthermore, our research shows that they are becoming savvier spenders. Consumers are willing to pay a premium for products and services that offer them new and richer experiences that align with their values – and it is the stable growth of disposable income that is supporting this lifestyle.”

She also noted that the stability of the Chinese economy has allowed consumers to expand their interests beyond basic necessities like food and drink, towards “more emotional requirements like attaining enjoyment from holidays, leisure and entertainment.”

The underlying trends for retailers, ecommerce merchants and other businesses planning an expansion into China are undeniably positive. Total consumer expenditure increased by 8.6 per cent in 2018, Mintel found, in line with the country’s per capita disposable income growth of 8.7 per cent.

Acknowledging China’s uniqueness

To take full advantage of the clear potential China offers for international growth, first you must gain an understanding of the nation and its people. One of the biggest mistakes any international brand can make when launching here is assuming China can be treated in the same way as any other global market.

This country is distinctive in many ways, from the physical stature of its people to its cultural expectations and sensibilities.

Clothes retailers, for example, need to acknowledge that their products have to be sized differently in China, since the local population is generally smaller than that of Western countries. The average height of a man in China is 169.5cm, compared to more than 175cm in Germany, France and the UK.

Furthermore, you need to be aware that Chinese consumers have a unique range of cultural norms and traditions. This means a joke or reference that connects with Western audiences could, at best, make no sense in China or, at worst, cause offence.

You can increase your chances of success in this country by getting to grips with the language and embracing localisation, which will help you to communicate effectively with local audiences and begin to build relationships.

Once you have key elements such as market understanding and language capabilities in place, you can steadily develop your brand in China and earn the trust and loyalty of consumers by catering to their unique, evolving demands.

Find out more

Locaria’s expert services can help you prepare for success in this hugely promising market. To find out more, give us a call on +44 (0)20 3948 6800.

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