We outline the key consumer trends which are shaping that pent-up demand
Chinese consumer demands are changing dramatically. One key trend is a new love of the outdoors, known for its positive impact on mental health.
[Shanghai] 16th January 2023: China’s borders have reopened. The world is now eagerly anticipating the return of the Chinese traveller. They are hungry for newness and looking to reconnect — with destinations, retailers, and brands.
This recoupling means having to reconsider existing relationships and dialogues with clients. China’s border was closed for over 1000 days. As a result, China’s retail and digital landscape has continued to evolve and transform in its own unique ecosystem. Reconnecting with Chinese consumers requires an in-depth understanding of what motivates them, how to engage with them. Chinese consumers’ expectations for experiences and seamless integration are high, this is what they are used to in China.
With that in mind, here are three key trends we have identified at Gusto Collective that are shaping new consumption demands in China today:
1. Be culturally relevant and emotionally touching
During the pandemic, China’s citizens increasingly looked inwards. From cultural movements to C-beauty, food to luxury destinations, a dynamic new confidence in the possibilities of homegrown names started to shape the collective vision.
Brands should look Chinese culture for inspiration, whilst remaining meaningful and authentic (ie: it’s not just about putting a rabbit on a bag, and calling it a Lunar New Year special edition) Whether that’s traditional Chinese dress (Hanfu) or larping (live action role playing), local authentic lifestyles and behaviours are now de rigueur. Alternative communities and new ways of being are now more accepted — from forgoing marriage to changing body shapes to voguing culture. Everything is on the move.
This “guochao” or national pride sentiment saw an acceleration in the appreciation of the local. It’s now a key inroad for companies looking to re-energise their campaigns. Developing a CSR programme in China, for China is key: this is all the more important following Beijing’s “Common Prosperity” policy. Donating to causes is good but is not nearly enough.
Luxury house Burberry understood this when it launched the Craft Designer Training Public Welfare project in April 2022. The sustainable development programme will enter 10 ethnic minority areas including the Miao, Tu and Dong nationalities within three years. Prada too has found favour with its Chinese New Year campaign in 2023 that supported the Manchurian tiger.
Luxury house Prada’s Chinese New Year campaign in 2023 supported the Manchurian tiger.
However, these campaigns and collaborations must be foregrounded in ethics as well as stylistically presented; retailers and luxury names which have been testing the water through collaborations, campaigns and social initiatives that go beyond the ordinary are seeing success. Canada Goose’s joint tie-up with designers Feng Chen Wang and Xu Zhen is a great example. This highly anaesthetised joint collection was presented against a chic, minimalist setting in which the garments have the feel of objects d’art.
Campaigns must be foregrounded in ethics as well as stylistically presented
In all, supporting the idea of society — whether it’s one that is deeply rooted in the past or an entirely new contemporary iteration — will win favour with consumers.
2. Mental health is the new wealth
Another trend expedited during the lockdown was the shift away from the overconsumption of big logos and material goods towards a focus on positive well being and with that, a more conscious retail footprint. This has facilitated the emergence of China’s wellness space which, according to the Global Wellness Institute, is now a $683 billion industry.
The central government has been keen to encourage the development of outdoor activities as part of its “rural revitalization” strategy alongside policies that promote better fitness and exercise. A push on the Beijing Winter Olympics 2022 and the emergence of new sporting influencers has fuelled an appetite for outdoor sports and activities — known for having a positive impact on mental wellbeing.
According to the Global Wellness Institute, China’s wellness space is now worth $683 billion
And not only does this require looking the part for such hobbies but these latest adopters are even more focused on the entertainment value and “leisure” element of fitness and athleisure pursuits. Clever applications of this can be evidenced in campaigns like the peaceful ocean-inspired one from Nio X Tide stylish or the tranquil spa-inspired visuals from Rituals X Know Your Self.
These expectations will apply to vacations and travel too which is expected to return to 2019 levels by late 2023. Despite this pent up demand, priorities and habits have changed. Now, no matter where or for how long, trips need to be immersive and memorable: local tourists are sybarites, seeking unique experiences that are sensational and unforgettable. Unlike material things, life’s journeys make it worth living, be they emotional or physical, cultural or restorative.
Nio X Tide’s stylish campaign cleverly levered inspiration from China’s $683 billion industry wellness sector.
The Rosewood Hotel Group was inspired by this point for its Summer Immersive campaign which spoke to the senses while Aesop recently evoked the pleasure of patience.
The halo effect from exceptional holidays will be a vital, motivating factor to ensure connectivity when travellers return back home.
3. Ride the Metawave
Finally, it’s worth keeping in mind that China is highly digitally advanced. The merging of the physical and the digital (“Phygital”) is simply the norm and the “Chinaverse” has moved beyond a dream and into a built reality. The country’s “14th Five-Year Plan for Digital Economy Development” announced it will keep evolving the development of tech with more than 30 regions issuing supportive policies and action plans related to the concept.
In total, China’s metaverse industry is expected to reach $28 billion by 2027 and its tech conglomerates have all profited from its unique rollout (Alibaba, Tencent, Baidu, Xiaohungshu and more). And even though this ecosystem operates on different rules (such as digital collectibles and gifts replacing NFTs or a flat fee standing in for crypto currencies), there are countless ways for brands to cultivate the opportunity.
Global makeup leader M.A.C. also employed the tactic when it partnered with China’s first digital ambassador Ayayi.
This runs from creating content with metahumans, which are anticipated to generate $14.5 billion by 2025. Kerring’s jewel in the crown Gucci recently tried the strategy on lifestyle platform Xiaohongshu (Little Red Book) by tapping the beret wearing virtual human ALiCE. Global makeup leader M.A.C. also employed the tactic when it partnered with China’s first digital ambassador Ayayi.
Virtual experiences are now pretty much expected in the mainland. But it’s good news as these can enhance a brand’s O2O offering. At 2022’s China International Import Expo, Dior introduced a virtual maison experience with a VR label Pico 4. Meanwhile Canada Goose’s aforementioned collaboration launched with an AR exhibition which featured designs from the Feng Chen Wang X Xu Zhu line on WeChat.
Virtual experiences are now pretty much expected in the mainland
Another area where businesses can expect to see results is by creating digital collectibles and gifts that can elevate VIP experiences. Burberry employed this tactic to accompany a physical installation in Chengdu: over 360 unique renditions of artworks were available every hour on WeChat and Tencent’s Huanhe. When Balenciaga and Adidas partnered in November 2022, they also dropped digital pieces which were gifted with IRL purchases of sneakers.
When it comes to China, Web3 is already there. Use its codes to extend your brand DNA virtually, acquaint consumers with your IRL products and boost engagement. It’s expected.
Over the last three years, significant changes have taken place in China. Don’t overlook, misunderstand or fail to prepare for the opportunity that these discerning consumers offer. Embrace the possibilities!
For advice on how to navigate the Chinese market, please connect with us at Gusto Collective. As Asia’s first brandtech group, we deliver best in class storytelling, powered by data and technology. For further information please email hello@thisisgusto.com
