“The biggest misconception about China is to understand that modernization means westernization. (westernization)”
Born in the mid-1990s, China’s young population of about 270 million has become the largest spending segment in history.
They are the main consumers of cosmetic products. travel service and online shopping, China’s Gen Z consumption will grow fourfold by 2035, amounting to 16 trillion yuan, or about 80 trillion baht.
Bloomberg News reports that China’s Gen Z has enough money to spend. Meeting the needs of this new generation is therefore an important issue for both foreign and domestic brands. But the difficulty now rests on Western companies because China’s Gen Z is somewhat nationalistic. and can avoid the consumption of foreign products
Young but paying a lot
“Gen Z is China’s first true consumer.”
Zach Dichtwald, founder of trend research firm Young China Group, said, “Like the baby boomer generation in the United States, Gen Z of China is redefining the consumer economy. and will influence the market throughout their lifetimes.”
Although China’s Gen Z population is less than India But their purchasing ability was much greater. As generations in the United States and Europe grew up dealing with the effects of the global economic crisis. The younger generation in China knows only economic growth. The biggest economic crisis they will face is the economic impact it has had during the COVID-19 pandemic. but even then Their parents are ready to spend to meet the needs of the new generation of Gen Z.
The report found that a quarter of China’s Gen Z generation, or about 25%, don’t save money at all. While the global average percentage of unbilled generations is 15% in China, a term has now been coined to refer to the young generation who pays their entire salary each month. Most of them spend on their own needs. and are likely to have no children. or buy fewer assets
more intense nationalist ideas
What makes China’s Gen Z so different from their predecessors and makes them the The ‘biggest threat’ to multinational companies like Sony, Dior, Nike and other big brands. It is a kind of nationalism that is growing in the younger generation of China. This is supported by the Chinese government’s desire to expand its global influence.
In the past, Chinese youths have opposed clothing company Hennes & Mauritz AB, or H&M, and footwear company Nike, after both companies condemned the use of cotton in Xinjiang believed to have violated human rights by Uighurs. This led to a massive boycott of Western products in China. Heavy impact on the business, especially H&M, which until now has not recovered.
Conflict with Western brands at that time It opened the way for local Chinese firms Anta Sports Products Ltd. and Li Ning Co. to announce Xinjiang cotton sponsors. Ready to release products that are Chinese. even decorated with Chinese characters and a design inspired by the Forbidden City. to sell to consumers. The results showed that by the end of January 2018 By 2022, both companies account for a 28% share of sneaker sales, an increase of 12% from the same market share.
The same trend of change also occurs in other categories. which used to be dominated by foreign brands such as beverage products to cosmetic companies where Chinese local companies gain more market share
Not impressed with foreign brands
China’s Gen Z is different from their parents’ generation. They no longer view Western products as premium products.
Western trends dominated the Chinese market when the country became more open to foreign investment in the late 1970s, leading to an influx of brands including McDonald’s Corp. Toshiba Corp., Adidas and Starbucks Corp. Help China grow into the world’s second largest economy.
Sarah Lin, a 22-year-old student from Beijing, said: Her parents were still excited about the product just because it had a foreign language label. because they view foreign products as premium products while herself after studying abroad Realize that many brands that are considered luxury in China are not that different from general products in the country.
“In the past, people would think that the people who wore Li Ning’s shoes didn’t have enough money to buy Nike shoes, but foreign brands were not as mysterious to me as their parents. I don’t want to spend a lot of money just for branding. I want to spend money on valuable designs. Worth the money spent.”
Today, Sarah chooses to look for products made in China more and more. Because the quality and design of Chinese products have been developed more and more.
Meeting the needs of the new generation of Chinese consumers is a challenge for foreign companies. Each year, Western brands like LVMH and Zara release bags and sweater sets to celebrate the Chinese New Year in China. But the designs of these international brands are often mocked by the younger generation of Chinese who prefer to buy clothes that express their individuality rather than buying mass-produced clothes.
Like their peers around the world, China’s Gen Z grew up online. Using social media to sell products is becoming an increasingly important tool for brands. Sales channels that allow product buyers to interact directly with streamers are becoming increasingly popular. and is expected to grow into a business worth more than $1.6 trillion by 2025.
Western companies are not familiar with this method of selling. Often get results that aren’t as impressive as the brands within China. such as the one-hour livestream by Louis Vuitton two years ago. even attracting the audience But it was criticized for saying the scenes used in the streaming were too cheap compared to the luxury of the brand.
Want a product that looks good and tastes good.
Gen Z’s purchasing power in China also means that their tastes and preferences will continue to shape the market for years to come.
“Foreign brands should be aware that compared to the needs of the previous generation China’s young consumers are demanding more from brands. They can no longer enter the market arrogantly,” said Veronica Wang of OC&C Strategy Consultants, an international business planning firm.
“They can’t say ‘hey, this is our cool product, use it’, but they have to try to understand what Chinese consumers want. must be open to Chinese culture and open up more to adapt to the local market.”
“The biggest misconception about China is to understand that modern Modernization means westernization. Westernization,” said Zach Dichtwald, founder of China’s new trend research firm.