Despite the slowdown of the economy, the Chinese consumers keep spending. In fact, the McKinsey 2016 China consumer report showed that the confidence of Chinese consumers has surprisingly remained unchanged in the past three years. However, different reports have shown that there are changes in what they are buying and how they are buying it.

  • Consumption is shifting from products to services

Chinese consumers are more selective about their spending. There is a shift from products to services. They now allocating more of the income on lifestyle services and experiences like going to the cinemas or travelling, while the spending on household food and beverages is declining. Chinese consumers are now looking for a more balanced life – where health, family and experiences matter most.

Meanwhile, the consumption is moving from mass products to premium products. Chinese consumers are willing to pay more for the best and most expensive products. This is where international brands come in and hold leadership in the premium market segments.

  • A growing loyalty to brands

You may have heard of the low loyalty level of Chinese consumers. Companies doing business in China, especially the retailing probably know that Chinese consumers change brands for cheaper deals or eager to try new products. It is not easy to make Chinese consumers stay loyalty to a brand.

However, this is improving. More and more Chinese consumers are willing to stay focus on a short list of brands or even stay loyal to single brands. As they are becoming more sophisticated, they have experienced many different brands and are able to tell which ones are better. Moreover, in our previous post, we discussed how powerful word-of-mouth is in China. Thanks to social media and internet influencers, Chinese consumers have been influenced by what others have experienced with certain brands, without having to try these brands themselves. They tend to trust the recommendations from friends and influencers. Chinese consumers are starting to look for value, not just low prices. It is expected that they will continue to improve their brand loyalty level.

  • More health oriented

Apart from seeking for lifestyle experiences, Chinese consumers also care more about living healthy. One of the reasons is that China has now a larger middle class than any other society – when people get richer, they are more aware of their health. Having a healthy life has increasingly become the middle class’s lifestyle. Other reasons include the growing fear of the potential health problems caused by pollution and an ageing population.

In addition, Chinese consumers’ spending on health supplement products are growing. A report done by the Hong Kong Trade and Development Council estimates that China’s health food and nutritional supplement market is worth more than USD 145 billion. The market is expected to grow continuously.

  • They still love to travel

In 2015, China had 117 million outbound tourists. The Chinese have always liked to travel. However, their spending pattern and desires have been changing. As we mentioned in one of our posts, free independent travellers (FITs) accounted for 70 percent of the total outbound trips in China. These FITs care more on experiences and leisure in a destination. They are more interested in independent tours, cruise tours and tours with outdoor activities.

Meanwhile there is still a group of Chinese tourists who love to go shopping – especially luxury products. Chinese shoppers account for more than one third of the global luxury purchases. About 80 percent of the buying were done outside China. Currency exchange rates and import tariffs mean higher prices in China. Therefore, Chinese consumers use the opportunities to travel abroad to buy luxury goods. For them, Europe is the world’s biggest in-season outlet.

Capturing the Chinese overseas spending is important, but making the products that Chinese consumers have tried abroad available in China is equally critical. This is when cross border e-commerce comes into play. It is a great opportunity for Chinese consumers to buy products from foreign brands that are not available in the Chinese market yet.

In GoDigitalChina, we have a dynamic team with both Norwegians and Chinese. Understanding both the Norwegian and Chinese cultures, GDC is able to give you the best approach to market your brand to China. Contact us now:

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