Podcast
Questions and Answers
What factor is becoming increasingly important to consumers when choosing products?
What factor is becoming increasingly important to consumers when choosing products?
What should brands emphasize to strengthen their product's appeal?
What should brands emphasize to strengthen their product's appeal?
What is a significant consumer behavior trend expected in the next 1-2 years?
What is a significant consumer behavior trend expected in the next 1-2 years?
Which of the following is NOT one of the Golden Rules for selling products to Chinese consumers?
Which of the following is NOT one of the Golden Rules for selling products to Chinese consumers?
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Which types of products are suggested to be a long-term focus for brands?
Which types of products are suggested to be a long-term focus for brands?
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What has significantly influenced the shopping habits of Chinese consumers in the past three decades?
What has significantly influenced the shopping habits of Chinese consumers in the past three decades?
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Which tier of cities in China generally shows the highest per capita income and purchasing power?
Which tier of cities in China generally shows the highest per capita income and purchasing power?
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How has the age of a consumer influenced their spending habits according to the content?
How has the age of a consumer influenced their spending habits according to the content?
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What primary characteristic defines the 'frugal retired' consumer group in China?
What primary characteristic defines the 'frugal retired' consumer group in China?
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Which characteristic is NOT associated with the 'wealthy retired' consumer group?
Which characteristic is NOT associated with the 'wealthy retired' consumer group?
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What is the average annual income of Chinese citizens mentioned in the content?
What is the average annual income of Chinese citizens mentioned in the content?
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Which of the following describes the cultural aspect of China that affects consumer behavior?
Which of the following describes the cultural aspect of China that affects consumer behavior?
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What does a 9折 discount signify in terms of pricing?
What does a 9折 discount signify in terms of pricing?
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What major market trend is seen among Chinese consumers aged over 50?
What major market trend is seen among Chinese consumers aged over 50?
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Why do Chinese consumers value product packaging when buying gifts?
Why do Chinese consumers value product packaging when buying gifts?
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What is a common practice among retailers when offering discounts on basic produce in China?
What is a common practice among retailers when offering discounts on basic produce in China?
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What is the significance of the pricing strategy for foreign brands in China?
What is the significance of the pricing strategy for foreign brands in China?
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What percentage of internet penetration did China achieve in 2022?
What percentage of internet penetration did China achieve in 2022?
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Why might older consumers wait for discounts in stores?
Why might older consumers wait for discounts in stores?
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What does 'face' refer to in Chinese culture?
What does 'face' refer to in Chinese culture?
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How does the price sensitivity of Chinese consumers affect product categorization?
How does the price sensitivity of Chinese consumers affect product categorization?
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What characteristic distinguishes ride-hailing from traditional car ownership in terms of penetration?
What characteristic distinguishes ride-hailing from traditional car ownership in terms of penetration?
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Which e-commerce platforms are notably shaping consumer habits in China?
Which e-commerce platforms are notably shaping consumer habits in China?
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What payment method has become widely accepted for daily transactions in China?
What payment method has become widely accepted for daily transactions in China?
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What trend reflects the growing consumer awareness of health and wellness in China?
What trend reflects the growing consumer awareness of health and wellness in China?
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What is driving the rise of local brands among Chinese consumers?
What is driving the rise of local brands among Chinese consumers?
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Which trend emphasizes the importance of unique consumer experiences over products?
Which trend emphasizes the importance of unique consumer experiences over products?
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What factor has contributed to the rise of cross-border e-commerce among Chinese consumers?
What factor has contributed to the rise of cross-border e-commerce among Chinese consumers?
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What role do influencers have in shaping consumer preferences in China?
What role do influencers have in shaping consumer preferences in China?
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What is a significant characteristic of Chinese consumers in terms of brand loyalty?
What is a significant characteristic of Chinese consumers in terms of brand loyalty?
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Which type of products do Chinese consumers generally trust foreign brands more than local brands?
Which type of products do Chinese consumers generally trust foreign brands more than local brands?
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What is becoming increasingly influential in shaping purchasing decisions among Chinese consumers?
What is becoming increasingly influential in shaping purchasing decisions among Chinese consumers?
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What trend is projected to occur in urban consumption by 2030 in China?
What trend is projected to occur in urban consumption by 2030 in China?
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Which demographic is driving 45 percent of total household consumption in China?
Which demographic is driving 45 percent of total household consumption in China?
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How is the consumer landscape expected to change by 2025 regarding millionaires in China?
How is the consumer landscape expected to change by 2025 regarding millionaires in China?
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What factor is mentioned as a driver of consumer preference in China?
What factor is mentioned as a driver of consumer preference in China?
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What is the reported percentage of Chinese consumers who would choose international brand cosmetics over local brands?
What is the reported percentage of Chinese consumers who would choose international brand cosmetics over local brands?
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What is one significant advantage of WeChat mini-programs?
What is one significant advantage of WeChat mini-programs?
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What strategy did Lancôme employ to enhance customer loyalty on WeChat?
What strategy did Lancôme employ to enhance customer loyalty on WeChat?
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What is a common promotional tactic brands use on WeChat?
What is a common promotional tactic brands use on WeChat?
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What characterizes WeChat's advertising model?
What characterizes WeChat's advertising model?
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What does the abbreviation GMV stand for in the context of e-commerce?
What does the abbreviation GMV stand for in the context of e-commerce?
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Why might WeChat be considered inadequate for promoting products to Chinese consumers?
Why might WeChat be considered inadequate for promoting products to Chinese consumers?
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In what way did Lancôme’s marketing strategy on WeChat impact their sales?
In what way did Lancôme’s marketing strategy on WeChat impact their sales?
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What type of ads are included in WeChat's paid promotion options?
What type of ads are included in WeChat's paid promotion options?
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Study Notes
Chinese Consumer Behaviour
- Chinese consumer shopping habits have changed dramatically over the past three decades, driven by rising incomes and new products entering the market.
- Understanding target audience needs and preferences is crucial for effective marketing strategies, both online and offline.
- Consumer habits continue to evolve. Analyzing different consumer generations reveals key shopping trends.
Meet the China Buyer
- Treating China as a single market is nearly impossible despite efforts.
- Chinese culture is unified, mainly in language, architecture, and habits.
Consumer Demographics
- Average annual income: 36,400 RMB (4,720€)
- Significant income disparity exists across the country (e.g., 58,000 CNY in Shanghai vs. 16,000 CNY in Gansu).
- Market segments based on city tiers: Tier 1 (megacities like Shanghai, Beijing), Tier 2 (cities like Wuhan), and Tier 3 and 4 (smaller cities).
- Consumers are generally upbeat about their future income. High percentages reported expecting income increases in the next five years
Chinese Consumer Groups
- Frugal Retired: Born before 1965, grew up in difficult times, work/worked at state-owned enterprises. Frugal and sensitive to price changes.
- Wealthy Retired: Experienced difficulties but worked in high-wage government/government-funded enterprises. Less price-sensitive and value quality more than cost. Expect slight changes in spending (e.g., more on groceries).
- Fifties and Forties: Experienced the Cultural Revolution and early reform era. They swing between tradition and trends. Tend to save a significant portion of earnings for their children and parents.
- Thirties: Well-educated, grew up in an open environment, less inclined to save, higher spending on entertainment, and frequent online shoppers. Value quality and quality over cost
- Twenties: Have different shopping habits than their parents, less saving, higher spending on entertainment and trendy products, and use online shopping frequently.
- New Generation (under 20): Highly Westernized, open to new products, pursue individualism, heavily influence parents' purchasing choices despite not having a substantial income yet.
- Migrant Workers: Rural residents who moved to urban areas for jobs starting in the 1990s. Very frugal, buying only necessities and sending remittances to their families. Expecting to increase incomes and relocate their families to urban areas in the future.
- The Rich: Over 1 million Chinese individuals have assets above 1.5 million USD. Primarily reside in large cities like Beijing, Guangdong, and Shanghai. Successful entrepreneurs, top managers, and business owners with a focus on high-quality products, particularly imports.
Retail Channels
- E-commerce is booming but traditional shopping (malls, stand-alone stores) remains popular.
- Chinese consumers often visit physical stores before making online purchases.
- Online shoppers are also more likely to visit physical stores to see and experience goods before making a purchase.
Multichannel Shoppers
- Chinese consumers largely prefer multichannel shopping experiences.
- Online grocery delivery service usage is high in China compared to other countries.
- Social media and mobile apps are essential components of their ideal shopping experience.
Convenience Stores, Hypermarkets and Shopping Malls
- Convenience stores (7/11, Family Mart) are widespread, offering 24/7 service but often with higher prices and limited stock.
- Hypermarkets and shopping malls combine multiple retail elements like speciality stores and restaurants, creating a shopping destination for families, and drawing larger traffic on weekends.
- Luxury goods premium supermarkets can be found in major cities catering to the rising affluent class.
Supermarket
- Chinese focus on bargains in hypermarkets, but increasingly value quality and imported products in premium supermarkets.
- Premium supermarkets are opening near high-end office buildings and in central, affluent areas.
- Local retailers are also adopting a premium format.
Discounting and Gifting
- Small discounts are preferred as a large number of consumers, especially elderly shoppers, are keenly interested in minimizing expenditure.
- Retailers offer discounts on basic goods, seasonal and local products to encourage frequent visits.
- Promotions/gifts, such as free trolleys for certain minimum purchase values are common.
Pricing
- Higher prices generally indicate better quality/status. Foreign products priced below local ones might trigger suspicion about product quality.
- Premium pricing varies depending on product category and consumer group.
The Face (Key Concept)
- Chinese culture highly values face—dignity, honor, and pride. They’ll pay more to protect and preserve face.
- Packaging and presentation play a crucial role during Chinese New Year gift-giving.
- Consumers will prefer visually appealing, high-quality packaging even if there is no difference in the product quality.
E-Commerce
- China's internet penetration rate is very high.
- High internet penetration and fast adaptation of new technologies are significant advantages over other countries.
- The digital market is supported by the Chinese government's strategies for modernization and technological development.
- Mobile is dominant, with WeChat heavily used for almost all digital transactions.
- China accounts for a large portion of global e-commerce.
- Leading platforms in 2022 include Alibaba Group, PinDuoDuo, Xiaohongshu, and JD.com.
- Alibaba has established two main platforms for e-commerce.
Leading E-commerce Platforms
- Alibaba Group: supports both B2C and C2C transactions; has a large active user base; utilizes KOLs and social marketing.
- JD.com: offering direct sales for B2C and B2B transactions, a large market place for third-party vendors, and international cross-border services.
- PinDuoDuo: focuses on middle-aged consumers in Tier 3 and higher-tier cities; offers lower average order values. Focus on price
- Xiaohongshu: attracts mostly young female consumers living in Tier 1-2 cities. Known for its heavy use of KOLs and genuine product reviews
Social Network
- WeChat: the dominant social media platform.
- Users spend a significant amount of time on it, including many business accounts.
- Mini-programs offer a convenient way to do transactions, booking and shopping directly within the app.
- A micro-blogging platform similar to Twitter, with an open social media structure.
- Key elements are user-to-user communication, trends, and news dissemination.
- Strong presence for content creation and product marketing.
XiaoHongShu
- A social media platform used to share photos, videos, lifestyle experience.
- Has a large portion of female users, 80% and significant numbers of millennial users and users in higher-tier cities.
- Used for discovery, reviews, inspiration, and recommendations.
Douyin (TikTok)
- Largest short video platform in the world and in China.
- A large user base with high daily user activity, a large part of which consists of the younger demographic in China
- Users spend extensive time on the platform.
- Offers extensive opportunities for brands to reach their target audience.
Consumer Behaviour
- Chinese consumers are more frequently making purchases, particularly for fresh goods.
- Customer service expectations are different in China compared with the West.
- Chinese consumers remain relatively brand-agnostic, except in luxury goods/status symbols.
- Global and local brands coexist in the market.
- The market is shifting away from simply focused on popularity to consideration of value, personal preference, and quality.
- Consumption in China is trending towards premiumization.
Typical Consuming Behaviour
- Shift from mass market products to premium products/ experiences.
- Increase in demand for health-conscious options..
- Growing importance of environmental concerns (eco-friendly products).
- Trend towards experience-driven consumption.
Golden Rules for Selling to Chinese Consumers
- Product fit: Should satisfy customer requirements,
- Packaging: High quality
- Target selection and local agencies.
- Online platforms and usage of KOL
- Focus on key market trends (e.g., outdoor/tourism/organic)
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