Gen Z consumers — born between 1997 and 2012 — are undeniably the torchbearers of future consumption trends, but among them, Chinese Gen Z stands out as the vanguard of economic prowess.
"Chinese Gen Z consumers are the most affluent generation in history, and their spending power is only going to grow in the coming years,” Shaun Rein, founder and CEO of China Market Research Group, tells The Current. “Marketers and brands who want to succeed in China need to understand their unique needs and preferences and develop strategies to reach them effectively."
Gen Z, also known as Zoomers in China, have the fastest spending growth out of any generation in the country, with spending expected to quadruple to 16 trillion yuan ($2.4 trillion USD) by 2035. To capitalize on this opportunity, global brands need to understand the distinctions that set Chinese Gen Z consumers apart from their peers in other regions. Key characteristics — such as shopping trends, how and where to reach them, and cultural influences — may help businesses engage this customer set early on and establish long-term affinity for their brand.
Strategies to reach the one of the wealthiest consumers in history
Much like members of Gen Z from other parts of the globe, establishing authentic connections with Chinese Gen Z consumers is important, and, according to industry experts, could be achieved through active engagement on their preferred social media platforms and the creation of culturally resonant campaigns. And given their ever-evolving preferences, staying adaptable and informed about Chinese consumer trends is equally important.
“[Marketers] should not ‘sell’ but rather focus on sharable experiences to achieve resonance with Gen Z,” says Sharon Ho, managing director of Digitas China. “This is a very dynamic group, so a personalized end-to-end journey approach from brand to performance media is required.”
She adds that at Digitas China, colleagues use data, insights, and creative cross-channel executions, to segment Gen Z into personas to reach them even more precisely.
Jocelyn Tse, chief strategy officer at IPG Mediabrands’ UM China, explains that with advanced data and technology solutions in China now, everything the agency does is algorithm-based. That includes connecting a specific demographic group such as Gen Z with related psychographic and behavioral signals.
“At the same time, we supplement it with a more granular bottom-up approach by diving deep into their different habitats, to understand changing patterns on a target base and behaviors in each platform or ecosystem,” she says.
The evolving digital landscape of Chinese Gen Z consumers
While many Gen Z consumers in the Western world spend their time scrolling the likes of TikTok, Snapchat, and Instagram, according to Ho, many Chinese Gen Z are dedicating their time on ByteDance’s-owned, Douyin, [TikTok's mainland Chinese counterpart] or Little Red Book, which also has the slogan ‘Finding stuff overseas’.
“In terms of content consumption and entertainment, Chinese Gen Z turn to more ‘decentralized’ platforms [away from traditional tech giants like Baidu and Alibaba] such as Little Red Book for beauty, video live-streaming service Douyu, and gaming platform Huya for eSports live-streaming,” says Tse.
Little Red Book, [referred to in China as Xiaohongshu] is a social lifestyle platform that allows users to share short video and photo reviews about fashion, beauty, food, and travel. Compared to other e-commerce platforms’ live-streaming reviews, Little Red Book boasts a higher sale price, higher repeat purchase rate, and lower refund rates. In addition, Little Red Book is seen as a more trustworthy source of information for Chinese youngsters than traditional advertising, according to Daxue Consulting. It’s a great place for smaller and lesser-known brands to build brand awareness.
As specialty apps become more popular, people's preferences are changing based on the specific needs that these apps meet. For instance, fashion enthusiasts may lean towards DeWu, a luxury streetwear commerce platform, while dedicated fitness enthusiasts might opt for daily use of KEEP, a fitness and training platform, explains Tse.
“This shift in patterns of media consumption is a good illustration of how the already very rich and diversified Chinese digital media landscape has become even more fragmented,” she adds.
The rise of the ‘Guochao’ trend in post-pandemic China
In a post-pandemic world, Chinese consumers seem to be turning inward, embracing their national identity and demanding high-quality products made in China. This trend, known as Guochao, which translates to “national trend” — or can be more eloquently translated as 'China chic' — is driven by young people who want to see their culture and traditions reflected in the consumer goods they buy, particularly luxury goods. And the evolving nature of Guochao also means foreign brands who know about this have more opportunities to reach Chinese Gen Z consumers.
For example, western luxury brands like Dior, Louis Vuitton, and Chanel established a presence on platforms like Little Red Book. Meanwhile, Adidas collaborates with Chinese celebrities, such as Jackson Yee and Angelababy, to design exclusive collections that combine celebrity influence with Chinese cultural elements.
Hanyu Liu, project manager at Daxue Consulting China elucidates a common misconception prevalent among businesses venturing into the Chinese market. They often assume the strategies that have proven successful in their home countries will yield similar results in China. If they do not add a cultural significance to their products, then they won’t attract China’s Gen Z.
“This isn’t just Western brands, but even domestic brands that have taken massive investments to keep up with the ever-changing habits of China’s Gen Z and adding that cultural significance [to their products],” he says.