How Chinese retail brands are catering to millennials

While China is rapidly shifting to a cashless and digital society, it is increasingly important for international food and drink brands in China to understand the digital marketing landscape and use a variety of marketing tools to better convey their messages to their target customers, writes Ran Guo

On 24 and 25 October 2019, CBBC member companies and their distributors, including China Skinny, Walkers Shortbread, Jacobs Well and FEAST, participated in the Food & Beverage Digital Marketing Summit. As a part of this, CBBC organised a roundtable discussion: “Spotlight on the UK: Tradition and Innovation of British Food & Drink Brands.” During the two-day summit, some interesting new trends were remarked upon. A few are outlined below.

Lower-tier cities and small-town youths

As first-tier cities become over-saturated with imported brands, many domestic and international food and drink brands are looking towards lower-tier cities, in particular the vast third and fourth tiers. According to Alimama, a digital marketing agency, over the last 12 months on Tmall the purchase volumes generated by the lower-tier cities have surpassed those from the first and second-tier cities in 77 percent of categories.

However, even within first-tier cities, things are changing. In Beijing, 59 percent of its GDP is now contributed by areas outside its fifth ring road, which is traditionally considered the outskirt of the city. Compared to their counterparts in the first and second-tier cities, “small-town youths” have much more leisure time to spend on the Internet and on shopping. Their purchasing decisions are largely influenced by their families and friends, and ultimately, by their social networks. This provides the opportunity for brands to market to them through social media. These young people are however also less likely to be loyal to a certain brand. They normally do not pay a lot of attention to brand identity and care more about product functionality.

How to capture the hearts of millennials?

Like millennials in other parts of the world, China’s millennials behave quite differently from the generations before them and expect to be treated differently as well. Both domestic and international brands in China wish to win their hearts, as they are also potential future customers. During the summit, millennial researchers from Neteast shared their opinions on how to gain millennial loyalty.

It’s important that adverts targeting millennials in China are easily shareable, they said. The adverts should carry a topic that people can readily discuss with friends on social media since millennials can become huge fans of certain products that help them define who they are on the Internet.

Creating an offline scenario for millennials to socialise with their friends can also be another effective way to interact with them. An example of this is Sprite’s offline hot pot pop-up store in Sanlitun Beijing in October 2018. This had quickly become a landmark at Sanlitun for young consumers to visit and post pictures online.

Other key points on marketing to Chinese consumers in the current age include product innovation for niche markets, utilising social networks, cross-sector campaigns, and the deployment of KOLs.