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How China’s Consumer Landscape is Evolving

In recent years China's middle class has gone from wanting the cheapest products, to the best value, to something much more sophisticated – here's what you need to know about China's consumer landscape now

by Robynne Tindall
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Female consumers

As China’s consumer landscape evolves, brands are being compelled to consider ethical practices, localised offerings, immersive experiences and a genuine commitment to community development, writes Tom Pattinson

China’s vast consumer market defies classification. And yet, amidst the mosaic of consumers divided by everything from geography to socio-economic status, one key group has more power than most – the 300 million-strong middle class, many of whom were born after the 1980s.

China’s rapid transformation over the last four decades has given rise to significant shifts in consumer behaviour. The journey began with a focus on cost, dictated by limited disposable income that led buyers to chase the lowest prices. The narrative then transitioned to prioritising value, with quality versus price considerations becoming central. Subsequently, luxury brands started to lure in consumers, becoming status symbols for the newly wealthy.

In the wake of these trends, a new class of savvy, conscientious consumers has emerged, especially in first-tier cities such as Beijing and Shanghai. These shoppers are driven by a desire for experiences and exclusivity and are adept at applying the knowledge they have gleaned from online research to find the best product at the best price.

launchpad CBBC

The lure of localised offerings

While international luxury labels continue to be popular with China’s burgeoning middle class, brands are now adapting their offerings to resonate with Chinese consumers on a deeper level and appeal to the trend of China Chic – or Guochao as it is known in Chinese. Many brands are incorporating Chinese icons or elements tied to traditional festivals or stories into their products. Moreover, limited-edition items crafted exclusively for the Chinese market are gaining traction too.

This localisation extends beyond the product to the experience. Brands must establish meaningful connections with their audience through well-chosen collaborations that have cultural resonance. For example, Diageo’s Johnny Walker Blue Label launched a Forbidden City Limited Edition bottle, while British fragrance house Creed partnered with Benzo, a rapper from Chengdu, to incorporate mention of their fragrance into his music.

The review revolution

The contemporary Chinese consumer is defined by their discernment, and their willingness to seek out the opinions of their peers. When prospective buyers first start looking for a product, their first instinct is to check opinions on platforms like Xiaohongshu and Douyin. These reviews, often from other customers with a similar socio-economic profile, play a pivotal role in shaping purchase decisions.

The significance of reviews extends across borders. A stroll down London’s Bond Street or a trip to Bicester Village reveals the same pattern among Chinese shoppers – they will not hesitate to share or seek out opinions. The digital landscape has given consumers the power to scrutinise not only a product’s quality and utility, but also the customer service and refund policies offered by brands. British brands should build awareness of these behaviours into their customer service ethos both in China and in the UK.

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Influencers become the architects of consumer choice

Influencers wield remarkable sway over consumer choices all over the world. In China, these opinion shapers come in various tiers. Key opinion leaders (KOLs) – usually existing celebrities (singers, actors) or influencers with a celebrity-sized following such as Li Jiaqi – are instrumental in raising product awareness among their expansive follower bases. Key opinion consumers (KOCs) cater to niche audiences, offering detailed reviews and insights. Key opinion sellers (KOSs) leverage their knowledge and influence to drive direct sales within specific demographics, often through more private spaces such as WeChat groups (limited to 500 people).

Beyond these tiers lies the average consumer, keen on sharing their purchases and experiences online. Thus, the customer journey becomes a blend of trusted reviews, peer endorsements, and celebrity influence, all of which can have an effect on a brand’s reputation and success.

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Experiential shopping is transforming the retail experience

In the face of online competition, today’s bricks-and-mortar shopping experiences must transcend transactional moments; they must deliver an immersive experience. This notion holds especially true in China, where architects are reimagining shopping malls to prioritise experiences over conventional retail spaces. Simon Mitchell from renowned architecture firm Sybarite explains how malls are transforming into hubs of art installations, public spaces, green zones, and socialising spots. This change is indicative of a larger shift from shops as mere storage spaces to showrooms.

Technology is completely intertwined with this experience, with virtual reality (VR) and augmented reality (AR) empowering consumers to make more informed choices. VR and AR tools facilitate personalised interactions, allowing customers to visualise products in their lives before purchasing. British brands such as Molton Brown and Burberry have already started leveraging digital platforms to craft bespoke experiences that seamlessly merge the online and offline worlds.

Conscious consumerism: The ethical imperative

One of the newer threads running through China’s middle-class consumption trends is the growing awareness of ethics and sustainability. Young Chinese consumers are no longer just buying products; they are investing in brands with sound ethical and environmental foundations. This change has prompted companies to integrate sustainability into more aspects of their operations. Consumers demand more than symbolic corporate responsibility; they seek authenticity, transparency and community engagement.

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Shaping the future of consumption

The story of China’s middle-class consumer is one of transformation, shaped by a rich tapestry of historical shifts, technological leaps and ethical considerations. This dynamic narrative continues to unfold, offering brands an unparalleled opportunity to be part of the journey that is shaping the future of consumerism in China and beyond.

As China’s consumer landscape evolves, brands are compelled to adapt or risk irrelevance. A symbiotic relationship between consumers and brands has emerged, where shared values and experiences define success. The road ahead demands ethical practices, localised offerings, immersive experiences, and a genuine commitment to community development.

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