As a Western marketer, it’s natural to focus on pockets of growth in the vast (and rapidly maturing) Chinese market. Generation Z is an extremely hot prospect; making up 15% of China’s population and possessing high levels of disposable income, with a propensity to spend! In common with their Western counterparts, Chinese Gen Z customers were born roughly between 1996-2010. However, beyond the age bracket, they have a number of distinctly different needs, wants and desires which must be carefully understood for marketing success.
Do you know enough to confidently market to Chinese Gen Z customers? Let’s take a closer look at some of their traits:
1. Chinese Gen Z grew up during China’s legendary period of economic expansion and as such, they have witnessed huge improvements to their living standards. They are also the first true generation of digital natives.
2. Research by McKinsey [1] shows that they are impulsive, optimistic and often tend to overspend – buying ‘on the go’ and when the urge takes them.
3. Chinese Gen Z customers call themselves the ‘moonlight clan‘ because they tend to live from paycheck to paycheck and spend what they earn within the lunar month. Saving is not yet high on their agenda, and many are comfortable with debt – perhaps because of their healthy earning expectations.
4. They are more loyal than their Millennial predecessors, and more so than their counterparts from other countries. Once engaged, almost half are prepared to be loyal to a brand.
Takeaways for Western marketers
Products
Chinese Gen Z customers love customised products, tailored products and anything which allows them to add their personalised or ‘unique’ stamp – think custom blends, formulations or options to personalise engraving or printing, for example. This generation also shows specific signs of wanting to prioritise health and wellbeing, particularly after Covid, and they are also ready to engage with digital services for fitness, learning and so forth. From travel to health products, there is plenty of opportunity for savvy Western marketers who can offer high-quality, reputable and desirable products through an enticing, exciting brand.
Price
McKinsey found that there was insufficient evidence to show whether Gen Z customers in China were prepared to pay a premium for the customised products that they love. This is important for Western brands and their pricing strategies; especially for those considering more expensive customisation options to fulfil the ‘uniqueness’ criteria.
Place
It’s all about omnichannel marketing for this generation! China’s Gen Z customers are highly likely to browse for clothing in-store and then buy it online, for example. This group in China still value the offline experience, especially for products such as clothing and makeup, where they like to browse physical products and experience them before making a purchase decision. In fact, a number of online-only apparel brands have already opened physical storefronts to meet these needs.
This generation also loves e-commerce platforms and tends to favour individual merchants on them, where they enjoy high degrees of trust and transparency. Quality assurance is key here.
Promotion
Social media is the key to success here. Successful brands in China are leveraging social platforms to engage with their Gen Z customers and using features such as WeChat mini-programs to offer value-add features, such as exclusive bookings and promotions, online events, mobile games and other loyalty-building services.
People
This generation still looks for personal recommendations – but they look to the online world to find reviews. Gen Z customers will go onto sites such as Tmall, RED and Taobao to look for product reviews and get the opinions of family and friends on social media before making a purchase decision – especially for a big-ticket item such as luxury goods, online education or holiday bookings. Official branded social media accounts are also very important to this age group, along with KOLs and bloggers.
Interestingly, offline opinions from friends and family are waning in importance for Chinese Gen Z – although they will still look for guidance via social media.
Key actions for Western marketers
1. Invest in quality customer research and develop a data-driven marketing approach to deeply understand your target group of Chinese Gen Z customers, and develop your branded offer accordingly. The more you can understand their consumption patterns, brand expectations and shopping pain points, the better you can target your marketing.
2. Tailor your brand and proposition to your target segment of Chinese Gen Z customers specifically – rather than being tempted to map over any approach you currently have with Western Gen Z markets.
3. Focus on online and offline channels alike to meet those omnichannel needs – looking at routes such as partnering and focusing heavily on social media platforms for messaging. Key platforms include WeChat, Weibo, Douyin and RED for consistent digital marketing campaigns, as well as Tmall and JD.com for eCommerce. (Even luxury brands such as Chanel use Tmall for online sales.) Your own website must be extremely smooth and seamless to use via smartphones and designed to be as slick and as fast as possible, with immediate integration to eCommerce and social media functionality for this busy generation of high-expectation digital natives.
4. Use the right KOLs – look for influencers that have congruent brand values, and the ability to connect with your target audience in an effective way. This doesn’t necessarily mean looking for mega influencers – so-called ‘micro-influencer’ networks can also be very powerful, and also cost-effective for brands.
5. Be mindful that data protection and quality issues are very important to Gen Z. Be upfront and transparent about how you manage both aspects and explain how you handle processes such as customer data and privacy, product quality, returns and customer service to build trust.
Source
[1] China consumer report 2021 – Understanding Chinese Consumers: Growth Engine of the World, McKinsey