Brand marketers should consider generational differences as they relate to customer expectations and spending patterns in China.
It is estimated that approximately 80% of the Chinese population is millennials and Gen-Z (between the ages of 21 and 35).
This group of sophisticated consumers represents the biggest market in China, and they are affluent and eager to buy western brands’ fun, innovative and high-quality products.
Millennial and Gen-Z consumer characteristics in China
- Within a generation, China’s economy and society have transformed completely, and affluent and disloyal young customers generation Z are becoming increasingly difficult to attract!
- According to surveys, Generation Z customers do not have a strong loyalty to particular brands and are willing to switch to competitors when it comes to shopping, marketing, and branding.
- Marketing campaigns that promote brand loyalty and retention have huge implications for Western brands.
- It is true, however, that this trend has been emerging in China (and in other Western countries) for a while now.
- Millennials are also less loyal to brands than their parents’ generation, with a third stating that they are fickle customers.
- An increase in online shopping and the influence of KOLs have driven this trend. Brands no longer control their own narrative and customers spend less time in brand-owned stores and other spaces.
- More information is available to Chinese customers than ever before, and Chinese consumers carry out extensive research before buying products and services.
- If there is an incentive to win new customers, a fresh trend, or a compelling KOL recommendation, they can easily switch to a competitor at a click.
Why are young Chinese customers so loyal to Western brands?
As brands tend to ‘do what they always do’, but with a higher level of focus, vigour, and spending, there is a temptation to simply ‘do what they always did. Brand loyalty cannot be maintained in China through price cuts, large advertisements, or product innovation.
It is more important for brands to focus on their own brands. In order to be successful, you need to:
- Build a brand that is socially responsible and sustainable
- A personalized approach demonstrates customer loyalty – and rewards it.
Here are some details to consider.
1. Brand purpose
Innovating by delivering better value or offering quirky product features is simply not enough for Western brands today. A more effective approach would be to develop their brand’s meaning, purpose, and value.
As a result, younger Chinese customers will be more likely to build a genuine and long-lasting relationship with your brand.
Environmental issues, sustainability, and social good are important to millennials and Gen Z. Taking positive steps in these areas is something your brand should care about as well.
2. Loyalty
Chinese Millennials and Gen-Z are loyal to brands with loyalty programs, so Western brands should be aware of this.
- High-quality rewards schemes and loyalty programs should remain the focus of retention marketing. The offer must be substantive and meaningful for it to be successful.
- A true community and genuine perks are what make this possible.
- Members could be rewarded regularly, receive birthday messages from the brand, and receive personalized offers, for example.
- Loyalty should also be defined carefully by Western brands. There is more to this than simply repeat purchases in China.
- Loyalty to a brand is about having an emotional connection to it, being positive about it, and being dedicated to it.
- An integrated digital strategy will help you stay top of mind with your target customers.
Integrated digital strategy to gain Chinese consumers loyalty
You might, for example,
- Make sure your Chinese Millennials and Gen Z audiences are seeing your online ads.
- Make sure you tap into the KOLs that your young target audience listens to and values.
- Through your loyalty program and private online communities, reward your members with relevant content (for example, explainer content, tips, and ‘how-to’ articles authored by popular KOLs).
- Engage a community of users who share positive experiences and feelings about your brand through your social media marketing.
- Make sure your brand is centered around your values and purpose. Provide content that promotes positive emotion, societal benefit, community gain, and wellbeing to the community. These customers are very concerned about public good and the environment.
- Your network of customers can benefit from added-value services. You may be able to choose services such as gift registration, consultation, or installation, special gift-wrapping, delivery, and referrals. Creativity is key!
- You can take advantage of live streams, digital stickers, Facebook shoutouts, personalized emails, contests, and user testing with your branded social media feeds.
- Utilize preorder lists, sample giveaways, livestream launches, special events, and customization to build anticipation.
Experience from beginning to end
Authenticity and consistency are also important to savvy young Chinese customers.
This knowledge is being tapped by many brands to create added-value campaigns and pop-up events. During the Beijing pop-up cafe, Moleskine encouraged its creative community to work and pursue creative pursuits in a flexible space.
Yoga and fitness classes are also integrated into the retail spaces of other brands, such as Lululemon, which also hosts workshops and socializing areas.
Several high-end brands are focusing on quality, authenticity, and community in their products and services, which are enhancing young customers’ lifestyles and making their brands go-to destinations.
A social media strategy at its core
The above brands are creating an entirely new form of shopper engagement called ‘fan-sumer’, which revolves around clout and culture alongside a brand’s products and services.
They want to co-create brand experiences through social media, which has made them more powerful than ever before.
Millennials and Generation Z will be more loyal to western brands that leverage their social platforms effectively.
It is essential to listen to customers and communicate with them, implementing ‘ultra-engagement’ strategies through private and valuable communities that increase brand value and make the brand more relevant than ever before.
Western marketers certainly face a tough challenge, but it can be hugely rewarding. There is indeed a lot to play for for China’s growing number of affluent Gen Z customers!
Bonus Tip:
Your Western brand can succeed in Chinese marketing if you partner with Market Me China. Our integrated digital marketing strategies will appeal to Gen Z and Millennial customers. If you have any questions or would like to discuss your needs, please do not hesitate to contact us.