Understanding the Chinese Consumer Behavior
When you think of the technological and economic revolutions in the world, one country that pops up in the mind is China. The hugely populated state boasts of some of the most lucrative opportunities for global businesses, irrespective of the type of industry. This is why businesses aim to understand the way Chinese consumer thinks and buys.
These shopping habits directly affect the way these consumers purchase products—a key point businesses should be focusing on if they want to take advantage of the opportunities awaiting them in the Chinese market. If you are a business aiming to step into China, all you need is a thorough knowledge about the Chinese consumer behavior as well as the support of a reliable translation agency for delivering you expert Chinese translation services.
Let’s take a look at the way Chinese consumer behaves and thinks when it comes to their shopping habits.
The Chinese Consumer Groups
Ever since China opened its doors to the outside world with its reform policies in 1978, global businesses have been able to step into this highly lucrative market for business establishments and growth. Perhaps this entrance by big companies has led to structural changes in the economy as a whole, affecting the Chinese consumer buying habits and preferences. However, it must be noted that not all Chinese think alike when buying a product—their preferences vary according to their ages, buying power, income and life stages. We categorize the Chinese consumers into 3 distinct groups for a closer look at the way their shopping habits vary:
1. The Lost Generation: Born Before 1960s
Termed as the ‘lost generation’, this group comprises of the people born before 1960s who had to face the tougher side of life. Growing up in times of political and social unrests, these consumers are further divided into frugal retired and wealthy retired. As the name suggests, the frugal retired Chinese worked primarily in state-owned enterprises and did not have the privilege of getting a standard education.
This is the reason this group is more sensitive to price changes and is ready to forego quality over convenience. In contrast, the wealthy retired individuals worked in government-owned enterprises, had a standard education and are therefore, less sensitive to price changes as well as prefer quality over cost.
2. The Post-revolution Generation: Born Between 1965-1980
Born after the revolutions, this group consists of members who grew up at the start of reform era. Having seen both the times before and after the reforms, this generation fluctuate between modern and traditional buying habits. Those having a greater disposable income are willing to spend on premium products and are conscious of the product quality. On the other hand, they are also aware of the need to save money and do not spend frivolously.
3. The Millennials: Born Between 1985 and 1994
The millennials are the most lucrative segment of the population, and the main target of companies. Born after 1985 and during the ‘one-child’ policy in China, these consumers have a tendency to spend extra money on products and have a relaxed outlook on life. Not surprisingly, they prefer luxury goods as well as high-quality products.
Key Features of Chinese Consumer Behavior
To understand the mind of the Chinese consumers, it is important to take a closer look at some of the key features that affect the way Chinese consumer shops. As the disposable incomes of these consumer rise along with an improvement in the standard of living, the past trends of consumer buying are shifting slowly. According to an estimate, 3.5% of Chinese households had an annual income of $3,800 in 1997. That figure has grown to 12% in 5 years’ time only—an indication of the better standard of living.
Feature #1: Product Innovation and Focus on Quality
With the improvement in the standard of living comes the shift in consumer’s preferences. The Chinese consumer is increasingly focusing on high-quality products and services, and has his eye on the brands delivering this high quality. According to an estimate, China is the largest market for luxury brands that account for approximately 47% of global sales of these luxury items. Chinese consumer will gladly pay for premium products and luxury items for maintaining a social status in society. Additionally, customized products are in greater demand and more Chinese are focusing on buying customized goods for a more personalized experience.
Feature #2: Growth of Online Shopping and E-commerce Stores
Ever since the internet revolution took place and companies jumped on the bandwagon of online stores, the retail landscape has changed dramatically. Brands in China, especially the luxury and high-end ones are focusing on delivering goods and services through online channels. In fact, China is the world’s largest E-commerce market with a revenue generation of approximately $615 billion.
This has also given rise to omnichannel retail and shopping that ensures customers can shop both online and offline as well. About 95% of Chinese consumers are categorized as omnichannel shoppers who love to try online shopping experience before opting for physical shopping.
Feature #3: the Growth of Social Media Channels and Online Retailing
The Chinese consumer is a modern and tech-savvy individual with an ample knowledge about the internet and the vast opportunities it offers. With the rise in popularity of social media, E-commerce stores and online brands are strengthening as well, but that has given rise to impulsive buying behavior among the Chinese consumer. In order to cater to the demands of these tech-savvy Chinese, WeChat offers one-step buying options for a quick shopping as well as pop-up notifications for new products and sales.
Other strategies that brands are working on and Chinese consumers are embracing are the use of KOL (Key Opinion Leaders) and social media influencers who have a huge number of fan following and use this to endorse brands. Nevertheless, this trend of social media is likely to bring more Chinese consumers into the online shopping world for a convenient and quick shopping experience.
The Last Word
China is the hub of economic and business growth and the Chinese consumer is more informed, social and practical individual. Regardless of the age groups, these Chinese consumers are more aware and informed about the many opportunities that internet and the rising E-commerce world has to offer. Nevertheless, if you are a business wanting to take your business to these Chinese consumers, you will need an awareness about the Chinese consumer behavior along with having the support of an agency which can deliver you comprehensive Chinese translation services for a seamless entry into the Chinese market.