Top 5 China marketing lessons from December 2024
Here is a review of the top 5 China marketing trends and lessons for December 2024.
Lesson 1: Consumption Recovers, yet Splinters.
Consumers browse secondhand luxury products in shopping mall in Shanghai (Oct). Image by Wang Gang for China Daily
China's retail landscape remains dynamic, with fast-moving consumer goods (FMCG) growing 5% in Q3 2024. This growth is fuelled by a 14.3% surge in online channels and a 0.7% recovery in offline sales. Beverages led the market with 8.7% growth, while ambient food, paper products, and personal care products, including pet care and home care, also showed strong year-on-year sales increases. Grocery stores, especially those offering fresh products, saw a 4.7% rise in the first three quarters, and emerging channels like snack shops, membership stores, and dining venues demonstrate robust vitality.
Price sensitivity among consumers has driven interest in second-hand luxury items, especially as buyers seek value and stability during uncertain times. These consumers are remaining value-focused which tends to benefit domestic Chinese brands. For higher-income households earning over ¥600k annually, travel remains a top spending priority. In contrast, lower-income households tend to focus on saving or investing surplus income over discretionary spending.
Shanghai stands out as a leader in retail innovation, with its transformation into an international consumption hub driving remarkable growth. The city’s retail sales jumped 12.5% in 2023, outpacing the national average of 7.2%. In 2024, nearly 1,000 stores opened, with over 16% being inaugural stores for major brands in China. Shanghai’s global appeal is underscored by the strong presence of overseas brands, which comprised over half of those showcased at Shanghai Fashion Week.
Implications for Brands:
Define Your Target: Spending may be on the rise but not for all consumers, nor all categories, thus defining one’s target consumer is a priority for any brand looking for success in China’s ever-evolving market.
Omni-Channel Approach Vital: Invest in omnichannel strategies, leveraging online growth while enhancing offline proximity experiences.
Big Cities Entry Points: Big cities like Shanghai are key launchpads for innovative products, benefiting from its status as a consumption hub.
Lesson 2: Travel Aspirations Driving Plans.
Chinese tourists in Thailand, a long-time favourite destination. Image: ScandAsia
Travel is a constant theme as the market for outbound travel continues to grow and evolve. It has become a cornerstone of aspirations for Chinese consumers, driven by rising purchasing power and relaxed visa requirements. The number of outbound Chinese travellers is projected to grow from 101 million in 2023 to 130 million in 2024, with the trend set to continue. Destinations such as Singapore, Cuba, and Azerbaijan now offer visa-free entry to Chinese citizens, while lesser-travelled locales like Georgia, Morocco, and Guatemala are also seeing a surge in Chinese visitors.
Despite this growth, only 10% of Chinese citizens currently hold valid passports, compared to 41% in Germany and 82% in Britain, highlighting the immense untapped potential in the market. For higher-income households (annual income >¥600k), travel is the top priority for discretionary spending, underscoring its status as a luxury and lifestyle aspiration.
Gen Z, in particular, is redefining the travel landscape. Nearly three-quarters of Chinese Gen Z professionals see international travel as a key motivator for earning. This generation prefers personalised, social, and eco-conscious travel experiences over traditional group tours. Their priorities include cultural immersion, outdoor adventures, and unique activities, often spending generously to create memorable holiday experiences. While memorable experiences are the priority, don’t forget they also need their photo op, with social media posts driving many travel decisions.
Implications for Brands:
Leverage Aspirations. Travel is aspirational and a top priority for those with the means. How can your brand leverage this desire for exploration?
Lean into Unique Experiences. Travel is all about the experience, as is the trend in many FMCG categories. What experience does your brand offer?
Leverage Tourists to Grow Presence. With Chinese tourists increasing in numbers, more consumers will be exposed to your brand abroad. How can you leverage outbound tourism to grow your presence or awareness in China?
Lesson 3: Thriving Beverages in China.
New concept offline boutique set up in Nanjing, China. Image: Nespresso Weibo
China’s beverage market is evolving rapidly, marked by growing consumer preferences for coffee, wellness drinks, and innovative options. Beverages led FMCG growth in Q3 2024, expanding by 8.7% and capturing a significant share of consumer spending.
Coffee culture is booming, with an increasing emphasis on at-home and workplace consumption. The capsule coffee market grew by 14% last year, as 93% of consumers favored larger cups (200ml+). Brands like Nespresso are meeting these preferences, opening 10+ new stores this year alone and planning further expansion in southern and western regions. They have also partnered with hotels, executive suites, and Sam’s Club pop-ups, showcasing a multifaceted growth strategy.
Health and wellness trends are equally influential. Terms like “Lazy Sleeping Beauty” and “Adult Milk Tea” are resonating with health-conscious consumers seeking anti-ageing, nourishment, and anxiety-reduction benefits. Drinks featuring vitamins and nutritional blends are growing in popularity, reflecting a mounting desire for balance and self-care.
Dining and drinking out remain key indulgences, with consumers identifying these as priority spending areas if incomes rise. This aligns with the market’s shift toward experiential and lifestyle-oriented beverage consumption. Wine is the paradox that has experienced a boom and bust in recent years, largely driven by oversupply and poor quality wine flooding the market, however wine brands are finding a new lease of life on social media platforms like Xiaohongshu / RED.
Implications for Brands:
Innovate with Wellness Trends: Develop culturally relevant, health-oriented beverages, such as vitamin-enriched drinks or functional teas.
Expand Access Points: Invest in omnichannel distribution, including retail stores, e-commerce, and hospitality partnerships, to reach consumers in diverse settings.
Adapt to Regional Preferences: Tailor products and marketing to regional tastes, leveraging the coffee trend in urban centers and wellness-focused options across broader demographics.
Lesson 4: The Rise of Chinese Elements in Branding.
Liu Wen opened Chanel’s Métiers d’Art 2024-25 Hangzhou show. Image: AP
Chinese cultural elements are becoming a pivotal force in the market, driven by a growing confidence in local brands and the nation’s rich heritage. This trend was prominently displayed at the recent China International Import Expo (CIIE), where global brands integrated Chinese culture into their exhibits. IKEA’s stand revolved around The Peach Blossom Spring, an ancient fable symbolizing an idyllic world. Muji repurposed wood from its Chinese stores to create installations inspired by traditional designs. Lego incorporated Chinese antiquities into its displays, and LVMH featured a dramatic golden dragon at its entrance, embracing the symbolism of prosperity and power.
Luxury brands are also riding this wave. Chanel’s lavish 2024 showcase on Hangzhou’s iconic West Lake combined opulence with cultural reverence. The event honoured Chinese fashion traditions with a floating stage and liveried barges, capturing the essence of local heritage while seamlessly merging it with Chanel’s signature elegance. More than half of the audience comprised top-spending Chinese clients, underscoring the importance of cultural alignment in engaging discerning consumers.
This resurgence in cultural pride has shifted consumer preferences toward products and experiences that reflect their identity, making cultural relevance a critical factor for brands. Leaning into Chinese culture can however be fraught with danger lest you be accused of cultural appropriation, yet renewed importance and pride in Chinese culture has also resulted in brands being more aware and sensitive, and consumers being less cynical about cultural appropriation.
Implications for Brands:
Incorporate Cultural Symbols: Consumers appreciate products that are localised and that includes brands that make an effort to include cultural motifs in a tasteful way. How can your brand adhere itself to Chinese culture?
Embrace Local Collaboration: Partner with Chinese artists or designers to create unique offerings tailored to the market.
Celebrate Chinese Heritage: Host culturally significant events and exhibitions that resonate with local traditions, fostering deeper connections with consumers.
Lesson 5: Online Censorship Remains a Constant Challenge.
Uniqlo store in China. Image: Getty Images via BBC
China’s stringent online censorship policies continue to influence the digital landscape, presenting unique challenges for brands and influencers. A recent example is gymnast Wu Liufang, whose social media account was suspended for provocative dance clips. After the ban was lifted, she gained 3.5 million followers in a single day, highlighting the rapid shifts in visibility and public opinion driven by censorship.
Brands are not immune to these dynamics. Uniqlo faced backlash following remarks by its CEO that the company does not use cotton from Xinjiang, a politically sensitive region. This echoes the controversies faced by Western brands like H&M, Nike, and Adidas in 2021, which suffered significant reputational and financial fallout in China over similar issues. The Chinese government’s ongoing scrutiny of foreign brands, including an investigation into PVH (parent company of Calvin Klein and Tommy Hilfiger), underscores the high stakes of operating in this market.
Even domestic content creators face tightening restrictions as new guidelines target CEO romance micro-dramas, barring depictions of materialism, flaunting of wealth, or glorification of power. Such regulations reflect broader efforts by the government to align media narratives with societal values, placing additional constraints on creative expression.
For brands, navigating China’s complex online ecosystem requires vigilance both of the social media zeitgeist as well as the government’s vision for its society.
Implications for Brands:
Stay Politically Neutral: Avoid commenting on sensitive topics to minimize backlash and regulatory scrutiny.
Stay Up To Date with Regulations: Operating in China requires awareness of the current regulatory expectations, to make sure you don’t invite the ire of the government or netizens.
Monitor Online Trends Closely: Stay informed of shifts in public opinion and government policies to proactively manage potential controversies.
