Top 5 China marketing lessons from October 2024
Here is a review of the top 5 China marketing trends and lessons for October 2024.
Stimulus is Bolstering an Improving Consumer Sentiment.
Image by Kaja Sariwating on Unsplash
One of the largest drags on China’s GDP growth is Chinese consumer sentiment. Whilst some segments and geographies remain relatively upbeat, the overall sentiment has been historically low in China. However, the late September “bazooka” stimulus package to stoke the economy which included help for the property industry and stock market, cash handouts for parents and the poor, and more government spending seems to be having a positive effect.
State media reported that China’s home sales rose during the National Day holiday and the property market has a massive impact on how prosperous Chinese consumers are feeling, thus a stabilised sector can only be positive. Servicing mortgages will be cheaper, freeing up money for other things. Trillions more yuan circulating around is likely to create more opportunities, and with it more optimism.
The most tangible impact so far is the pop in stock prices. The rise and fall of stock prices have had limited impact on Chinese consumer spending historically, although that may change. Chinese consumers have built most of their wealth from real estate which, until recently, has mostly appreciated unabated. Whilst the stim measures may stabilise real estate prices, most Chinese now understand that Beijing sees houses for living, not for speculation.
The unreliability of China’s stock market has kept many Chinese middle class from investing into shares. But with property no longer a sure bet, they will be looking for alternative forms to drive their wealth. The 25% growth of the stocks will already have a segment of consumers feeling wealthier, and the general feelings around the stimulus measures are likely to push sentiment up, having flow on effects for the real economy.
With retail sales in September up 3.2% from the previous year, new iPhone 16 sales up 20% on their 2023 model and Alibaba’s vice-president Liu Bo saying, “this year’s … Chinese consumer sentiment is improving”, there are many reasons to be optimistic about the Chinese market right now.
What does this mean for your brand?
Competition to increase. With consumer confidence returning that also means that many brands will be fighting to take advantage.
The market will change. Consumer behaviour has changed markedly since COVID, thus a return of consumer confidence does not necessarily mean a return of spending based on the pre-COVID paradigm.
To make sure your brand takes full advantage follow us here, or contact us for tailored marketing insights.
Community marketing is even more relevant in China than other markets.
Too many brands define their target audience using only traditional demographics, such as age and life stage, gender or income. They often overlook their tribe – the unofficial community that influences their purchase decisions and advocacy more than any.
Many community-focused initiatives in China aim to reach these tribes by tapping into the digital savviness of Chinese consumers, and focus on building communities online. Yet the most effective brands usually also incorporate physical touch points to connect, engage and grow groups.
For example, Seesaw Coffee identifies cultural activities as an important pastime for their target audience. It has doubled down by hosting physical events such as gallery and museum strolls, supported by a good old fashioned printed newspaper. Patagonia takes a similar approach, connecting their target audience by hosting events for people who like the outdoors.
Incorporating physical events with online touch points is vital for community-focused initiatives. Nike provides a good example building running communities through physical and digital events, coupled with style guidance, workout plans and the latest sports technology, all though its digital accounts. Lululemon’s standout 34% growth in Q2 was largely driven by its nurturing of communities through online and offline initiatives.
Too many brands spend the majority of their marketing budgets on expensive KOLs and livestreamers. Whilst these can raise awareness and encourage trial, they typically bring transactional sugar hits, with few benefits beyond a short-term spike in revenue – often with low margins as many KOLs demand a discount to promote your wares.
There is a place for this type of marketing, but redirecting some of this expenditure to community-based initiatives can build authentic engagement with your brand over the longer term. Your target audience will be more prepared to buy your goods and services without a heavy discount and expensive advertising. They will also be much more likely to become grassroots advocates, and with it, deliver some of the most compelling and cost-effective marketing that you could wish for!
What does this mean for your brand?
Audit your social media plan. These are the key platforms through which you appeal to Chinese consumers. Simply start by asking yourself how you target communities right now.
Download our Community Marketing Whitepaper to learn a little more about the approach in China, and
Contact China Skinny to learn how to put it to practice in a way that aligns with your target audience and brand ethos.
Outbound travel is up, take advantage!
Light show and drone performance in Suzhou Xiangmen City Wall. Image: Xiaohongshu @提笔书几行
October’s Golden Week holiday saw travel numbers hit record levels with domestic travel spots receiving 765 million visits over the week long holiday, up 5.9% on the previous year. Chinese social media was inundated with selfies from China’s 40 cultural world heritage sites, neo-Chinese night tours, autumn shades on the Tibetan Plateau, the dramatic landscapes of Zhangjiajie and Guilin, the newly-popular Datong of Wukong fame, and under-the-radar spots from around the globe. Spending over this period rose by 6.3% year on year while visits were up 10.2% from pre-COVID 2019.
Outbound tourism also experienced a surge with outbound travel bookings and holiday packages growing by more than 50% and 40%, respectively on Fliggy. The proportion of family travel also increased from 34% to 37%, and the average spending on parent-child trips was more than twice the overall average. Residents of fourth and fifth-tier cities have become new growth points for outbound travel, with daily outbound travel bookings during the holiday up by 100% and 300% year-on-year. Alipay reported that overseas transactions in the first four days of the holiday increased 60% on last year, with spending up 120%.
A start amongst all of this is Egypt which saw a 65% surge in Chinese tourists in 2024 with growing appeal particularly from Gen Z, attributed to the rising popularity of the “desertcore” fashion aesthetic, drawing inspiration from sci-fi films like Dune.
Photo ops are a huge part of the appeal, particularly for the younger generation. They use apps like RED (Xiaohongshu) to share their experience and have the power to transform low key locations into hotspots for Chinese tourists. For instance, in Copenhagen, instead of heading straight to the Little Mermaid statue or the Tivoli Gardens amusement park, Chinese visitors are flocking to Black Square, a public space at the Superkilen Urban Park in the quiet residential neighbourhood of Norrebro where bright white magnetic-field-esque lines have been painted on the ground.
What does this mean for your brand?
Get on RED (Xiaohongshu) and leverage the photo op. Getting exposure even with small sliver of this lucrative market will have a big impact, but you have to make it photo-op-worthy. It could be as simple as asking a Chinese tourist what they’d take a photo of and leveraging that online.
Make spending accessible. Chinese consumers like to spend using Alipay and WeChat pay, while their cards are usually Union Pay. Travellers are clearly willing to spend, but they won’t if it’s not convenient.
Leverage your cultural heritage. Chinese consumers are all about the photo op but that is not to the exclusion of genuine cultural curiosity. Old or new, it doesn’t matter. What matters is you have a unique story to tell that they can’t find at home.
Consumers want their minds to be excited and at peace simultaneously.
Image: Xiaohongshu @momo酱 @薄荷
As the Chinese consumer market continues to mature and evolve, consumers have moved beyond covering their basic needs and are looking for emotional excitement as well as care.
With the hustle and bustle of modern life it was only a matter of time before topics like mental health and burnout began to circulate, however they are still haunted by a far amount of stigma. The Shanghai Mental Health Center is looking to combat this by holding in-house exhibitions and engaging in various brand collaborations designed to encourage people to acknowledge the reality of mental health.
Young people are also turning to yoga, meditation and scripture copying as a means of relaxation and mental care. Scripture copying, once a niche activity associated with tedious childhood calligraphy lessons, is now claiming its place as part of a holistic wellness practice, promoting inner peace as well as physical wellbeing.
Many brands are tapping into the emotional value their experiences bring, realizing that young consumers are looking for more than just an object. Jellycat CAFÉ for example has taken Shanghai by storm with its limited-time pop-up. Exclusive plush toys and immersive packaging performances highlight Jellycat's unique blend of emotional value and playful creativity.
Chinese consumers are also splurging on blind boxes and trendy collectible toys whereby the joy of opening blind boxes does not come from the toy inside but in the moment you tear open the box — the thrill and anticipation that depends solely on luck, and the uncertainty of whether you will get the toy you want or the rare edition. A blind box brings joy without breaking the bank.
Similarly, the wild Yunnan mushroom "Jian Shou Qing" went viral over summer precisely because it elicits a parallel sense of thrill. Despite its toxicity when undercooked, it's become a social media sensation and a trendy ingredient/flavour where the thrill and novelty, rather than taste, drive its popularity.
What does this mean for your brand?
Emotional care is in demand. Chinese consumers understand the importance of looking after themselves and that includes making sure they are happy and healthy in their mental space.
Consumers are demanding experiences that excite their imagination. How can your brand create a sense of thrill or wonder when delivering your product or service?
Get in touch with us to see how we can help you understand and reach out to the ever-evolving Chinese consumer.
Seniors are increasingly defining their own market.
China’s senior segment is one the most anticipated demographics in the world, yet remains one of the least-tapped by foreign brands. Many readers will be familiar with the sheer scale of what is to come: China’s 297 million over-60s are expected to grow to more than half a billion by 2050. A push for large families during the Mao Era has driven this, in addition to life expectancy increasing from 46.6 in 1950 to 77.5 nowadays.
Until recently, foreign brands struggled to connect with this demographic given their reliance on traditional media like state-run TV, radio, and newspapers. But Covid changed their media consumption, forcing many silver surfers online. Most have stayed. Historically frugal, they are now beginning to loosen the purse strings.
The elderly are becoming confident online; researching, participating on online forums and even following elderly influencers to learn about brands. Another key shift is in the traditional setup of elderly parents living with their kids under one roof. Whilst half of Chinese elderly lived with younger family members in 2010, just 40% did in 2021. Living apart and being online is increasing China’s seniors’ independence and – in addition to changing their customer journeys – is influencing which products and services they are buying; their function, packaging, format and user experience needs. This is creating opportunities through shifting preferences across many industries including health, personal care, food & beverage and even tourism.
What does this mean for your brand?
If you’re not thinking ahead, you should be. The post-80s consumers are prone to import purchases but some of that loyalty may fade as the age if brands don’t go with them.
Meet the elderly online. As with normal community marketing, the elderly in China also have their ‘tribes’ and ‘hangouts’, but you need to find the space that would be most welcoming to your brand.
Just as brands need a different playbook to be successful in China than other markets, within China, reaching the increasingly lucrative elderly segment requires a different strategy than reaching Gen-Zers. Contact China Skinny to learn how to best connect with China’s increasingly lucrative senior segment, and other demographics too.
