Decoding Five Trends of Consumers in China
In 2021, the total retail sales of social consumer goods in China exceeded 44 trillion RMB, and consumption became the first driving force for economic growth again. Although affected by the epidemic, the total retail sales of social consumer goods declined to some extent from January to April this year, but the long-term positive fundamentals of China’s consumer market have not changed.
In the past 10 years, Accenture has continuously followed and paid attention to the development of China’s consumer market. Recently, we conducted a special study on more than 10,000 consumers (across age, income and education) in 91 cities in China.
The survey found that people’s sense of internal conflict has intensified, their sense of anxiety has increased, and their values and consumption concepts have changed significantly. On the one hand, struggle is still the main theme of life, and family, health and career are the three major centers of gravity; On the other hand, the overall concept of consumers in China has been enhanced, and the focus has shifted from immediate satisfaction to long-term value, and the thinking dimension has become more diverse.
Five major trends of consumers in China
Ten years ago, Accenture established the China Consumer Insight Research Project, and advocated to study the China consumer market from four dimensions: urbanization, intergenerational population, technological evolution and social values. Today, we still adhere to a multi-dimensional perspective, understand the changes in people’s lifestyles and consumption behaviors, and explore the internal causes and future trends of the changes. Accenture 2022 China Consumer Insight takes five main trends as the breakthrough point, and analyzes the multiple value demands of China consumers.
01 My economy: me, and us.
With the popularization of smart devices and the deepening and diversified development of e-commerce platforms, the original collective family decision-making began to be dismantled, and the decision-making power of family consumption returned to individuals, especially the consumption awareness of young people and elderly people was gradually released. Consumers’ "self-awareness" is becoming more and more distinct, and non-essential consumption has become the main type of expenditure and a way for people to shape their personal style. In shopping decision-making, people pay more attention to their own internal needs than external eyes and evaluations.
However, this does not mean that consumers in China have become egoists, and the needs of family members still play an important role in consumption decision-making. When the budget is limited, nearly 70% of consumers "give priority to what their families need or like". Therefore, in China’s consumer market, products and services that can give consideration to individual needs and family responsibilities are more favored by people in large-scale consumption (such as automobiles and household appliances).
02 New Rationalism: "Comparative" Economy
Under the impact of the epidemic, people’s consumption concept has become more restrained and pragmatic. This Accenture survey shows that more than 90% of the respondents disapprove of the "moonlight clan", which is 30% higher than five years ago. Nearly 80% of the respondents "will often use most of the goods they buy", an increase of nearly 20% over five years ago.
At the same time, consumers pay more and more attention to the essence of goods, compare and study in many ways, and regard the selection process as an important part of the consumption experience. For example, in the China market where all kinds of beauty products gather, the self-proclaimed "component party" has sprung up, and the safety and efficacy of skin care have become the focus of rational consumers. Nearly 40% of the respondents said that "even if I have a favorite brand, I will often compare multiple brands".
03 Master of Time: You should struggle and have leisure.
With the improvement of living standards and the increase of optional services, people gradually begin to pursue the balance between work and life, pay more attention to the value of time, and are willing to pay for convenience. Consumers who hold this view have increased by 7 percentage points compared with five years ago, and the higher their income, the stronger their willingness. This has also promoted the continuous penetration of online channels and the vigorous development of new channels. More than 40% of the respondents have increased the frequency of online shopping in the past year, and more than 90% of the respondents have tried at least one new channel.
"Cloud" consumption provides more leisure time, but at the same time, due to the long return period of investment in the service industry and the impact of the epidemic situation, enterprises have returned to a conservative wait-and-see state, and the "leisure consumption" scene provided by the market is far from enough, with huge room for development.
K11 Shopping Art Center relies on the combination of business and art to attract consumers to go out of their homes, and achieved contrarian growth in 2020 when the passenger flow generally declined. It has created a unique cultural retail model, taking art, humanities and nature as the core, and building the shopping center into a place integrating leisure, entertainment and social interaction. Art exhibitions and various art performances empower consumers to gain a unique sensory experience after shopping. All kinds of art installations enter the lens and become the material for consumers to punch cards and bask in circles, which is in line with people’s preference for creating social "personal settings". The close integration of scene-based experience and commercial services has contributed to the emergence of consumer behavior.
People’s demand for cultural enjoyment and growth experience is also increasing year by year. Compared with five years ago, the number of respondents who plan to increase their investment in personal education has increased by 11 percentage points, and the number of respondents who plan to increase their investment in sports and fitness has increased by 7 percentage points. The retail industry also contains opportunities. If the brand can provide consumers with a relaxing and rewarding experience through product and service innovation, it can not only increase consumer contacts and gain growth, but also provide emotional value for consumers and win long-term loyalty.
DJI starts with consumer drones, allowing users to get rich shooting experience with the support of special equipment and software. The product teaching module on DJI fly app enables users of different foundations to give full play to their creativity. Rich creative templates allow users to shoot and cut with each other and quickly produce films; Powerful orbital editing helps precise editing, and there are more music libraries and special effects to add color to creation. After completing the aerial photography, users can also upload directly to the aerial photography community, exchange and share with more friends, and grow together.
04 Symbiosis with Technology: Technology with Temperature
Consumers in China have a strong desire to try new things and a more positive attitude towards digital technology. From smart phones to smart homes, smart products have penetrated into people’s daily lives comprehensively and deeply. The extension of staying at home during the epidemic period undoubtedly further gave birth to the demand of consumers to improve their living environment.
However, with the normalization of intelligent life, people began to reflect more on the role of technology after the novelty faded. For example, when "mobile phone dependence" spreads to the elderly and teenagers, people pay more and more attention to physical and mental health; More than 70% of the respondents hope to reduce the use time of mobile phones, which is nearly 20% higher than five years ago.
In addition, consumers’ worries about personal privacy and business advertising are also worthy of attention. According to this Accenture survey, 70% of the respondents are willing to share personal data for better service, but 50% of the respondents think that the push frequency is too high, and about 20% think that the push content is completely irrelevant to themselves.
05 Sustainable prosperity: environmental protection moves towards "national participation"
More and more consumers in China are aware of the importance of sustainable development and are willing to pay energy and money for environmental protection. According to this Accenture survey, 43% of the respondents are willing to pay a premium for environmental protection products, and the higher their income level, the stronger their willingness to pay for environmental protection characteristics. Sales of environmental protection and energy-saving products increased rapidly.
In addition, 83% of the respondents in China agreed that "the whole society, including organizations and individuals, should start to change in a sustainable direction". Consumers in China hope to have more ways to make efforts for energy conservation and emission reduction together with more subjects. For example, in consumption, people will pay more attention to the social image, values and corporate mission of brands and businesses.
Midea advocates integrating the concept of environmental protection into the whole life cycle of product design, production, use and waste recycling, speeding up the upgrading of energy management ability in the production process through digital technology, and promoting green manufacturing in the whole industry chain. Anta, a sports brand, has achieved efficient regeneration from waste plastic bottles to polyester fibers through research and innovation, and its comprehensive cost has been reduced by 30%-50% compared with international brands.
Provide multi-dimensional value and release consumption potential
In China, the rudiment of a mature consumer society has emerged. Enterprises need to take people’s needs as the core, think about the mission value of enterprises from a more macro perspective, gain insight into consumers’ inner desires, continue to innovate, and adapt to the changing needs of consumers. Only in this way can we cultivate long-term and tenacious consumer relations, enhance consumers’ confidence in enterprises and brands, and win long-term and high-quality development.
Mission driven
Think about the mission value of enterprises from a more macro perspective, and formulate strategies and implementation plans with a responsible attitude. For example, adhere to the people-oriented technology application, reduce the negative impact of business activities on the environment, help achieve common prosperity, and so on.
Continuous innovation
Insight into people’s inner desires and quickly adapt to consumers’ changing preferences and dynamic market environment. Learn from consumers efficiently and continuously, so that experience innovation can be integrated into enterprise genes. The real culture of experience innovation requires enterprises not only to change their own ideas, but also to innovate the behavior of the whole enterprise, thus narrowing the gap between brand promise and the actual delivery experience.
Multidimensional value
Focus on helping people solve their immediate problems, so as to make people’s lives (including consumers, employees, suppliers, and the wider social groups) better. Cultivate long-term and tough consumer relations and enhance consumers’ confidence in enterprises and brands.
Based on the five trends of consumer research in China, we have prepared thinking questions for enterprises to see if your organization is ready to understand and respond to the changing needs of consumers in China.
