Gen Z in China contributed 40% of the country's consumption, even they just comprise less than 20% of China's population, indicating their significant potential and purchasing power in dominating the consumer market. It is predicted that by 2035, their overall consumption scale will increase fourfold to reach 16 trillion yuan, highlighting their importance as a key driver of the consumer market growth.
Through observation, this customer segment favours internet-based activities, prioritises convenience, indulges in self-rewarding consumption, pays attention to health consciousness, and shows support for national products. This article will provide an in-depth analysis of the five most crucial trends within this segment.
Keeping Up with Influencers
Chinese Gen Z has grown up in the era of the internet and is highly proficient in the use of smartphones and digital devices. In fact, these devices have become central to many regular activities, including managing routines and seeking shopping advice. According to Statista's 2023 report, as of June 2022, there were around 342 million monthly active internet users among Gen Z in China.
When purchasing products, Chinese Gen Z tends to research and compare items on their smartphones, especially for apparel, personal accessories, and travel. Influencers play a critical role in this research process, with livestreams, drama videos, reviews, and celebrity endorsements serving as powerful tools. Various shopping and consumer decision apps, such as RED, harness the influence of KOLs and KOCs to promote products using tactics such as product recommendation, unboxing videos, and product try-ons. Over two-thirds of Gen Z consumers stated that they purchased endorsed products because they wanted to follow the same style as the influencers. On the other hand, an increasing number of Chinese Gen Z individuals are taking on the role of influencers, viewing it as a career or a hobby that allows them to express themselves and socialise with others.
Comfort and Convenience in the Home
Chinese Gen Z has grown up in a digital era and has grown accustomed to the convenience that it provides across all aspects of their lives. China's unique market environment, characterised by high levels of digital device ownership, a vast array of service and product providers, a sophisticated mobile payment system, and a desire among customers for a simplified lifestyle, has allowed consumers to pursue a more streamlined existence.
In this environment, Chinese Gen Z can and are able to be lazy, staying at home for whole day while enjoy all the comfort and convenience in the home. In terms of food and groceries, consumers can order through mobile apps and have them delivered directly to their doorstep. For medical services, appointments can be made online via medical service apps and consultations with doctors can be conducted through the same platform. For household services, users can order housekeeping, pedicure, and maintenance services through mobile apps, with specialists dispatched to their residences. Even errands can be handled through mobile apps, with delivery staff available to purchase food, pick up laundry, and perform other tasks on behalf of the user.
Interest-based consumption
Over the last few years, the term “self-rewarding economy” (also known as “single-person” economy) has been on the rise across China. For China’s Gen Z especially, “self-rewarding” means investing in their interests through a variety of new ways, such as enjoying a relaxing holiday (alone or with company), parenting a pet, building self-care and ritualistic beauty routines, trying new technology, purchasing playful “blind boxes,” and enrolling in education and practical courses.
As a result, we see a growing interest in interest-based consumption and businesses that cater to the needs of singles. Blind boxes have become a popular example of this trend, with brands like Pop Mart capitalising on the excitement of opening unknown sets and exchanging collectibles with others. The blind box market in China has surged from 0.4 billion yuan in 2017 to 15.5 billion yuan in 2022. Pets have also become popular companions in the single economy, with China's urban pet market reaching 270.6 billion yuan in 2022, a significant increase from the previous year. Approximately 20% of pet owners in China are Gen Z. These Gen Z pet owners are willing to pay premium for their pets to be stylish, well-fed, and have access to smart products and their own furniture.
Health and wellness
The younger generation can work for long hours – sometimes as much as 60 to 70 hours each week. To unwind, many play games or socialise online, with screen time stretching until late evening. In addition, if they’re not at their computers, they may be out partying late, yet they are still expected to be at their desks feeling fresh again the next day. They are also the first generations that speak loud about the importance of mental health, considering it to be as crucial as physical health.
To maintain good health, Gen Z pays close attention to both their diet and exercise regimen. They consume functional snacks that address concerns like mental health, skin issues, and weight management. Popular products include collagen gummies, vitamin candies, and probiotic milk pills. They even humorously refer to themselves as "Punk Health," incorporating unconventional practices like infusing goji berries into Coca-Cola. Additionally, they prioritise physical activity with camping, skiing, frisbee, skateboarding, and night cycling being their top choices.
Guochao
Guochao, which translates to "national trend," refers to the phenomenon of Chinese consumers embracing national pride and demonstrating a preference for domestic brands or brands that demonstrate respect for Chinese culture. According to Xinhuanet, Gen Z consumers are particularly interested in Guochao, with a focus on clothing, anime, technology, cosmetics, vehicles, and movies.
Li-Ning, one of China's leading domestic sportswear brands, has successfully combined Chinese elements with global fashion trends and was showcased at Western fashion events, establishing as an iconic label in China. It is worth noting that this trend encompasses not only domestic brands, but also international brands that incorporate Chinese cultural elements into their designs. For instance, during the Chinese New Year, numerous brands released products featuring Chinese zodiac signs, such as Nike's shoes, Estée Lauder's lipsticks, and Coca-Cola's coke. Additionally, Loewe's 2023 early spring design, which was inspired by China's monochrome glaze, was well received by Chinese customers.
Given their growing consumption power and unique preferences, Generation Z represents a critical consumer segment for brands looking to succeed in China's ever-evolving market. If you're interested in learning more about China's Gen Z and how your brand can better engage with this demographic, don't hesitate to reach out to us today.