How Brands Can Win Over China’s 149 Million Gen Z Consumers

Forty percent of Chinese consumers will fall into the Generation Z cohort by the year 2020, posing an opportunity for brands to tap into a young and trend-conscious class eager to consume.

China’s internet giant Tencent and Kantar, a consulting company, jointly produced a white paper report detailing their findings on China’s Gen Z.

This new target demographic will have birth dates ranging from 1995 to 2009 and will be one of the largest comparable demographic cohorts that brands will be able to target in the near future. Already, the global population of people born after 1997 makes up 35 percent of the world’s population. The power of these consumers will perhaps be most influential in China, where the generation is 149 million citizens strong and will account for an estimated 40 percent of global Gen Z purchases by 2020, according to the report.

How brands interact with this new generation of Chinese shoppers will play a large role in gaining market share over the coming years, according to Tencent and Kantar, and researchers have detailed a few ways brands can maximize their impact in the market.

At the forefront of the next generation of marketing is, of course, social media. Many consumers within China’s Gen Z, or centennials as they are sometimes called, were the only children within their nuclear families as a result of China’s one-child policy, which was rolled back in 2015. As such, they are especially prone to using social media as a method of socializing outside of the family and will often make purchases to further their online status in the eyes of their peers as a means of establishing an identity.

“The white paper found that 65 percent of centennials are eager to connect with their friends. And consumption — what have you bought? — has become a shortcut to get themselves into groups with similar interests,” researchers explained.

Another key area for brands to focus on is creating products and platforms that will appeal to a generation that values instant gratification. Half of China’s Gen Z agreed with the statement “I spend money to be happy and enjoy quality of life” in a survey of 3,500 Gen Z shoppers conducted by Kantar and Tencent researchers. The white paper concluded that these shoppers will likely make more purchases based on momentary happiness and satisfaction than their predecessors.

Product influencers, or key opinion leaders (KOLs), have become so popular in China that many shoppers now turn to social media shopping lists posted by their online idols to avoid the pressure of having to wade through the mass of markdowns and deals that inundate shopping platforms. Other than being an easier way to shop, this is often an expression of identity, another area researchers have identified as being important to brands when marketing to Gen Z in China.

The report notes that 26 percent of Chinese shoppers surveyed acknowledge buying products purely because their idols use the same item and that 23 percent have already purchased a “co-branded edition” product marketed by these influencers. Researchers also detailed the most common method that the demographic uses to shop for products, and unsurprisingly, it begins with exposure to the product through recommendations found through their social lives.

One of the ways brands can benefit from this behavior is to become known through pivotal “social touch points” like online platforms Qzone and WeChat.

“Compared with older generations, [centennials] are 1.5 times more likely to know a brand through a social touch point and eventually buy it,” researchers said. “More than 30 percent of centennials will do research of a brand/product to know more about it. They trust the information they obtained through their social interest groups, where there are a lot of active KOLs of specific areas.”

It is possible that brands outside of China will have nearly as much of a fighting chance to woo its Gen Z as native brands, especially in luxury, where a “trust gap” has created a marketplace where three of the top five luxury marketplaces in China are run by extranational companies.

Editor’s note: This story was reported by FN sister publication Sourcing Journal. For more, visit Sourcingjournal.com.

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