For years, fashion industry experts and marketers have shoved Chinese consumers into broad demographics of age, gender, location, and income in an attempt to understand spending habits within the highly lucrative Chinese market. But this approach has often led international brands to target indistinct groups of consumers in an unproductive way.
In the retail world, brands often categorize consumers by age, targeting millennial and Gen-Z consumers by way of their favorite online bloggers and influencers. Others target different genders. For example, beauty brands like Lancôme and La Mer have recently reached out specifically to male Chinese consumers. Alternatively, many international businesses still use the ever-popular “tiered” cities approach, where brands predict Chinese consumer behavior based on the “level” of the city in which they reside.
However, as Euromonitor International’s new report states: “Few would agree that consumers are neatly defined by age, gender or income.” The market research provider Euromonitor International argues its time to redefine Chinese consumers according to their “personality types” and suggests five new, distinct consumer categories.
“Relying on established demographic targeting means relying on third-party assessment and applying it to whatever you are selling, which is not enough,” said CEO of Chinese marketing consultancy Emerging Communications, Domenica Di Lieto. Some in the business agree with Di Lieto and see the potential effectiveness of Euromonitor’s new personality categories. “I think this is a really interesting way to look at Chinese consumers,” said founder at Chinese Marketing Agency ChoZan, Ashley Galina Dudarenok. “It definitely adds a bit more sexiness and a bit more color into the consumer profile. As soon as you hear the personality type, you instantly have a certain image in mind of what these people want, where they are, how they live, and so on.”
Jing Daily took a look at each of the Euromonitor Survey team’s five new personas. Will this new way of defining consumers will help luxury brands achieve the success they’re looking for in China?
1. The Secure Traditionalist
This consumer avoids shopping for strongly branded products and prefers saving money over defining themselves through labels. According to the survey, this personality type accounts for the largest slice of the Chinese market–approximately 27 percent. However, for the luxury sector, this demographic could be one of the hardest types to address, since they’re the least likely to use mobile apps for e-commerce (preferring personal connections with the brands they purchase). There’s not a lot of time to make an impression on these shoppers. About why understanding these shoppers in great detail could be the key to success with them, Di Lieto said, “When you are dealing with important people you have to talk with them on their terms first time, and there are very few second chances.”
2. The Inspired Adventurer
The Inspired Adventurer likes trying new services and traveling overseas to do so. This could be a fruitful category for innovative brands looking to promote unique products or luxury travel companies that want to break into the Chinese market. “There’s definitely a growing class of people like this in China, but it’s still important for brands to recognize that all of these people are very different,” said Dudarenok to Jing Daily. “They are different ages and in different places. …I think for adventurers, Nike is a great example of a brand doing a good job. They are targeting these like-minded people with experiential marketing and new in-store retail experiences. However, they are still primarily targeting first and second-tier cities. For third- and fourth-tier cities, they are moving at a different pace and sending out different messages to portray a slightly alternative image.”
3. The Undaunted Striver
This shopper, who gets his/her name from their desire for branded purchases, luxury, and the latest tech gadgets. “The pinnacle of tailoring the sales proposition to these shoppers is to design products based on an acute understanding of what consumers want—their motivations and buying triggers—plus taking into account key influencers, and the sales and supply chain,” Di Lieto said. For the image-conscious Undaunted Striver, the use of key influencers might be a particularly useful strategy for brands, and their tech-savvy nature could enable brands to reach them on an extremely personalized level.
Categories only go so far. “Personas are a great starting point for Western brands in developing their China strategy [but], work with platforms like Tencent and WeChat enables us to create detailed personas and provide personalization at scale,” said Client Services Director at Qumin digital agency, Tom Nixon.
4. The Balanced Optimist
These consumers value healthy living and wellbeing, but “remain tech-savvy and reliant on their mobile phones not only for communication but to make their lives easier and enable their lifestyle choices,” according to the report.
Despite the opportunity this segment presents to brands, some still find it dangerous to categorize consumers in this way. “China is a very complicated, very saturated, very non-homogeneous market,” said Dudarenok. “For example, Balanced Optimists in Beijing or Fuzhou are completely different target groups. …This might work for some generalizations, but for many brands, it will remain challenging.”
5. The Cautious Planner
These consumers are careful with their money, and they are the only personality type that prefers to make purchases using traditional methods. And yet, despite the fact that Cautions Planners account for only 13 percent of the overall market, niche luxury brands that lean heavily on heritage and history could do well to target these consumers. For London’s Harrods department store, the combination of heritage and exclusivity has made sales to Chinese shoppers soar past those to British nationals. “Sometimes it is far more effective to focus on a smaller, high-value core audience that you know will respond well, than to opt for a broad-brush approach that generates large appeal, but ultimately fails to generate much response,” said Di Lieto.
Going forward, any information that encourages fashion houses or luxury brands who want to do more business in China to think beyond both cultural stereotypes and well-worn demographic analysis is probably information worth having.