When it comes to social currency, most Chinese consumers aim to buy a house and a car to impress their peers. But for those under 30, values are shifting, and digital products and social attention are becoming more important, according to a new report.
The report, called Future of China, compiled by communications agency OMD China, looked at how consumers across four generations viewed happiness, success, and luxury. It found that only 14 percent of the respondents listed “trendy digital products,” such as smartphones, smart watches, and other wearables, as their most important status symbol. But as many might expect, there’s a catch when it comes to age—more consumers under 30 reported owning a digital product as being one of the most important status symbols, along with social attention and physical appearance, suggesting brands will have to shift their marketing strategies to appeal to new standards of what it means to be rich in China.
An example of a brand already doing this is Apple. When releasing their smart watch in China, Apple made the effort to focus on meeting the demands of wealthy consumers by partnering with top luxury brands like Hermès to boost its status as a high-end brand, and as Exane BNP Paribas put it last September, put a “‘cool’ spin on what was so far a ‘geek’ product.”
However, the most important takeaway from the report suggests that it’s not as simple as just owning a trendy digital product alone. Actual overall experiences are particularly critical for “social currency,” much like they are in the West, according to the report, which surveyed more than 2,500 people across four city tiers. “Unique experiences already fuel social media—travel videos, parties, selfies, live broadcasts” because it brings young people the social attention they seek.
While social attention is important for less than 10 percent of consumers overall, it was a concern for more people under 30 (11.3 percent), who want their experiences to make them stand out. For example, the report says, “last year at Burning Man—an alternative culture festival in Nevada, USA—a Chinese billionaire complained that there were too many people there for her to post any unique content on WeChat.”
What does this mean for brands seeking to successfully reach out to consumers in China born in the 1980s and ’90s?
“For brands to succeed, they need to give consumers unique, ‘show-off’ experiences,” the report says. “Whether it is learning from experts at the L’Ecole Van Cleef & Arpels on how to sketch designs, identify gemstones, polish gold or set a stone, or traveling to South America to see vicuna and production of highest quality cashmere, luxury experiences are becoming the new status for the wealthy in China. With an evolving perspective of what denotes wealth, brands need to find more ways to make consumers feel ‘rich.’”
But it’s worth noting that for consumers across age groups, digital products remain minor factors when it comes to show of wealth, especially compared to luxury cars and houses. The digital category trails just behind expensive jewelry as prominent symbols of wealth. Only 20 percent of respondents see jewelry as being most prominent status symbols, suggesting traditional luxury brands are going to have to work extra hard to find ways to engage with young Chinese consumers.