Millennials Without Borders: Consumer Values Merge in the U.S. and China

A version of this article originally appeared in TechCrunch. Marketers may need to geo-locate for one-off campaigns, but as technology adoption influences our daily routines, forward-thinking entrepreneurs and investors can look to how generations across geographies are more similar than different for new opportunities. Take millennials in China and the United States. If you want insight into Chinese millennials, you’re better off looking to their American peers than their Chinese parents. This wasn’t always the case: a Chinese person in their 60s grew up listening to and worshiping Chairman Mao, while an American did the same for the Beatles. Even 40 years down the road, those two consumers are a world apart in values. But given the rapid pace of China’s social and technological transformation, generation gaps are growing wider while national divides are shrinking. For Chinese and American millennials — digital natives raised on the internet — cultural currents, and more importantly consumer values, are converging across continents. Understanding the values of this massive consumer group — 200 million people in China ages 18-34, and nearly 80 million in the U.S., all moving into their prime spending years — will be key for startups building brands for the coming decade. Converging consumer values Chinese millennials are sampling global lifestyles, learning to ignore big-name brands and buying products based on friend recommendations and curation apps. New indie brands meet this demand head-on by bundling products with new experiences. All of these trends have corollaries in their American peers, and hold enormous implications for consumer brands around the globe. This doesn’t mean that products and platforms can be directly transplanted from one market to the next. Each country has specific logistical traits — payment systems, population density, mobile versus desktop, delivery networks, rival offline options — that lead to different commercial channels for these values. Investors hunting for consumer-facing unicorns need both a firm grasp on these values and the ability to map them onto country-specific consumption habits. Chinese youth are not giving over to wholesale “westernization,” but they are sampling a diverse palette of global lifestyles. The key value — one shared by Chinese and American millennials — is the desire for new experiences. Many of the most successful international brands in China are those offering Chinese millennials an experience that contributes to a public identity creation — from something as seemingly mundane as sipping a latte at Starbucks, to participation in the global cultural zeitgeist through a Hollywood blockbuster. While conspicuous consumption of foreign luxury brands dominated the narrative for older Chinese, millennials are instead looking abroad for lifestyle and travel. International travel is becoming the new conspicuous consumption, with photos of unique destinations beamed out through WeChat and other social media. Millennials make up 40 percent of all outbound travel from China, and offer a growing sales channel and conduit for cultural cache in Chinese markets. Companies that seize on this outbound and experience-based-shopping trend — whether they be Airbnb or other international lifestyle companies — stand to cash in as millennials come of age around the globe. The new brand loyalty For millennials in the U.S. and China, the boom in e-commerce is also redefining brand loyalty. In the past, brands served a twin-signaling purpose: they acted as a consumer-facing signal of product quality and a peer-facing signal of status. But for millennial consumers, product quality is often communicated through recommendations or reviews, and social status is increasingly communicated as a public expression of individuality. Taken together, this means “brand loyalty” is no longer necessarily to the product itself, but rather to the app or company that curated that product offering. Startups targeting millennials in the U.S. and China must be either unique in their curation of products or embody values that help millennials project their individuality. Unique curation could be united around an ultra-low price point or by the recommendation of key opinion leaders. For value-based companies, the challenge is to become a vehicle by which millennials project their own individual values — body-affirming feminism, environmental consciousness, etc. — outwards toward their peers. With either approach, the old equation of “brand-recognition equals quality equals willingness-to-pay” will fade away as millennials take center stage around the globe. The next great consumption story Converging values across U.S. and Chinese millennials are important, but just as crucial are differences in consumption logistics. That’s because the next great consumption story likely won’t be coming out of the U.S. or other developed countries. It will come out of dense, urban, lower middle-income markets like Indonesia, India or parts of the Middle East and Africa. The consumer values manifested in these countries may parallel the U.S. and China, but specific consumption patterns and habits will grow out of the practical logistical conditions. Geographies that are mobile-first, population-dense and lack world-class offline options are ripe for e-commerce to take root quickly. China’s early internet giants often transplanted business models pioneered in the U.S. and localized them for China’s dense mobile-first cities. Startups in emerging markets will likely be looking to Chinese companies for similar inspiration. China’s crowded cities, with low-cost labor, omnipresent mobile payments and lack of offline options, have been a rich laboratory for e-commerce in the new on-demand service economy. The resulting business models that have grown organically will be key to cracking markets in India, Southeast Asia, Africa and beyond. For entrepreneurs and investors looking to jump into high-growth markets, one needs both an eye on both the global e-commerce lab and converging millennial values.

Millennials Without Borders: Consumer Values Merge in the U.S. and China

How Bottega Veneta weaved China’s forever it bag

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Millennials Without Borders: Consumer Values Merge in the U.S. and China

How Bottega Veneta weaved China’s forever it bag