Today, an increasing number of foreign brands in China are beginning to recognize the power of China’s millennials in determining the future of their businesses, and major luxury players, such as Burberry, Cartier, and Gucci, among others, have all recently made bold efforts to attract this demographic. Chinese millennials matter to luxury brands because of their large population and massive purchasing power.
This demographic is made up of almost 415 million consumers, accounting for about 31 percent of the total population in China, according to a report published by Goldman Sachs in 2015. Their spending ability is expected to steadily increase thanks to the fact that the unique social and cultural setting in China exempts this market from the pressures their Western counterparts usually have, including purchasing property and repaying student loans.
To demystify the power of the millennial generation in China and around the globe in shaping the future of retail and media, more than 4,000 experts gathered at the “Millennial 20/20 Summit” March 1 and 2 in New York City . Many speakers whose expertise lies in helping foreign brands break into China markets shared their insights on this unique demographic. Here are four takeaways from their speeches on how to sell products to Chinese millennials.
1. Chinese millennials grew up in a rapidly changing economic and social environment.
The word “millennial” is not used as frequently in China as it is in the West. Instead, Chinese usually refer to the groups of people between 20 and 35 years old as “post-80s”, “post-90s”, or even “post-95s”. This demographic was born right after China opened up, kicking off economic reform in 1978. These generations have witnessed the dramatic transformation of the country from a closed and poor nation to now the world’s second largest economy that has both benefited and suffered from globalization and economic integration. Many panelists, thus, said that living and growing up in such a rapidly changing economic and social environment gives Chinese millennials a number of unique characteristics. Even though the emergence of digital technologies have a huge impact on their purchasing decisions and consumer behaviors, the innate economic and social factors that shape their values and consumption culture cannot go unnoticed.
2. Chinese millennials are the world’s most ultra-connected consumers.
Denise Sabet, the managing director at Labbrand, said at a session that she found “Chinese millennials want to be always online.” Indeed, young people are extremely adept at making use of fragmented time to be online. Ranging from the morning/evening commute, bathroom breaks, to pre-sleep, the majority of Chinese millennials spend a significant amount of time checking their mobile phones. This represents a need for them to stay connected with the world through the internet and social media, and brands should consider how they can gain millennials’ attention within such short and fragmented periods.
3. Chinese millennials participate in a unique commercial ecosystem that is dominated by e-commerce.
It is well known that nearly every digital product and service in the West, be it Facebook, Google, Airbnb, or Uber, has a counterpart in China. This has made it harder for foreign brands to do businesses in China, but that is not the only challenge. A speaker from Hot Pot Digital, a China digital marketing firm, noted that unlike in the U.S., e-commerce entirely defines the business ecosystem in China, as it almost appears in every step of the consumption process of Chinese millennials. The company estimates that China will represent about 60 percent of all global e-commerce transactions by 2020.
4. Chinese millennials are eager to be seen as global citizens.
Brands should not ignore the eagerness of Chinese millennials to show friends and families their close connection to the rest of the world. The relevance of this fact to foreign brands is that young Chinese people are now increasingly enthusiastic about knowing and buying standout and niche brands that can demonstrate their one-of-a-kind tastes and distinguish them from others. Sabet from Labbrand said “educating Chinese millennials is still an important part for foreign brands that hope to succeed in China.”