Why The Chinese Gen-Z Demand For Local Brands Is Growing

What Happened: Recently, the Chinese lifestyle app RED launched its “2020 RED Yearly Beauty Insight Report,” which showed that the number of views on the app related to domestic brands increased by 66 percent over the first half of 2020, garnering the highest year-on-year growth amongst sectors globally. Emerging domestic brand Colorkey experienced the most explosive growth, seeing an 8,529-percent increase in viewership. Although Western beauty brands still dominate RED with the highest percentage of content views, they have fallen slightly from 63.2 to 62 percent during the period. Views of overseas brands from Japan, Korea, and Thailand have also dropped — from 31.4 to 30.2 percent.

The Jing Take: The primary demographic of RED are female Gen Zers under the age of 22. Meanwhile, the app has seen an increase in users from the third, fourth, and fifth-tier cities in China. Unlike the previous generation, young consumers raised with strong nationalistic sentiments have generally been more supportive of local brands, especially when their products are cheaper. In the post-COVID-19 era, students and young professionals with less spending power tend to favor reasonably-priced products. Moreover, domestic brands like Huaxizi, Maogeping, and Perfect Diary possess specific categories and functions that target Chinese beauty needs. What does this mean for mid-tier international brands? Those with successful localization strategies will be more likely to grow their presence on RED.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.