When thinking of China many often think that China is one big uniform piece and that one strategy is enough for the whole market. Whereas in reality China has many markets varying according to the regions. Consumption habits are different across regions and ethnic groups. However consumption habits tend to be the same in large cities and in the new Chinese middle class.
The individual’s will to conform to the standards and rules of the group they belong to is probably due to China’s omnipresent collectivist society. Moreover social recognition and the oh-so-important principle of “face” are factors that tend to explain consumption choices and habits.
1st tiers Chinese cities: Consumption habits?
Spoiler Alert: we will be writing generalizations based on consumption trends. Obviously, It does not mean that everyone thinks or consumers in the same way. However, China being such a huge and fragmented market, it is not too hard to see varying trends by looking at differents cities’ population habits.
Shanghai: International vibes
Shanghai is the biggest city and the main Chinese port, it is also China’s economic center. The population is one of the most diverse in the country, moreover, the city often hosts national and international events such as China International Import Expo or the World Travel Fair. People living in Shanghai tend to prefer lesser-known brands such as Celine or Loewe instead of big brands known internationally such as the likes of Louis Vuitton, Chanel, or Gucci, but it’s important to note that the aforementioned brands are still very popular in the city.
Added to that, a more healthy lifestyle and athleisure type of clothing is preferred this is particularly true among young Chinese consumers. Shopping tendency tends to be more online than offline and orders are generally placed using a telephone.
eCommerce leading consumption in Beijing?
Beijing is the capital city of China. It is also the cultural center, educational center, and transportation center of China, in this city the population is a little older than in Shanghai. Beijing is not only the capital city of China but also the country’s political, economic, and cultural center. As people’s spending is increasingly shifting from product consumption to service consumption and from basic consumption to development-type consumption, the role of cars and houses in propelling consumption growth is weakening. It appears that Beijing citizens enjoy ordering from online platforms and e-commerce websites.
Guangzhou & Shenzhen consumptions habits
Guangzhou and Shenzhen are two large cities in the Pearl River delta, which is one of the most developed metropolitan areas in China. They are also close to Hong Kong and can benefit from convenient international/inter-regional tradings. Shenzhen comprises mainly residents who have moved from other parts of the mainland. Among all the districts, Baoan and Longgang have the largest populations.
Shenzhen people are generally full of self‑confidence and take pleasure in the latest material comforts the city offers. They are confident about making more money to sustain their present lifestyle. Shenzhen’s self‑confident and rational consumers are generally keen to spend on improving their quality of life. In shopping complexes, on top of Guangdong eateries, restaurants offering Hainan, Hunan, Sichuan, and Xinjiang food are a common sight. Dining is now a mainstay of Shenzhen’s night‑time economy. Apart from dining, Shenzhen consumers are looking to spending more on services. Cinemas are extremely popular and going to movies has become a key pastime. Meanwhile, education is another thriving area of expenditure in Shenzhen. The many young children of the large youthful labor force in Shenzhen create a huge demand for educational services.
Child and adult education institutions in shopping complexes everywhere. In Shenzhen, easy access to information and the intense population has resulted in the creation of various hobby groups. Consumers, especially the young, can readily obtain the latest information on their favorite pastimes through the internet and connect with like‑minded people.
Many people are now fans in areas like comics, technology, e‑sports, and fashion. With increasing spending power, Shenzhen consumers are willing to spend a little more in order to buy hobby‑related products and to join the activities of hobby groups. Hence, opportunities in personal hobby consumption are plentiful.
Hainan: China Luxury Consumers Destinations
Hainan, the main source of incomes in the luxury segment comes from tourism and duty free, it is composed of :
- The Hainan Island (海南島)
- Xisha Islands (西沙群島)
- Nansha Islands (南沙群島)
- Zhongsha Islands (中沙群島)
Hainan used to be a special administrative region of Guangdong province, but in 1988 it was designated as a province and a special economic zone (SEZ). The tropical beach resort located in the south of the island is one of China’s major tourist and holiday resorts. Hainan also offers numerous tourist festivals and celebrations. “The Hainan Coconut International Festival” which is held annually attracts thousands of overseas and domestic visitors.
The Boao Forum for Asia, modelled on the World Economic Forum, is held every year in Boao, for Asian leaders. Tourist and local residents leaving Hainan can enjoy duty free shopping for imported products with total value not exceeding more than RMB8,000. Since February 2016, non‑resident of Hainan can enjoy duty free shopping not exceeding RMB16,000 each year.
Secondary Chinese cities: Specificities
Tianjin is an important harbor in northern China, it is also regarded as the gate to Beijing due to the geographic locations. Tianjin is one of the four autonomous municipalities (直轄市), along with Beijing, Shanghai and Chongqing, and is an integral part of the Bohai Bay Economic Zone (環渤海經濟區), which is one of the three biggest economic regions in China. There are many famous tourist attractions in Tianjin, including the Tianjin Eye, the Five Great Avenues, and the Jinwan Square. Binjiang Road (濱江道) is a famous shopping area in Tianjin, and shopping malls like Joy City (大悅城), Tee Mall (天津天河城), Riverside 66 (恒隆廣場) and Isetan (伊勢丹百貨) are loved by consumers.
Hangzhou : Dynamique Hub in China
Hangzhou is a major city of Yangtze delta near Shanghai. Hangzhou is also a fast-developing high-tech center of China. It is rated one of the best business cities in China. With a well-developed private economy and abundant private capital, it has the largest private sector among all major cities in the Yangtze River Delta region. In 2011, among the top 500 private enterprises in China, 56 were located in Hangzhou, ranking first among all cities of Zhejiang province.
Consumers in Hangzhou do not only include local residents, but also foreign-invested enterprise employees stationed in the city, private enterprise operators from neighbouring cities such as Ningbo, Wenzhou and Shaoxing, and tourists and workers from outside Zhejiang province. Due to the diversity in culture, income and occupation of these consumers, their spending patterns and preferences also differ.
Consumers of different age groups differ greatly in consumption concept and consumption behaviour. The middle-aged and elderly in Hangzhou, still under the influence of the traditional way of thinking, tend to be conservative in spending and attach great importance to price-performance ratio and durability. They are price conscious and go after low prices and practicality, but they are less sensitive to style, colour and design.
The main force of the consumers in Hangzhou includes private enterprise operators, white-collar workers, corporate executives, government officials and their relatives. These consumers have a relatively high social status, good education background and strong financial strength. They go after quality of life and form the cornerstone of Hangzhou’s luxury goods and branded goods market. Hangzhou Tower, the most upmarket department store in the city, is a place where top-notch luxury brands from all over the world converge.
Total sales of Hangzhou Tower in 2011 topped Rmb6 billion with a 15% growth in profits, ranking third among all department stores in China on a single-store basis. The huge sales volume of Hangzhou Tower fully testifies to the staggering luxury goods consumption power in Hangzhou. When consumers in this group make purchases, they would place emphasis on the brand, quality, design, color, and style of the product and price is not their main concern.
University students account for a considerable share of the Hangzhou consumer market. While these young consumers are not independent financially and are not fully mature, they tend to compare with their peers where consumption is concerned. According to a recent survey on university students in Hangzhou, their major consumption items are food and drinks, entertainment, and consumer goods such as :
Wuhan one of the most important cities in central and northwestern China, Wuhan is known for industry and manufacture. It is estimated that, of the shopper traffic in Wuhan’s shopping centers, approximately 60% come from within Wuhan, 30% from other cities in Hubei province, and the rest from other provinces. Shoppers from other Hubei cities mainly come from Yichang, Ezhou, Xiangfan, Shiyan, Xiaogan, and Xiantao.
Shoppers from within the Wuhan urban circle will decide on shopping destinations according to travel convenience. Those who drive their own cars would opt for destinations connecting quickly to Wuhan’s inner and outer ring roads and offering convenient parking.
Those coming by intercity public transport can only move along transportation lines and would probably opt for shopping facilities near long-distance bus terminals. Wuhan consumers adore famous brands, particularly those which are well recognized among their respective life and work circles.
Generally, they get to know about international brand names from various media and information sources and learn about ordinary brands through personal experience or recommendation by friends and relatives.
Lower-tier Chinese cities: Specificities
Jinan is a large sub-provincial city, and the capital of Shandong province, a province on China’s eastern coast with a thriving economy. It is not only the political, economic, scientific and technological, educational and cultural centre of the province but also a regional financial centre serving the whole of Shandong as well as eastern China.
The retail market of Jinan has become increasingly competitive in recent years. While a number of shopping centers, such as Parc66, Wanda Plaza, Shimao International Plaza, Dinghao Plaza, and Uni Park, have come into operation, some traditional shopping centers, such as Harmony Plaza, Inzone Phase 3, Guihe Phase 2, and Elite City Guihe Plaza, are catching up to upgrade or expand their operation rapidly.
Various international brand names have also flocked to Jinan within a short period of time. As a result, the shopping ambiance and spending levels of the city have been upgraded significantly, which has, in turn, made an impact on the consumption concepts and spending habits of Jinan’s consumers.
The consumers of Jinan still have high brand loyalty. Local Jinan brands, such as Inzone, Guihe, Sanlian, and Hualian, are still highly regarded by local people. Famous international luxury brands such as Louis Vuitton, Gucci, and Prada, are still securely established in the local upmarket shopping centers of Inzone, Guihe, and the like, relatively immune from the influence of foreign commercial enterprises.
As always, big spenders are mainly white-collar workers of state-owned enterprises, and teachers of tertiary education institutions. Other new shopping malls are mostly positioned to target the young, trendy, white-collar, and moderately lavish consumers.
Situated in the south of the Shandong peninsula, Qingdao is an important base for manufacturing, high-tech industries, and modern services in Shandong province and even the whole of China. In recent years, has been asserting its role as an important coastal port city in the north of China and a world-renowned tourist city, Qingdao’s urban economic structure has been undergoing adjustments alongside urban development. What is more, there have been changes in the habits and pattern of consumption of its residents.
The breakneck pace of online consumption growth is a major change in the attitudes and habits of Qingdao residents in recent years. According to statistical data from Alipay, a third-party online payment platform launched by Alibaba, as of 2014, per capita expenditure on online shopping of Qingdao residents ranked 28th among Chinese cities and 1st among Shandong cities. Moreover, the increase is not limited to consumption on Taobao: in the last two years, the use of online shopping via agents and mobile phone payments by Qingdao residents has been growing rapidly.
Marketing: the key to success in China !
Marketing and Digital Marketing plays a major role in building your e-reputation, promoting, and in your success in China. Moreover, given China has its own platforms, it is important for companies and brands to learn which platforms will be the most useful to them. Listed below are the major e-commerce platforms regarding selling and promoting your brand on the Chinese market.
Xiahongshu is also known as Little Red Book (LRB), is often considered as the Chinese Instagram, on this platform Chinese users have the possibility to share photos and videos. Compared to Instagram, shopping on social media is way more common in China. The store incorporated on Xiahongshu is a simple and effective way to maintain your image and increase your company’s sales.
Chinese KOLs lead fashion Trends
The Key Opinion Leaders also known as KOLs and Key Opinion Consumers (KOC) are major assets to reach a wide community and retain them.
Finding the right KOL might seem tiring but it is absolutely necessary if you want to perfectly target and attract your consumers. If you manage to find the right KOL with a community that shares your brand’s values, you can be sure that your marketing strategy will be efficient.
Compared to other customers Chinese consumers are known to be very sensitive to feedback when buying an item. So, in order to reassure and seduce your customer target, it is necessary for you to share as much product information and caracteristics as possible with the KOL you’ve chosen, this way they will be able to properly present and describe your product to their followers.
Why not contact us to discuss your Fashion project in China?
Creating and setting up an efficient digital marketing strategy, may not be for everyone, but with our help, we may be able to create a tailored strategy to suit your needs. Gentleman Marketing Agency is an agency based in Shanghai, China. We are specialized in digital marketing with different services including lead generation, e-commerce, and branding.
You can contact us to discuss about your project with us, we would gladly help you !