06 May Chinese Gen Zs’ Luxury Shopping BehaviorBack to Insights
It has been a rough time for luxury brands globally since the COVID 19 crisis. Brands are actively looking for innovative ways to attract consumers and create more accessible channels. Due to the steady recovery of COVID-19, China has become one of the irreplaceable markets for luxury brands to focus on. Furthermore, Chinese Gen Zs started to reveal their high purchasing power which makes them a crucial target for brands.
The New Generation
As they become a key demographic in China, Generation Z (also called Z-lennials) are defined as those who were born between 1995 and 2009. According to CBN Data’s report in 2020, there are a total of 260 million Gen Zs in China. Although they only account for 20% of the Chinese population, they are responsible for 40% of total consumption.
Chinese Gen Zs believe more in individualism than the previous generation, the millennials in China. The evolution of individualism of the young generations is a result of China’s political and economic environment. People who were born under Chairman Deng’s Reformist Era are the first generation of the single child. They are convinced that a happy life is earned through personal efforts which generally seek a stable life. Then, people who were born in the early 1990s under Chairman Jiang’s Recovery Era are willing to take more risks and tend to live in the present. Lastly, Generation Z grew up witnessing fast economic growth under Chairman Hu and Xi. The abundant resources and materials have led them to inherit more autonomy and defy conventions. Inevitably, the different characteristics translate to distinctive consumption needs for these three groups (see below).
To further analyze Gen Zs spending habits and help brands better understand them, we picked three particular traits that translate to the several trends which luxury brands could explore.
Individualism vs Sense of Belonging
As mentioned above, Gen Zs tend to avoid mainstream culture and pursue individuality. However, they cluster closely around “tags” and grow with these subcultures. On Bilibili, one of the major video platforms in China, there are more than 2 million tags on celebrities, pets, dance, beauty, fashion, games, and more than 7,000 identity-based core groups for ACG, toys, Chinese traditional culture, etc. Compared to previous generations, Gen Zs are more than willing to pay for their interests and sense of belonging. Several noticeable communities include e-sports, ACGN, and traditional culture. Evidently, 60% of e-sports enthusiasts are Gen Z; 90% of traditional culture advocates on Bilibili belong to this demographic.
Cosmetic brand M.A.C. tapped into different communities of Gen Zs and launched several campaigns targeting several “groups”. For example, their collaboration with Tencent’s Honor of Kings and “Produce Camp” generated epic results among esports lovers and idol fangirls. They also launch a collection of makeup products with Forbidden City for traditional culture advocates and with Kakao Friends for ACGN devotees.
The Element of Unexpectedness
Another unique spending behavior of Gen Zs is that they want certainty but are also excited about the element of surprise. The proof behind this characteristic lies in the rising popularity of blind boxes. When Gen Zs purchase a blind box, which depicts a range of products inside, they are certain they will receive something they like. However, they enjoy the excitement of not knowing what they will get. Pop Mart, a toy store that offers blind boxes on hundreds of IPs, is now a company worth several billion dollars.
Picture Source: Weibo
I am What I Buy and What I Use
Last but not least, Z-lenials express their unique identity by sharing the products they buy. They are more than willing to share on social media what they buy or use which represents who they are. If a significant number of Gen Zs have the intention of posting a product, it indicates that this product uses the right strategy and intrigues this key segment. For example, instant coffee brand Saturn Bird Coffee and health-tech beverage brand Genki Forest received tens of thousands of posts on RED and Weibo, which sealed their success among Gen Zs.
Finally, Gen Z is not ONE target. They are diverse groups of individuals. Brands need to find what resonates with which group instead of treating them as an entire segment.
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