2020 has presented a new series of challenges to companies all over the world. As domestic demand recovers and evolves through 2021, Chinese consumers have shown remarkable resilience. The report Tracking the Trends 2021 by Tong and Jing Daily identifies the areas of development that are expected to become a trend in Chinese consumer culture, as well as the accelerating speed of such trends and adoptions, which are critical for brands to understand.
Why Does Luxury Brands Need China’s Presence?
Emotional responses to Covid-19 can be found in three places: the body, culture and environment. This set of priorities forms the rise of a new generation of impact-conscious consumers in the Mainland.
Young shoppers are increasingly interested in cultivating a sense of self-awareness by prioritizing wellbeing and body optimization, as well as endorsing brands that align with those values and intentions. During the pandemic, body positivity has been at an all-time high, and certain local brands have played a key role in spreading positive body messages.
Environmental issues are on the minds of younger generations, from government policies to local start-ups.
Tech giants were proactive and responsive, demonstrating a more caring attitude towards the community.
Why is Cultural Content So Important For Short-Form Engagement?
Short-video apps, most notably Douyin, Kuaishou and Xigua have emerged as vibrant new spaces in China for cultural content and art consumption. This trend is expected to accelerate beyond 2020.
In China, short videos have become the most effective communication method for brands to reach new audiences and potential customers. Among all the short video platforms, Douyin has proved to be the most effective.
The pandemic has accelerated the consumption of short videos. Almost 90% of internet users in China now use short-video platforms on a daily basis, averaging more than 100 minutes per day.
Many creators were gathered on Douyin as a result of the pandemic, from street artists and iPad illustrators to calligraphers and traditional woodworkers. Chinese cultural institutions are following the trends with many offering virtual tours and live streams on Douyin.
Douyin is on the verge of saturation in the Chinese market, with over 600 million daily active users.
In 2021, video length and the connection between short video and e-commerce are bound to grow. Douyin has enabled longer videos as a part of a drive to improve content quality and broaden usage.
As of 2019, ByteDance has helped 22 million creators to generate over $6.9 billion and is expected to offer long term support for content creators.
Why Do Young Chinese Consumers Enjoy Brand Collaborations?
In China, Gen Z and Millennial consumers are looking for exclusive products that stand out from the crowd. Thus, fuelling a rapidly evolving culture of innovative “mega-collaborations” between brands to surprise consumers.
The concept of branding is still a relatively new phenomenon in China as compared to the West, and young consumers have shown an openness to the role of brands in daily life. For example, sponsor logos are displayed prominently on reality shows and brands are written into storylines of dramas.
The report highlights - “The emergence of direct-to-consumer (DTC) domestic brands such as Perfect Diary has sparked competition to stand out via innovative collaborations that propel newcomers to “internet-famous” (wanghong) status with the ability to iterate signature products through creative derivatives.”
Brands leverage collaborations in order to deliver digital and physical interactions, as well as content, for broader reach and greater impact. Consumers can connect and engage with brands through special events, gaming features and other opportunities.
Several popular and successful mega-collaborations have leveraged the current taste for “national trend” goods, “cultural creations” and nostalgia to tap into China’s distinct heritage.
International brands may find that collaborating with local partners is a good way to interact with the young audiences in China as more young consumers are showing a preference for “Made in China”.
The challenge for brands is to go beyond to ensure that the collaborations represent brand values rather than merely generating buzz.
How Do Luxury Brands Help China’s Creative Communities?
Brands that can reflect their personalities, creative cultures and hobbies are welcomed by the young consumers in China. Hence, focus on younger consumers and their desire for belonging will be critical in the future.
Many global brands see community-building as a quick way to win the hearts of young consumers.
When it comes to Luxury Brand’s target audience, it is likely that fashionable young women are the first to come to mind. Luxury brands have started to concentrate on the untapped potential of younger males in recent years as gaming has rapidly established itself as the most effective platform to deliver targeted brand awareness and exposure.
China has the world’s largest video game industry, which attracts brands due to the high volume of traffic. Brands like Gucci, Balenciaga and Burberry have been eager to incorporate gamification into their seasonal campaigns.
However, the ROI is still difficult to estimate since it takes courage and experimentation to tap into previously underserved demographics. But brands may need to get started first to avoid having to wait in line later.
Brands need to build immersive scenarios for their potential customers, whether by offline events or online events (live streaming), to reach consumers and encourage them to try the products within the immersive scenarios.
Local brands, on the other hand, have become more daring to embrace historically underserved communities, such as the LGBTQ+ community, which has tremendous creative capacity and purchasing power. Domestic brands will shine when customers need to express their personalities, by demonstrating their knowledge of these scenes.
By 2021, domestic brands may outperform their global counterparts in some regions, such as the culturally sensitive issues of sexual orientation and gender identity.
It is important to concentrate on the existing target audience, but in China, preferences can shift quickly. In the post-pandemic retail world, both global and local brands must begin to be aware of the emerging creative cultures and market responses, as the Chinese market is becoming highly saturated with competition.
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