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Point of View: The next Chinese Customers

Insights from our consumer research in China

young Chinese people
The next generation of Chinese Consumers

Thinking just a few years back, it was common, that Chinese brands would hire ‚Western' design agencies to understand and design for European and American markets. While this is still a common practice for some smaller- or start-up manufacturers trying to establish their brands, many large and established Chinese brands are now focusing on their vast and quickly growing home market. 

In order to deliver competitive offers, these Chinese companies have put a strong focus on researching, analyzing and answering the specific needs of their domestic customers. Understanding user behaviors, aspirations and needs, and building fundamental knowledge about the context in which a product or service is used, is giving them a competitive edge in their home-region. 

studiomem has established trusted relationships with some Chinese consumer brands whom we help to sharpen and transform their domestic-market offerings. Here are some of the things we've learned so far:

Different culture - different needs

​What we're noticing is, that Chinese consumers’ behaviors are rapidly evolving in sync with a more affluent but also culturally emancipated lifestyle. Chinese consumers increasingly expect functionality that is relevant to a lifestyle specific to China and they more-and-more often reject features that were developed for western consumers but are not deemed useful in the eyes of the Chinese. While this is a totally comprehensible behavior, the important and interesting insight for EU and US brands trying to serve them is that they need to be more specific and relevant when developing products for Chinese needs. Telling examples for this can be found in the field of domestic appliances. Ice-cube makers in refrigerators, for example, are a feature that many foreign brands tend to offer in the fridges they offer for China. But generally, the Chinese actually prefer warm beverages to cold ones - in fact, they deem chilled food and drinks unhealthy and will even let their yoghurt warm to room temperature, before consuming it. In the Chinese consumer research we've performed, we have seen many ice-cube compartments inside fridges filled with everything but ice and superfluous ice-maker hardware often ends up stored somewhere inside their fridge. The Chinese do not need this feature and it is deemed a waste of their already small cold storage space.

Affluent middle aged – the pragmatics

​According to McKinsey, 76% of China’s urban population will be considered middle class by 2022. Conservatively projecting, this will account for at least 550 million middle class customers. For this target group, a few years ago owning foreign (EU/US and Korean) brand consumer electronics and appliances was considered a sign of status. They were proudly displayed in the visible areas of their homes and it seemed that their task to serve as a status indicator was just as important as their ability to wash, cool, vacuum, play music. From what we have learned during our recent visits to affluent, middle-aged Chinese consumers’ homes, this behavior is slowly disappearing. 

When it comes to commoditized consumer goods (such as household appliances, tools, etc.) their purchase criteria have become much more pragmatic: ‘safe’, ‘practical’ and ‘good value’ are the qualities affluent Chinese consumers are now increasingly looking for. At the same time, increasingly the domestic brands like Haier, Midea, Gree are considered state-of-the-art – and certainly they offer good value for money as well as solutions more specific to Chinese behaviors. When considering these three principles – ‘safe’, ‘practical’ and ‘good value for money’ - as relevant purchasing criteria, we were wondering how important the overall quality of a product was for Chinese consumers. Interestingly, we learned that consumer electronics are expected to have only a limited life span of 3 to 5 years maximum, whereas some other high quality consumer goods like Le Creuset pots or Hermès bags are ‘purchased for life’. These consumer electronics are therefore more prone to be replaced frequently and subject to a more pragmatic decision-making process when being purchased.

Chinese Millennials - attracted to innovative, immersive experiences

​Much has been written about Chinese millennials. This demographic is 400 million strong, making up almost a third of the Chinese population and therefore much larger than the combined working population of United States and Western Europe. Chinese millennials, born between 1980 and 2000, are the first generation born under the one-child-policy. Being raised as single children and grandchildren, they often encountered a very privileged and protected childhood being the sole focus of their family’s attention. Many of them are above-average affluent as they tend to be well educated, occupying well-paying jobs and enjoy additional financial security provided by their elders. Living in their own or family-owned apartments, they often have extra cash to spend. They are also less and less looking towards the West for guidance in lifestyles and trends. They consider the West the old world, where things are moving slowly, where technology is adapted conservatively - and that is increasingly less desirable to them. Their lifestyle is defined by convenience, and the technology that provides it is adapted without much concern for data protection or worries about feeding ever advancing digital platforms with personal information. They put a lot of emphasis on expressing, exposing and publishing themselves in social media, so they are extremely focused on appearances – both men and women – using make-up, enhancing their photos digitally to look their absolute best, almost to the extent that they create the immaculately-perfected digital representation of themselves. Much has been written about the Chinese and their sometimes extreme-but-innovative use of messaging tools and social media. If anything, WeChat can serve as a model and inspiration of how to transform  or evolve a Western service platform and user experience to Chinese needs.

All this makes Chinese millenials a comparatively new, tech-savy group of consumers with the highest expectations towards product- and service-innovation and quality. Virtually any product is expected to connect to and engage with digital service offers. Beyond that, these offers need to be targeted, intriguing, and offer a holistic customer experience. Look at Nuskin Ageloc as an example for these types of connected, customizable product and service stories. The product is a facial cream which is purchased and reordered through an App leading the user through a customization protocol at the end of which a combination of formulas is chosen specifically for the user’s needs and with the promise to deliver the best possible anti-aging treatment (to 20-somethings). 


​Foreign brands often implicitly stand for high quality. Quality is still considered a high value, and is implicitly expected in products from Europe, Korea and Japan. But increasingly, "quality" as conventionally defined by "reliability, safety, usability" is neither enough for the more pragmatic mindset of the affluent middle class nor for the more experimental and holistic expectations of Chinese millennials.

Brand and heritage are still very important when it comes to luxury products, but the feature sets of premium products need to help deliver the Chinese lifestyle or offer something truly engaging.

In terms of physical design, it’s not enough to change the appearance of a western product to sell it in China. Brands need to combine new paradigms of functionality and usability into China-specific solutions. And they need to extend these paradigms into multi-touchpoint experiences to successfully target the Chinese millennial.

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