Link: Four Key Chinese Consumer Trends For 2016 | PCM
By: Philix Liu
Looking ahead to 2016, Mintel’s APAC Trends Analyst, Philix Liu, discusses the four key Chinese consumer trends set to impact the market, including implications for both consumers and brands in the year ahead.
The full copy of Mintel’s Chinese Consumer Trends 2016 is available to download at: www.mintel.com/china-consumer-trends
Online-to-offline service is growing more popular among consumers. Traditional retail brands and start-ups are striving to convert consumer interest into sustainable business.
In 2015, O2O, a popular term referring to online-to-offline on-demand business, was growing rapidly across a wide array of sectors in China’s major cities. From retail delivery to door-to-door professional services, consumers only need to tap on their smartphones to place an order, all while sitting comfortably on the couch. Meanwhile, the competitive landscape of the Chinese O2O market grants more power to consumers for tailor-made services. Therefore, we have seen an increase in a wide array of on-demand customisation services,such as HaoChuShi (Good Chef), consumers can choose their preferred regional cuisine, specific flavours and even the chef to cook a meal for them at their home.
Mintel’s research reveals that Chinese consumers show strong interest and loyalty in using door-to-door professional services, as nearly half of Chinese (46%) book doorto-door services online (e.g. laundry, housekeeping, massage), with four in five (78%) of those who have used door-to-door service indicating they will do so again.
With all the adoption that O2O has experienced since its inception – elevated consumer interest and cross-category innovation – it has yet to reach the mass populations living in the lower tier cities and the countryside. In 2016 and beyond, more O2O businesses will be executing strategies to provide products and services to regions where it was previously unavailable.
People want to see and experience the world at all times, and new digital technology is working to keep us at the cutting edge of life.
Among online media formats, video is a powerful storytelling instrument that can vividly convey a message and entertain an audience at the same time. With the ‘new norm’ of livestreaming, everyone can be a creator and a broadcaster, with true ownership over personal media content.
Live streamed video satisfies consumers’ needs for online interactions as Chinese netizens are highly social and active in voicing their opinions online. ‘Bullet Screen’ is an early sign of consumer interest in online participation while a film or TV show is being streamed. Chinese e-commerce company Bolome is tapping into this interest in instant interaction by blending it with live streaming and online shopping. Live streaming also taps into many different aspects in consumers’ daily life. Recent interest in home robotics systems, such as A.I. Nemo live streams the happenings in-home straight to the user’s mobile device.
Chinese consumers are gradually developing an appetite for watching videos online, leading to a willingness to pay for high quality and uninterrupted content. Mintel research highlights that video has become the most popularly consumed online media in China, with as many as 83% of internet users watching videos on desktops and an additional 73% viewing videos on tablets. And some 38% of Chinese consumers have already paid for online video streaming and 31% would be interested to give it a try.
Looking ahead, the possibilities brought by live streaming video content open up a whole new world of sensational experiences and entertainment to consumers. It is also an effective marketing channel brands could use to stand out from the competition. With better video and recording technology, live streaming will be more interactive, more immersive and more universal. Also with the camera technology and platform capacity improves, live streaming 360 degree video is expected to become a viable marketing tool for companies to consider in their marketing mix.
Independent in their personal and financial lives, Chinese women are creating a ‘Women Only’ market.
Brands are paying more attention to female preferences and needs in both product development and in the way in which they communicate to and with women. It is not just happening in the beauty and fashion sectors, but this newfound female perspective covers a much broader market scope to capitalise on the growing influence of women in China. There have been a number of services emerging that cater to women’s specific needs, including the popular Chinese taxi app Kuaidi Dache which introduced a women-only taxi service to provide women with safe night-time, peerto-peer rides. Additionally, mobile app Linglong Salon serves as a virtual community designed for modern career women in their twenties and thirties.
Modern Chinese women are becoming stronger controllers of family finances. Mintel’s research reveals that as many as 58% of mums say they are the sole person who manages household finances. When it comes to spending habits, women are considered to be more open to embracing new lifestyles and are more aspirational in terms of trying new products and experiences, while males are more likely to stick to what they know. In fact, only 52% of single females hold the traditional opinion that ‘life is not complete without getting married’, compared to 66% of single males. At the same time, 48% of single females are eager to travel to more unknown places.
Customised products and services and targeted communications for female consumers will continue to be welcomed in China. At the same time, the market is waiting to see the rise of brands that are not only created for women but also owned by women. In 2016 we will continue to see lucrative opportunities for brands to target female consumers with ever-increasing spending power to pursue their interests.
Seeking out proactive over preventative measures, Chinese consumers treat their body with more sophistication than ever.
A more conscious approach towards living a healthy lifestyle is taking shape among Chinese consumers in major cities as they become more discerning in their food choices. We are seeing healthy restaurants expand food offerings and not from concentrate (NFC) juices and juice detoxes gain in popularity among healthconscious Chinese consumers. Moreover, technology is playing an important role in shaping the conscious health trend in China, and innovations such as mobile fitness apps, wearables and smart devices have elevated exercise and healthy living to a whole new level.
Chinese consumers have shown a strong interest in using smart technology to manage their health and wellness. According to Mintel, some 30% of consumers use mobile or tablet apps to track their activity levels, and a full 74% show interest in using wearable devices to manage their health in the future. While the number of consumers who claim to have sub-health conditions has reached 86% in 2015 rising from 75% in 2012, Mintel also reveals that doing regular exercise (64%) has become the most import factor for achieving a healthy lifestyle, up from 51% in 2014.
In 2016 and beyond, Chinese consumers’ food sophistication and exercising enthusiasm will drive new demand for healthy food and health technology to meet their more proactive approach to healthy living. As this proactive approach to physical well being penetrates new consumer demographics, major concerns like stress and childhood obesity will be addressed head on by consumers and brands alike.
2016 brings with it a series of opportunities for personal care brands and manufacturers to develop their strategies to further appeal to their consumers in China. The rise of O2O (Online-offline) retailing offers a wide range of innovation potential for companies – from bringing their experiential services directly to the doors of the households they supply, to adding further value to their brick-and-mortar stores by turning these into social spaces. Another cue comes in the form of consumers increasingly using social networking as a platform for product reviews, meaning that cosmetic brands can now ask online influencers to use their products in an unedited live-steaming format and proving their efficiency as a result. Understanding the ‘she’-conomy and reaching out to women more effectively will also be key in the year ahead for personal care brands, particularly as in China 42% of women say they cannot help buying when there is a shopping atmosphere such as 11 November, compared to 34% of men. A final trigger will be for brands to offer a remedy for rising stress levels, with development key in offering experiential approaches as well as product innovations to reduce stress levels.
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