As technology and manufacturing processes in China increase, so does the quality of goods they create and the willingness of Chinese to purchase products made domestically. China is quickly catching up to meet the high demands of its consumers and is steadily gaining their trust back, but how will this impact foreign brands, and how can they ensure they don’t lose their share of the market?
MEETING THE SUSTAINABILITY DEMANDS OF CONSUMERS
Western brands should not expect to be able to apply the same sustainability measures and marketing tactics in China that have been used elsewhere. Chinese consumers care about sustainability more than ever before and paired with government pressure, it’s a trend that will only become more important.
But what do sustainable products look like to Chinese? They are products with natural ingredients made from durable and recyclable materials with little aftercare. Brands can also win over sustainability-conscious customers by being transparent about their supply chain – it is even more important to consumers than fair-trade products or safe working conditions. Be transparent about where raw materials that were used come from as well as the manufactured end-product.
A 2022 study found that 50% of Chinese consumers were distrustful of sustainability claims.
Chinese youth who have the best access to information on their purchases are driving sustainability consumption in China. They will be the future of sustainable consumption and will take no prisoners when it comes to calling out inauthentic sustainability claims of brands.
LOCAL BRANDS and SMALL BUSINESS
Made in China 2025 is part of the Government’s 10-year plan to rapidly develop industries such as technology, agriculture; aerospace engineering; new synthetic materials; advanced electrical equipment; emerging bio-medicine; high-end rail infrastructure; and high-tech maritime engineering. This initiative aims to change China’s perception from a low-end manufacturer to a high-end producer.
Chinese consumers have long chosen imported brands due to their quality and status symbol, but as Chinese brands up their game, we can expect this to shift, and it has already started. On the rise is a trend known as guochao—a desire to buy products and services made in China to support and connect with local roots and producers. In 2021, a study found that around half of respondents from all age groups said they were more likely to buy domestic brands after the COVID-19 pandemic. The Made In China 2025 Plan and increasing nationalism and pride in local products has increased consumer preference for local brands.
Chinese farmers and agricultural producers in faraway provinces have been selling their goods directly to consumers through interactive live streams and bite-sized videos on platforms like Douyin. Chinese consumers have developed a fascination with watching how their food is produced and connecting with the farmers, increasing overall trust in the product and its quality.
This trend soared during the Covid-19 pandemic when the number of agricultural content creators with more than 10,000 followers on Doyuin grew 6x from July 2019 – July 2020. On the e-commerce platform Taobao Live, over 100,000 farmers broadcast 2.52 million sessions from March 2020 – March 2021. These live-streaming sessions became a lifeline for producers during the pandemic when logistics companies that were relied on to transport food shut down.
After the 2008 melamine milk scandal that resulted in the deaths of six babies, Chinese consumers became very concerned about food safety and were very cautious about where they bought their food. Live streaming from manufacturers and farmers has helped regain the trust of consumers, along with increased safety standards and practices.
NATURAL INGREDIENTS
Chinese consumers increasingly desire products that contain natural ingredients across several categories, including skincare, cosmetics, food and apparel. Transparent labelling of products’ carbon footprints, livestreaming about eco-friendly options, and greener packaging are all gathering steam in China. In the cosmetics category, product search terms such as “natural”, “organic”, “clean label”, and “sustainably sourced” are becoming more popular, and some e-commerce sites like Tmall saw a 400% increase in sales of natural and organic cosmetic brands
from 2019 to 2020. Apps like Beauty Evolution 美丽修行 have become popular for users to check the ingredient list of products and verify their “natural” claims. The natural cosmetics market is expected to reach $4.4 billion U.S. dollars in 2027.
Population growth in China has put pressure on food production over the years, and as a result producers have used biological and chemical methods to improve production output. However, there is a growing awareness that these added ingredients aren’t always the best for our bodies. As consumers begin to care more about their health, we also see an increased interest in organic food products. The Chinese Ministry of Agriculture expects China to be the fourth largest organic food consumer in the near future.
Although consumption of organic products is still low, purchasing intent is driven by factors such as income, degree of trust in organic food, degree of acceptance of organic food price, and consumers’ concern about self-health. This intent is only slightly affected by factors such as consumers’ age, education level and concern about environmental protection.
CONCLUSION
Marketers now need to invest more in China’s market to recapture the attention of Chinese consumers and ensure they are using the correct platforms to communicate their brand. We will also soon be publishing our 2023Chinese Social Media Platform Guide which will help brands navigate China’s diverse social media landscape. Contactguy.thompson@umssocial.com if you would like to be notified when it is released.
Check out what other trends we expect to see develop further during 2023 here.
