Chinese Gen Z's consumption trends distinct from previous generations, Euromonitor reveals

In 2019, millennials (born between 1980 and 1994) and members of Generation Z (born between 1995 and 2009) accounted for almost 40% of the population in China. The proportion of the population living in urban areas reached around 60% in 2019, and is projected to reach 65% by 2025.

The demographic landscape and population trends have put a specific segment in the spotlight. Urban millennials and Generation Z, which together represent a key segment shaping the outlook for the Chinese consumer market, as their attitudes towards digital convenience, shopping preferences and lifestyles aredriving the growth of the relevant sectors and providing new market opportunities.

Here are key takeaways for marketers from a new Euromonitor report: How China's Urban Millennials and Gen Z Live and Spend.

Mobile-first consumers focussed on speed and convenience 

The mobile phone is the centre of the Gen Z consumers' universe. More than their counterparts in any other economy, this cohort uses the smartphone to make digital payments, buy food online, shop and socialise. As mobile networks only get faster, these consumers are expected to only increase their time spent on and around their handsets. 

As mobile use has proliferated with this generation, this report suggests that Gen Z is not just using phones more, but using them for a wider assortment of activities. Super apps such as WeChat, Alipay and Taobao are driving this wider use, and brands are keen to interact with consumers through smartphones by developing official accounts and mini-apps. To be effective, marketers need to jump on rapidly emerging tools such as live-streaming to showcase products and have real-time interaction with consumers.

Hunting for premium shopping experiences 

Chinese consumers have benefited from China’s economic growth and rising urbanisation in the past decade, and their pursuit of better living standards and increased national pride is reflected in their purchasing decisions. Across large metros and smaller cities, there is a concerted push to premiumise purchases by experiences. While brands such as Dyson have seen a sharp growth in demand for their products, other aspirational labels such as Xiaomi's products ranging from air purifiers to electric toothbrushes have seen a spike in sales. 

Vocal for local brands 

During the time of the pandemic, Chinese Gen Z-ers have shown a strong inclination to support local brands. Brands such as Anta, Li Ning, Bosideng and Pefect Dairy have shot to the top of segments ranging from sportswear to colour cosmetics. Latching onto this nationalistic trend, legacy labels such as Artic Ocean, Feiyue and White Rabbit are getting a second wind too. 

The pandemic sped up the process of localisation, as many international brands were forced to suspend production, while overseas logistics faced a significant slowdown. With consumer patriotism reaching new heights, domestic brands have unprecedented opportunities to grow. Marketers need to emphasise product innovation, fashion sense, offer better value for money and aim to build emotional connections with them, this report suggests. 

Reshaping Chinese cities

As their disposable incomes increase, China's Gen Z is taking a markedly different worldview compared to the previous generation. For example, the rate of marriage is falling, so more people are single and living on their own. These consumers are finding new ways to live (pets being treated as family members, for example) and marketers need to be cognizant of these shifts.

Even among those getting married and having children, there is an accent on natural products and conspicuous spending on specialised products for them. Nonngfu Sring, Shinho, XTC and MiniJ are some brands that have benefitted from making these unique products targeted at free-spending parents. 

This article is filed under... Top of the Charts: Highlights of recent and relevant research