4 Eye-Opening Trends in China 2023 You Need to Know About

2023-02-28

The trends in China are shifting and for the better. With some recent regulatory changes and the country’s economic profile, there are 4 key trends you need to understand and capitalize on to grow your business in China.

The economic profile of the Chinese market in 2023

Unlike American consumers, the Chinese save a large portion of their income. These savings represent a massive economic windfall considering China’s size and population. In fact, according to the latest McKinsey consumer trends survey, 58% percent of urban households prefer to prepare a “rainy-day” fund, swelling saving deposits to a whooping RMB 14 trillion in 2022.

And yet, despite recent pressures, the economy remained resilient, with 3% GDP growth in 2022. Furthermore, by the end of 2022, Chinese policymakers started drastically loosening entry and exit regulations, prioritizing economic growth. In fact, as of January 8th, 2023, COVID-related quarantines were abolished for international arrivals.

As the nation fully reopens and international trade resumes restriction-free, Chinese consumers will have a lot of spending power. As China’s consumer confidence improves and spending grows, the economy’s vitality should be restored. As a result, Morgan Stanley predicts that the Chinese economy will recover, and its GDP will increase by 5.4%.

The 4 trends in China in 2023

Since Chinese customers’ spending habits have changed lately, you should adapt your marketing approach and capitalize on these trends in China to remain profitable.

1. Digitalization: Blending the boundaries between real and virtual worlds.

If there was one trend in China worth tracking carefully, it’s this one. The Eastern nation is one of the world leaders in digitization. And social media is one of its most powerful drivers. Social media marketing is vital for businesses seeking to expand into the Chinese market. Platforms like Red (Xiaohongshu) are viral among young Chinese netizens.

By creating entertaining content, you can engage effectively with this lucrative segment and potentially create a solid customer-brand relationship. This relationship can be leveraged to positively affect Chinese consumer spending habits for years.

Platforms like Taobao and Douyin break the boundaries between entertainment and e-commerce. In fact, of the many Chinese internet users, 68.2% watch live streams. That’s roughly 700 million potential Chinese consumers. And it gets better. Of these viewers, 460 million made a purchase in 2021.

Companies will also leverage VR and AR technologies to differentiate themselves and capture more viewers. For instance, Dewu (an e-commerce application) created the most extensive AR shoe model library. It allows users to try any model and feel its size and details by relying on the technology. It’s become increasingly popular, especially among Chinese millennials and Gen-Z. And dominating these two generations is a vital trend in China you need to capitalize on.

2. The rise of Web3

Despite the 2022 crypto-apocalypse, blockchain technologies continue to attract and give rise to new products. A company that leveraged one of the newest trends in China quite effectively is Burberry. In June 2022, they launched their own NFT (Non-Fungible-Token), the “Burberry Blanko.”

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What is an NFT?

An NFT is a non-replicable token that exists on a blockchain. For our purposes, they typically refer to digital art, but not always.

It’s not just international brands either. Alipay understands Chinese consumer habits quite well, and they announced the launch of 8,000 NFTs based on historical artwork.

Tencent even announced a dedicated NFT platform called Huanhe. Even the state-owned companies Mango TV and Xinhua News Agency are launching their NFTs. In fact, demand is so strong that the Business Wire reports that the industry is expected to reach $48 billion by 2028.

Keep in mind that these are just two examples. Many more companies are hurrying to develop the right product and capitalize on a growing blockchain market. In fact, Web3-related trademark registrations have reached 400, and an additional 3300 VR-related companies were created in 2022. It’s safe to say that the race is on.

3. Gen-Z: The future generation

Gen-Z is undeniably the economic force of the future，and they will be the top consumers of the nation. Those born after 1995 account for more than 260 million individuals and will make up almost 30% of the population by 2025. Furthermore, they are willing to spend more than previous generations, almost accounting for 40% of consumption.

The third of the China trends 2023 is arguably the most lucrative. In fact, according to Tencent, this segment makes up an astonishing 50% of luxury goods consumers. Let that sink in…

It’s a vital demographic for beauty and luxury brands. They are major social media users and rely on online platforms a lot.

Also known as digital natives, they are tech-savvy and highly individualistic, with a powerful desire for self-expression. In fact, according to survey data, 50% of Gen Zs have a passion for the latest and newest experience. They put a premium on brands that align with their values.

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When Gen Z marketing is well done – The Bilibili Case.

Bilibili is a Chinese streaming platform that is a perfect example of a company that markets itself to the Gen Z generation. At a gala in 2019, the platform organized a concert of a virtual idol called Luo Tianyi.

The event attracted 82 million live viewers and an additional 79 million over the week. Most of their viewership was from the Gen Z demographic. That’s almost 60% of the entire Gen Z population!

Gen-Z’s purchasing habits are (to some extent) influenced by peer pressure and social validation. They absolutely love user-generated content, reviews, and other online and offline feedback mechanisms. They are very vocal, which comes with benefits and risks.

If they love a product, they will quickly share it with friends and family, both offline and online. On the other hand, if they dislike a product, you can expect to know about it quickly. Customer support is critical here. You can create a powerful brand by ensuring you get ahead of any issues.

A solid online presence will attract their gaze (and purchasing power). Unlike previous generations, Gen-Z believes their material possessions should reflect their identity. As such, they are more likely to seek natural ingredients, sustainable products, and generally, goods that align with their values.

Influencer marketing is a powerful sales driver with this demographic. And, of course, providing them with personalized experiences can tap into their need for self-expression.

4. A buyer’s market

While not substantial, this trend in China remains important. Unlike the previous generation, modern consumers have become more careful buyers. With the availability of online information, they will take the time to thoroughly research a product before buying it. They will compare its quality and price and seek to compare different platforms and their pricing policy.

For instance, they will browse e-commerce platforms such as Taobao and JD, carefully check WeChat groups for coupons, watch Douyin live streams for deals, and good old brick-and-mortar stores.

Despite being known (and for good reason) for their saving habits, Chinese consumers are willing to spend more on premium products. With that in mind, crafting a marketing strategy that aligns with this market reality is paramount. Companies peddling subpar products may generate sales in the short term, but sooner or later, they will face backlash, and their brand will not recover easily.

The trends in China 2023: Key Takeaways

Convert Gen Z stat—they will evangelize for you
Anger them, and they will ensure the world knows of your failings.
Social media is the #1 way to capture this growing segment.
Differentiators will win, while those in a price race to the bottom will see their profits decrease.
Web3 is far from dead, and AI technology may come to play a role.

Voila! If you have any questions, leave us a comment below, and we’ll get back to you asap.

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