As China is a constantly changing country, new opportunities appear every year. Here are 8 marketing trends for the Chinese Market.
1. Lower-Tier cities are booming
Internet user growth is saturating in Chinese biggest cities. Future growth will thus come from rural areas, and especially Lower-Tier cities (Wenzhou, Yantai, etc.). The development of rural infrastructure is one Chinese government’s biggest priorities to reduce the disparities of income distribution and to drive domestic consumption.
The rural Chinese online market nearly doubled to RMB 353 billion yuan ($51 billion) in 2015 (Chinese Ministry of Commerce). Tier 1 cities of Beijing Shanghai and Guangzhou will only represent 10.6 million of the 159.9 million (only 6.6%) new internet users expected between 2015 and 2018 (JP Morgan).
Smaller cities and rural areas should be a major priority for anyone who wants to enter the Chinese market, and especially through e-commerce.
2. Virtual Reality (VR) is more and more popular
Virtual Reality demos were major attractions of shopping malls in 2016. Consumers experienced the technology at “VR cafes.” In 2017, the pace of commercialization will increase.
GfK market research institute forecasts an increase from RMB 650 million ($94 million) in 2016 to RMB 1.6 billion ($232 million) in 2017 of virtual reality (VR) device retail sales in China. All key domestic internet companies like Alibaba, Tencent and LeEco should continue to invest heavily in VR in 2017.
Hardware technology constantly improves, and competition will shift to content. Brands can take advantage of this technology for events or commercials, for example. Maybelline, with the help of KOLs, recorded and shared parts of its “Make it Happen” event in New York.
Related to the previous part, live-streaming—is real-time broadcasting of video content—has also become a major trend in China. Taobao (from Alibaba) and its rival JD.com, two of China’s biggest online shopping platforms, have both launched their own live-streaming platforms: Taobao Live and JD Live.
46% of China’s internet population has already used a live streaming app. They are also a very good opportunity for shop owners since while the streamer (a KOL—Key Opinion Leader, for example) presents the products, links appear on the screen and allow the viewer to buy them.
4. Luxury Goods Will Rebound
Luxury product sales are likely to continue to rebound from a slowdown in 2014 and 2015. The latter was mostly due to then anti-corruption measures taking by President Xi Jinping, and a slight shift to a less conspicuous way of living.
However, the Chinese travel more and more and but a lot of luxury goods abroad, partly for cheaper prices. It is thus very important to have a good e-reputation on the forums visited by the Chinese want they prepare their list of luxury products they want to buy abroad.
Local shopping for luxury goods is also likely to rise because of brands’ global pricing strategies and lower cross-border taxes.
5. Domestic Tourism
Domestic travel within China is in vogue as local infrastructure improves and government policies help to increase consumption. Mainland China saw 344 million domestic tourist trips during the 2017 seven-day New Year’s holiday, a rise of 13.8% from last year (China National Tourism Administration).
Hunan, Xinjiang and Ningxia provinces, for example, were particularly popular destinations this year.
The National Development and Reform Commission, recently announced that China plans to inject RMB2 trillion ($290 billion) into the domestic travel industry by 2020, with some help from private investors.
6) Cross-Border E-commerce
Thanks to an increase in disposable income, lower cross-border taxes (as we said before) and a bigger demand for high quality and authentic products among Chinese consumers, cross-border e-commerce will continue to grow.
Different platforms offer an ever-increasing variety of products like Kaola.com (考 拉海 购 购) and Mihaibao (海 宝 宝).
7) Domestic Brands become more and more popular
Chinese smartphone manufacturers like Huawei, Vivo and Oppo are becoming giants. They saw dramatic increases in shipments and ate into the market share of foreign competitors, like Apple and Samsung.
Chinese consumers now trust locally manufactured smartphones. They find them just as good as their foreign equivalents, and sometimes even better and more suitable to their need. This change in perceptions is not limited to smartphones.
However, international brands are still the biggest players in categories like food and beverages, dairy, and personal cosmetic products.
8) WeChat will Become Even More Powerful
WeChat is the largest social network in China with 809 million active user accounts, it is so integral that users now spend 35% of their time on smartphones on WeChat. The services have now become very integrated.
The launch of the mini apps, or mini “programmes”, allows users to access and engage with a variety of apps within the messaging app itself. Brands will be able to create games, store apps and service-based apps on the WeChat network and this is a good way to incentivize users to follow and share their content.
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