2017 as the year of the rooster is shaping up to be a huge year for the evolution of China’s market place. With 350 million middle class consumers, growing levels of wealth and a higher quality of life this year may well be China’s most significant as they influence and shape wider global trends.

This will prove to be a key year for China’s development as the state backed drive to transition from a largely manufacturing based economy to a tertiary, service based one continues with a focus on digital innovation. This is shaping consumer trends in a powerful way.

Here is a run-down of the emerging consumer trends in 2017:

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International Education

With higher levels of wealth comes a focus on quality education. For the Chinese, studying abroad is the most highly thought of option in a fiercely competitive society. In 2016 the ministry of education reported that 600 000 students went abroad to study. This figure is set to grow in 2017 with a race by academic institutions to attract students through marketing efforts in China.

A growing trend we see is institutions setting up offices and branches in Mainland China. For me, a rise in students seeking education abroad in a more internationalized, modern society is going to be the biggest trend this year. The UK, USA and Australia are set to capitalize on this as the Chinese obsession with learning English grows, it is now a compulsory subject in all schools across China with many students looking to ‘top up’ their studies through additional online tutoring services.

 

 

Chinese companies follow consumers out into the world

Last year over 120 million Chinese tourists travelled outbound, this constituted half of the total tourists from Asia. This large outbound movement of Chinese has caused some friction with cultural and language barriers but on the whole Chinese tourists have matured quickly to become more sophisticated and discerning international consumers.

As the market establishes itself it is likely that businesses will invest in the infrastructure to create better services and products for tourists abroad. Business will invest more in servicing international Chinese travellers. An example is Ctrip, they recently acquired the UK flight comparison service ‘sky scanner’ with the aim of expanding its offerings to Chinese customers to include foreign flights.

Union pay also recently announced that its card is now accepted by 80% of US merchants and at 100% of US banks. Transporting these Chinese methods of payment is an indicator that investment is following the outbound tourists. Alipay (the largest third party payment app in China) also are pushing to expand their services with instant, mobile payment potentially being offered by large chains across the world for the Chinese consumer. The take home message is that the Chinese traveller is also a powerful consumer who will be increasingly catered for in 2017 with services abroad to facilitate greater spending.

 

 

Chinese consumers adopt mobile and O2O applications

There are now a whopping 550 million smartphones in China. The Chinese user has proved time and time again that they will ferociously adopt new technologies, products and services offered on mobile. Digital engagement in China is now centred around ‘on the go’, mobile apps.

In 2017 we are likely to see the speed and rate of adoption increasing further. Mobike and Ofo are great examples, new apps for mobile biking, that were relatively unknown 8 months ago. Now they have bikes everywhere in the major, first tier cities of Shanghai, Beijing and Guangzhou. Both companies were founded less than two years ago but within 6 months had 80 million registered users between them. Mind boggling by any standard.

The app market is set to explode with WeChat launching their own internal app store. With 850 million active users they can tap into their huge, captive audience on the platform.
Smaller social commerce apps such as ‘Little Red Book’ and ‘Mad Hatter’ are also growing with social networking being combined with e-commerce in a whole new way, users like to share images and reviews of their purchases on these Apps. We are witnessing a more diverse array of applications than before. ‘Chinese Meitu’ is another example, it is a photo editing app for Chinese women to beautify their selfies. More than 450 million users are now registered, a new platform nobody saw coming.

 

 

 

WeChat develops its services for consumers

The fascination and focus on WeChat is largely warranted. It is now the most innovative, forward thinking social network in the world, it offers a host of services that have become essential in the users everyday life, it’s 850 million users is testament to that.

The growth of its ‘micro stores’ is a big trend for 2017. I was recently at a craft market in Shanghai and everyone directed me to their WeChat store to browse and pay. These are essentially ‘mini commerce sites’ hosted by the platform, they are linked to the e-wallet service for instant payment at the touch of a screen. It’s a sign that E-commerce and social media are coming together in unique ways this year.

 

 

Consumers boost smaller companies around the globe

With a 1.4 billion strong population and 350 million middle class consumers only a small slice of this lucrative market is required. For many companies as domestic economies slow down China with it’s year on year growth presents the best option for growth.

When a large number of consumers become interested in a product the result is dramatic. Take Greene King IPA, Premier ‘Xi Jin Ping’ was pictured with the then Prime Minister of the UK, David Cameron, drinking a pint. Sales in China increased by 1600% as a result. ‘Swisse Vitamin’ a small Australian vitamin maker became popular on Tmall, the flagship ecommerce platform by Alibaba renowned for quality, international products. Sales surged and the company was bought by a Chinese group.

A bizarre case is the high number of Chinese tourists visiting the small village of ‘Kidlington’ in Oxfordshire, England. Visitors go in their thousands to the village and take pictures in-front of local houses and businesses. It is a strange phenomenon that was promoted by Chinese tour operators and emerged in forums with users imitating each other and sharing the images on social media.

 

 

Cross border e-commerce grows

Cross border e-commerce is still growing, the Chinese have an insatiable appetite for international, western brands with many newer small apps launched with cross border services too. The biggest player is of course Alibaba with their flagship platform ‘Tmall’. Here brands host official stores and can benefit from large scale distribution, delivery and storage facilities offered by the company. Tmall Global, the division dedicated to international brands saw a 15% increase in traffic in the second quarter 2016.

‘Dai Gou’s’ or personal buyers are also helping to sell international brands in 2017 by buying in bulk and selling to their community of followers and shoppers. For newer entry brands this will prove to be an important way to grow your reputation, have an influential Dai Gou promote the brand and tap into their already built-up customer base.

 

 

Interested by the Chinese Market ?

2017 looks to be an interesting year for China’s digital market and we will be analysing all the latest trends here on the Marketing to China blog. If you have a project in mind don’t hesitate to contact us for advice or further information about our services.