欧睿-中国城市千禧一代和z世代生活与支出报告（英文）-2020.11-66页_7mb

Summary of How China's Urban Millennials and Gen Z Live and Spend

Core Content

This document explores the lifestyle and spending habits of urban millennials and Generation Z in China, highlighting their role in shaping the consumer market. It identifies three key themes and eight corresponding trends that reflect their behavior and preferences, offering insights for businesses aiming to capture market opportunities in this demographic.

Main Themes and Trends

Theme 1: Ubiquitous Digital Convenience

• Living on Smartphones: Urban millennials and Gen Z are heavily reliant on smartphones for daily tasks, including shopping and communication. Mobile payment systems, such as Alipay and WeChat, have become central to their purchasing behavior.

  • M-commerce in China grew at a 64% CAGR from 2014 to 2019, reaching $111.8 billion in 2019.
  • 45% of China’s M-commerce value represented its global share in 2019.
  • 50.7% and 55.9% of consumers in beauty and personal care, and apparel categories respectively use apps for product research and comparison.

• Influencer Integration: Influencers play a significant role in driving consumer decisions through content and live-streaming.

  • Platforms like TikTok and KuaiShou have become key for integrating influencer content into e-commerce.
  • Taobao Live-streaming generated CNY20 billion in sales during the 2019 Double 11 Festival, with 50%+ brands on Tmall participating.

• In-Home Convenience: Consumers are increasingly using apps to manage household tasks and services.

  • Food delivery in China reached USD68 billion in 2019, growing at 104% CAGR from 2009 to 2019.
  • Robotic vacuum cleaners saw a 31% CAGR in China, with 5.4 million units sold in 2019.
  • "Do it for me" services (e.g., housekeeping, beauty services) are becoming more popular, with apps enabling convenient access.

Theme 2: Developing Shopping Preferences

• Premiumisation: Urban consumers are willing to pay more for premium products, especially in high-tier cities.

  • Consumer expenditure per capita in high-tier cities grew significantly, outpacing many developed countries.
  • 90% of Chinese consumers have a positive perception of local brands, and 76% increased consumption of locally branded products in the last year.
  • Brands like ANTA, Li Ning, and Perfect Dairy have leveraged national pride and digital marketing to grow their market presence.

• Redefined "Made in China": Domestic brands are gaining traction through innovation, quality, and emotional branding.

  • Xiaomi and Jingxi have seen strong growth in lower-tier cities by offering affordable, high-quality products.
  • Xiaomi's experience stores are 60% located in lower-tier cities, indicating a strong presence in these areas.
  • Jingxi users are 70%+ from lower-tier cities, with a 300%+ increase in daily orders during key periods.

• Impact of COVID-19: The pandemic accelerated the trend of "buying domestic" due to supply chain disruptions and increased consumer patriotism.

  • High-income households are expected to maintain their premium spending, while lower-income ones may focus more on affordable, high-quality options.

Theme 3: Modern Urban Life

• Pets as Family: Pets are treated as family members, driving demand for pet-related products and services.

  • 72% of Chinese consumers consider pets as beloved family members, with 80% of those aged 15-29 holding this view.
  • The pet care market is projected to reach USD24.5 billion by 2024, with strong growth in pet food, furniture, and smart products.

• Humanisation of Pets: Pet products mirror human lifestyle trends.

  • Pet clothing and accessories are in demand, with sales of pet furniture increasing by 200% during the 2019 Double 12.
  • Smart pet products are gaining popularity, with Petkit leading the market and receiving USD20 million in investment in 2019.

• Advanced Parenting: Parents prioritize safety, health, and quality when purchasing baby products.

  • Safety concerns following the 2008 Sanlu scandal have led to a preference for natural and safe ingredients.
  • Chinese parents spend USD531 annually on milk formula for 0-3 year-olds, 23% higher than in the US.

• Community Interaction: Both parents and pet owners engage in online communities to share experiences and learn.

  • Apps like Lingdang and Dianping cater to these needs by providing information and fostering interaction.

Key Lessons and Business Implications

• Omnicannel Marketing: Businesses should focus on WeChat accounts, mini-apps, short videos, and live-streaming to engage consumers.
• Direct-to-Consumer Models: These models can help keep prices affordable while maintaining quality, appealing to both urban and lower-tier city consumers.
• Influencer Marketing: Leveraging KOLs and KOCs is essential for promoting products and building emotional connections.
• Local Branding: Emphasizing national pride, product innovation, and emotional branding can help domestic brands thrive.
• Post-COVID Opportunities: The pandemic has reinforced the importance of local brands and digital convenience, creating long-term growth opportunities.

Conclusion

Urban millennials and Gen Z in China are key drivers of the consumer market, influenced by digital convenience, evolving shopping preferences, and modern urban lifestyles. Their spending habits and technological adoption present significant opportunities for businesses that adapt to these trends, focusing on innovation, affordability, and emotional engagement.