Source: Media Outreach
HONG KONG, CHINA – Media OutReach – 6 March 2023 – In the past two decades, China’s economy has thrived, people’s living standards have steadily improved, and the consumer market has been full of dynamism. Consumption is the biggest contributor to China’s economic growth today.
In 2023, China’s consumer market will face growth challenges given the impact of pandemic fluctuations and the arrival of the post-pandemic era. On the other hand, the Government has continuously introduced policies to expand domestic demand, encourage new forms of consumption, and drive high-quality growth. This reflects how China’s consumer market is undergoing rapid upgrading and innovation in consumption patterns and business models, ushering in a new phase of development. Against this backdrop, Deloitte Consulting has released the 2023 China Consumer Insight and Market Outlook White Paper.
“Deloitte Consulting has been cultivating China’s consumer market for a long time. The white paper provides an analysis of the predictable future development trends of the consumer goods and retail industry based on changes in consumer behavior and attitudes during the post-pandemic era and technological advancements. We hope to help consumer goods and retail companies deepen their understanding of consumers and the market, explore new consumer trends, and grasp the keys to winning in the market” says Woolf Huang, Deloitte Consulting China Clients, Industries, & Markets leader.
The insights of the white paper are based on the nationwide consumer survey data: This study was conducted in November 2022, using an online questionnaire, with respondents ranging in age from 18 to 73. The questionnaire covers consumer background information, consumer attitudes, shopping behaviors, lifestyles, interests, values, and more. This online survey sample set quota is based on the demographic structure data from the Seventh National Population Census, with a sample size of 2,000 covering 301 cities or autonomous regions from the 1st- to the 5th-tier in China.
Based on the analysis first-hand survey data, the 2023 China Consumer Insight and Market Outlook White Paper highlights five major trends for the consumer goods and retail industry in 2023. Michael Deng, Deloitte Consulting China Consumer Products and Retail, Wholesale & Distribution Industry leader, introduced the report.
The top 5 trends in consumer goods and retail
Return to rational consumption: In the aftermath of the pandemic, consumers have become more pragmatic and rational in their purchasing decisions, based on reduced consumption needs and increased economic pressures and life uncertainties. They have reduced impulse purchases, prioritizing product quality and value, taking advantage of promotions, and comparing prices across multiple sellers before making a purchase.
With much more information available, consumers are taking recommendations with a pinch of salt, making their own choices after careful research and comparison instead of blindly following trends. This shift in consumer behavior favors domestic brands, which are seen as more cost-effective and have a better understanding of Chinese consumer habits.
The pursuit of pleasing experiences: As people have become more affluent and product and channel options have increased, consumers today not only seek to satisfy their material needs, but also hope to achieve physical and emotional satisfaction and pleasure by seeking out pleasing experiences. Social attributes are now deeply embedded across the entire shopping journey, where consumers enjoy interactions at various stages such as information research, decision-making, and experience sharing.
Meanwhile, many consumers value bricks-and-mortar retail for its more transparent information, more intuitive and hands-on experience, and immediate access. They are increasingly concerned about the security of their personal information and are often frustrated with the current state of privacy protection, prompting them to take active steps to protect their privacy and interests.
Embracing diverse innovation: The rise of technology, changes in the social environment, and policy incentives have created fertile ground for business model innovation. A variety of new retail channels and scenarios have emerged this decade, ushering in the era of the “Now Consumer” who pursues new lifestyles and consumption habits, embraces innovation, enjoys trying new things, and is highly energetic and receptive. Live streaming, instant retail, and home leisure consumption have become popular trends in new retail channels and buying scenarios.
Deloitte Consulting’s research found that live streaming and instant retail are increasingly becoming the norm for consumers. The pandemic led consumers to passively adopt “home mode,” unlocking various opportunities for leisure consumption at home. Consumers have discovered the joy of these at-home activities and are pursuing them. The rise of the “home economy” could become a long-term consumption focus.
Being green and sustainable: China’s promotion of green and sustainable development, including its efforts towards advancing peak carbon and carbon neutrality, its participation in global climate change governance, and its pursuit of a harmonious relationship between society and nature, has led to widespread public acceptance and recognition of the concept of greenness and sustainability. This concept is also reflected in consumption patterns, as consumers are aware of the social responsibility associated with their consumption behavior.
Following the proposal of “promoting green consumption and establishing green, low-carbon production and lifestyle” by the 20th National Congress, consumers have increasingly incorporated the idea of greenness and sustainability into their consumption. Some consumers are also willing to pay a premium for green consumption, which is expected to remain a lasting trend for consumers as awareness and adoption of sustainable practices in consumption behavior continue to grow.
Pursuing technological advances: The past decade has been a period of rapid internet development, with continuous innovation in Internet technology, service forms, and business models. With the advent of the “new infrastructure,” the retail ecosystem is becoming more digitalized, intelligent, and efficient. The widespread adoption of the latest innovations in underlying technologies, such as 5G, cloud computing, IoT, big data, and artificial intelligence, is propelling advances in retail technology.
Chinese consumers exhibit strong curiosity and acceptance of new technologies and are eager to experience the convenience and innovations they bring, creating a positive feedback loop that drives even further advances in technology. For example, around 2015, the sharing economy began to boom, with shared bikes, power banks, massage chairs, and more entering the market. This highlighted the strong ability of the internet to allocate physical resources to meet consumer needs. Around 2016, visual media such as live streaming and short videos further enriched internet services, satisfying consumers’ entertainment needs while providing new business models for traffic monetization.
Today, mobile internet is widely popular, and the proportion of elderly internet users is surging. Consumers remain enthusiastic about new technologies and look forward to the maturation and application of the Metaverse.
Michael Deng says, “Based on the above trends derived from Chinese consumer insights, Deloitte suggests that to better serve consumers, consumer goods and retail companies should strive to capture shares of consumers’ time, minds, and wallets 24/7, both online and offline. We present the following recommendations for consumer goods and retail companies:< >
- focus on product value for money;
- lead with a strong value proposition and build brand trust to win recognition;
- build a brand’s private domain, lay out Omni-channel consumer operations, and create unique brand experiences;
- prioritize omni-channel integration to meet diverse consumer needs; and
- create an open business ecosystem that can adapt to changing consumer needs.”
< >Click here to download the full report.
Hashtag: #Deloitte
The issuer is solely responsible for the content of this announcement.
– Published and distributed with permission of Media-Outreach.com.
