China’s Super Consumers summary

It’s no secret that China is rapidly developing in terms of its economy, culture and technology. In fact, transformations that typically occur over five to seven years in more developed economies can happen in just a year in China. And this difference is even more pronounced in the world of e-commerce.

For instance, according to a recent study conducted by the magazine Focus Money, in China, shoppers make 8.4 online purchases per month compared to just 5.2 in the United States, 4.3 in the United Kingdom and 2.9 in Germany. Not only that, but China now has more online shoppers than the United States has inhabitants!

So, China is now the world’s largest consumer market, which means foreign firms need to reassess the outdated idea of China as a mere mass producer of low-quality products. More specifically, rather than focusing on manufacturing and exporting their goods to China, foreign companies need to incorporate the six megaprocesses of the supply chain into their strategy. These are planning, buying, making, storing, distributing and selling.

One company that has been exceptionally successful in this regard is the Italian luxury apparel firm, Ermenegildo Zegna. While Zegna enjoyed healthy profits in China in the past, it was only by adapting its entire supply chain strategy that the firm became the single best-selling luxury men’s clothing line in the country.

The first ever Chinese television commercials for cars aired in the 1980s, employing a standardized and boring format; the ads featured a photograph of a car against a blue background with text to the effect of “We are now selling Toyotas. Please call this number.”

It’s difficult now to even imagine such ads and, in the current climate, Chinese marketing couldn’t be more different. Today, finding the right message for your target audience is essential, and when it comes to marketing in China, there are a few key things to keep in mind.

Chinese consumers now make up over one-quarter of all luxury purchases worldwide. That means one out of every four luxury watches, handbags, cars and necklaces makes its way into the home of a Chinese consumer.

To break this incredible volume of purchases down, you can think about Chinese luxury consumers as belonging to three distinct groups, each with different purchasing habits.

A mere decade ago, the Chinese government only allowed its citizens to travel to a handful of other countries. Today, things are different. Chinese nationals regularly board flights to over 150 nations worldwide, and this explosion in Chinese tourism naturally implies new opportunities for foreign travel companies.

For instance, in 2001, under 10 million Chinese citizens traveled to foreign countries. By 2014, that number had grown to 100 million, and it’s estimated to reach 200 million by 2020.