China, like every other major economy, is facing an almost unprecedented set of challenges, with profound implications for the way in which consumers engage with brands. The world’s second largest economy has narrowly skirted a contraction in recent months, crippled by rolling lockdowns, skyrocketing youth unemployment, a deep property downturn and lacklustre retail spending.
A China Youth Daily survey in 2021 found that as many as 68 per cent of Chinese college students estimated they would be earning one million RMB (£120,000) within ten years of graduation. This optimism has been a key driver of retail and luxury growth globally, with Chinese Gen Z spending as a percentage of income far outstripping their international counterparts. To their surprise, what awaited them was economic collapse, unaffordable housing and 20 per cent youth unemployment.
This sense of despair has tipped over into frustration, with locals turning to social media to vent. Online forums talk of three possible antidotes to a gruelling 996 culture (working 9am to 9pm, six days a week) that fails to deliver on its promises. The first is to “touch fish” (mo yu), to carve out me-time at work as part of a “lying flat” (tang ping) lifestyle.
The second is to simply “let it rot” (bai lan), to give up entirely on the rat race and withdraw to a simpler life. The third is to “run”, a transliteration of the English word, as educated and sufficiently well-off young professionals consider emigration as a way of escaping a situation that offers few immediate prospects.
This burnout culture has given rise to a host of consumer trends. Rural livestreamers compete with tang ping idols such as Lelush for the attention of people desperate for a sense of escapism, while brands fall over themselves to provide outlets for pent up frustration and relaxation.
An elevated consciousness of the lived environment is fuelling increased awareness of sustainability issues in a way that until now was not mainstream. Niche and quiet luxury brands are breaking through as vehicles of self-expression that depart from established shopping conventions.
In this increasingly complex consumer space, companies should be taking the time to invest in three core areas. First, “China literacy” has never been more important. Shifts in Chinese policy or consumer sentiment have ramifications far beyond the country’s own shores.
Secondly, teasing out local relevance of your global identity and values has become a must-have for successful consumer strategies as consumers demand more from their interactions with companies.
Thirdly, as competition increases, brands must source opportunities for breakthrough growth, whether in collaborations, emerging content commerce or through captive audiences of consumers here at home.
Despite, or perhaps due to the challenges outlined above, China remains one of the most exciting and rewarding markets in the world for brands willing to adapt and evolve.
