Understanding Urban Millennials, Gen Z and the Opportunities They Offer
In 2019, millennials (people born between 1980-1994) and generation Z (those born between 1995-2009) accounted for almost 40% of the population in China and the proportion of the total population living in urban areas was around 60% and is projected to reach 65% by 2025.
The changing demographic landscape and population trends in China have put this specific consumer segment in the spotlight, urban millennials and generation Z, which together represent one of the most critical forces shaping the outlook for the Chinese consumer market. Their attitudes towards digital convenience, shopping preferences and lifestyles are driving growth in certain sectors and providing new market opportunities.
Urban millennials and generation Z were born and live in a different socioeconomic environment to their parents and previous generations, with more opportunity to benefit from the economic growth of China. Their distinctive characteristics include a pride in domestic brands, a strong attachment to smartphones, a willingness to pay extra for premium or smart products, spend money on ‘self-entertainment’ activities and search for high-quality products, for babies and pets in particular.
Our report ‘How Chinese Urban Millennials and Gen Z Live and Spend’, helps local and global businesses understand Chinese urban millennials and generation Z to seize the market opportunities they offer, focusing on three key themes and 8 trends that are critical when profiling this distinctive and important consumer segment:
1. Ubiquitous Digital Convenience
• Living on Smartphones
• “Keeping Up with Influencers”
• Comfort and Convenience in the Home
2. Developing Shopping Preferences
• Premiumisation: A Tale of Two Groups
• Redefined “Made in China”
3. Modern Urban Life
• Pets as Family
• Advanced Parenting
The impact of Coronavirus (COVID-19) has also led to some new opportunities to attract Chinese consumers. Companies that are considering entering China or expanding their presence in this market strategically should consider the above themes and trends to better prepare for the post-pandemic era.
For example, when the trend of “Keeping Up with Influencers” is put in the context of COVID-19, new marketing techniques to engage with consumers such as social media campaigns and live-streaming as well as increased ecommerce penetration are expected to be more popular in various industries as a result of consumers staying home more often throughout the pandemic.
Effective live-streaming should involve comprehensive product showcases and real-time interaction with consumers, leveraging recommendations from key opinion leaders or influencers and with exclusive discounts to attract more consumers. Omni-channel marketing is essential to attract consumers’ attention in the digital age and greater emphasis should be placed on WeChat mini-programs, short videos and live streaming as they are important purchase channels, especially for apparel and footwear and beauty and personal care players.
For more detailed analysis, download our report “How Chinese Urban Millennials and Gen Z Live and Spend”.
Leo Chen, Senior Analyst
Kelly Tang, Senior Analyst
Miranda Zhou, Senior Analyst
Mia Chen, Research Associate