Western fashion brands fail on China's millennials - Shaun Rein

China's millennials are increasingly defining the country's consumer space, and Western fashion brands fail to appeal to them, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order, to the South China Morning Post. Brands like Marks&Spencer failed because they focused on the middle-class, he says.

The South China Morning Post:

The London-based retailer struggled to make a mark in China’s high-street fashion scene, despite a growing retail market in China and a fondness from consumers towards many other traditional British brands. 

“One of their problems is they tried to sell to a middle-class consumer by creating middle-class brand positioning,” says Shaun Rein, managing director of China Market Research and author of The War for China’s Wallet: Profiting from the New World Order. “Most brands that do that in China fail.” 

Marks&Spencer failed to cater to consumer tastes by offering styles that were too “middle class, suburban, UK housewife”, Rein says. Sizes for Asian body types were also not considered. Meanwhile, at locations such as Marks & Spencer’s brick and mortar stores in Beijing and Shanghai, Chinese consumers could go right next door to H&M to shop the youthful and more on-trend styles that reflect one of China’s biggest emerging markets: millennials. 

Another problem for Marks & Spencer is how Chinese shoppers perceive value. Rein says Chinese consumer behaviour is defined by what he calls the “CMR Hour Glass Shopping Model”, meaning they shop both at the top and the bottom of the spending scale. 

“Anything that’s not great value – it doesn’t give them prestige, it doesn’t give them status, it’s not an aspiration – is something that Chinese don’t want unless it’s dirt cheap,” he says. “So they’ll go out and buy very expensive lipstick but they’ll buy the cheapest garbage bags because they don’t want to spend money on garbage bags. 

“Things in the middle like Marks & Spencer or Macy’s just sort of die because their products are not cheap, but they’re not good enough value either.”... 

Macy’s, meanwhile, is still in China in a partnership to sell through Tmall that started in 2015, even though it has been struggling with brand positioning and product assortment and had to cut short its first attempt at launching an online point of sale in 2012. 

“It is a great retailer in the US, but the name had no resonance here,” Rein says of Macy’s. “And it was selling Ralph Lauren – but you can buy Ralph Lauren directly here, either online or in stores, so what’s the point of going to Macy’s for Ralph Lauren?”

Marketing and advertising are also critical for a company’s long-term success, Rein says, and he thinks many brands can do a lot better. 

“They go to the same five celebrities too often,” he says. “They all go to Jackie Chan, to Zhang Ziyi, to Angelababy, so the problem is you have these guys that are representing 10 or 20 different companies, but consumers don’t know who they’re representing any more. They might affiliate them with one brand and one brand only.”

More at the South China Morning Post.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.

The future of China's millennials - Tom Doctoroff

Tom Doctoroff

A new generation is emerging to set their mark on China. Marketing veteran Tom Doctoroff looks at the relative newcomers, and how they differ from past generations, for state-owned TV station CGTN. "Post-90s are proudly patriotic, they want to see a strong China,” he says.

CGTN:

Tom Doctoroff, senior partner at brand and marketing consultancy firm Prophet, refers to the Post-90s generation as being pragmatic “doers.” And there is a reason for why this group of millennials plays stock in the here and now, he says. 

“It’s a double-edged sword, because on one hand they grew up in a period of rising affluence. But they also became adults in a period of economic insecurity, so they don’t have a hundred percent faith that the future is going to be stable.” 

And if this group of millennials ends up taking a role in government? How will they lead? 

Doctoroff says one can take comfort in the fact that the structure of Chinese society is as it has always been, and because of this, millennials respect it and its authority. 

“China is still a Confucian society, the relationship between the individual and society is not fundamentally changing. So nobody’s looking to blow up the system,” he says. 

That said, what this new connected generation can bring to the leadership table is balance, driven from their international experiences, Doctoroff says. He expects this group to bring about further reforms in the service sector, and also hopes that they can bring about a more flexible and responsive government. 

And this is where Chinese millennials differ slightly from that of the West – where millennials there are profoundly individualistic and think they are the basic unit of the society, Doctoroff says. 

“So people are trying to navigate the system here [in China] as opposed to American millennials where they are trying to shape the system so it’s really quite different.”... 

In a nutshell, Doctoroff says the interests of China’s New Era and its new generation of Chinese are aligned, citing the post-90s as an increasingly patriotic generation. 

“I think Chinese patriotism in this New Era is only going to grow, but I also think the Chinese are pragmatic; they don’t want to take over the world,” he says. 

Doctoroff commends the government’s efforts in their focus on innovation and the Internet plus strategy, citing China’s economic development program as something that is already liberating the creative energies of many. 

However, he says that there are too many technological barriers for young Chinese to discover the world and truly engage with it. 

“And I think that this is a mistake because again the millennials, post-90s are proudly patriotic, they want to see a strong China,” he says. 

“I do not think there is a risk that there’s going to be a rebellion, if say, Facebook were available, or if they could read the New York Times via a virtual private network. So I do think it’s time to loosen up a little bit without losing control,” Doctoroff adds. 

That being said, he has a question for this generation of millennials. “How much of this is a life-stage – the fact that they are currently young, relatively free, unmarried – and how much of this is a true generational shift?” 

Doctoroff says he is not entirely certain that this group can keep up with their passion as they enter the next stage of life, for instance getting married and having the burden of caring for a family, as well as the financial burden of owning an apartment. 

“Can you stop the urge to reinterpret convention based on your own passion, as the demands of survival and  living reassert themselves? That, I am not a hundred percent sure,” he says.

More at CGTN.

Tom Doctoroff is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

A booming "she economy" - Ben Cavender

Ben Cavender

Milleniums, especially women, are key for consumer spendings, says retail analyst Ben Cavender at Reuters on Women's Day. Companies went all out to attract the female buyers, he says.

Reuters:

The women-targeted market, or the so-called “she economy”, a term coined by China’s education ministry in 2007, is expected to account for $700 billion by 2019, according to the Chinese securities firm Guotai Junan. 

“If you look at how companies are thinking about their ad spending, how they think about product selection, probably they are thinking, 70 to 75 percent of our spending really needs to be targeted directly at women,” said Ben Cavender, Shanghai-based principal at China Market Research Group. 

Women spent 64 percent more in 2017 than in 2015, with a majority of purchases made in major cities such as Beijing, Shanghai and Guangzhou, according to a report by Alibaba, which controls the largest share of retail e-commerce sales in China.

Purchases were more than cosmetics and shoes. 

The number of women who bought running outfits rose over 13 times in the last 12 months, while spending on boxing gloves by women soared 75 percent, according to a separate Alibaba report.

More at Reuters.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more consumer experts at the China Speakers Bureau? Do check out this list.

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How young consumers have become different - Jeffrey Towson

Jeffrey Towson

The first wave of Chinese consumers has always been hard to get: prudent, and worried about their future. Beida business professor Jeffrey Towson describes at his weblog how the millennials have become an altogether different breed of consumers. On brand loyalty, emotion and confidence.

Jeffrey Towson:

There are approximately 200M Chinese between 15 and 24 years of age. They are about 15% of the population and have, by and large, been raised in abundance. Unlike previous generations, most have no memory of hunger or extreme hardship. They have mostly grown up in modern apartments with modern conveniences. 

They are a very different and pretty awesome group. Here are three ways they are different: 

1. They are more brand loyal than other middle class Chinese consumers. They are also more interested in trying new products. 

2. They are more emotional (in terms of buying) and less concerned with being frugal. If you are focused on up-trading consumers, this is your group. 

3. They are really confident about their own financial futures. This group is super-confident and that enables spending. 

Basically, this is the demographic the whole world has been waiting for: emotional, confident, big- spending Chinese consumers. They are also the demographic that is most similar to consumers in developed economies.

More at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

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