As the world’s second-largest economy and a significant player in the global market, understanding the trends in Chinese consumer habits is crucial for Belgian companies. While China’s domestic consumption is still at a lower level, in the post-pandemic era there is a clear change in consumer habits. Unlike before the pandemic, today Chinese consumers are making more considered purchases. But that doesn’t mean that China is no longer an interesting market for Belgian exporters. With a population of more than 1.4 billion people and a consumer pool of roughly 900 million customers, China still is a potential market which cannot be ignored. However, maybe even more than before, the key lies in understanding how consumer behavior has changed since the pandemic.
Being foreign alone is not enough anymore
While disposable income and the middle class continue to grow in China, Chinese consumers are becoming more conscious of their spending habits. Some brands have responded by focusing on ‘premiumization’, offering a product that is perceived to be of higher quality – and often with a much higher price – to demonstrate value. But demonstrating value will likely not be enough anymore to attract the modern Chinese consumer. The days of relying on a product simply being foreign or expensive to attract Chinese buyers are long gone. Now, consumers are balancing quality, cost and a long list of requirements before even considering making a purchase.
Different than before, today’s Chinese consumers don’t necessarily think that foreign brands are better than Chinese brands. Chinese middle-class consumers are still looking for brands that come across as knowledgeable, of high quality and with a long history and heritage, but in recent years they also want to see that the brand owner understands them and adapts to China’s traditions, society and place in the modern world. And that’s where the problem often starts: many foreign brands are not aware of what Chinese customers are looking for. Today’s Chinese consumers are much more sophisticated and demanding. They are no longer satisfied with generic products; but look for unique and high-quality offerings that align with their personal values and aspirations. Successful brands have found ways to marry the ‘domestic traditional’ with the ‘international modern’.
Growing importance of lower-tier cities
The demographic landscape in China is also changing. Urbanization continues to reshape the market, with the urban population representing approximately 705 million people, about 65% of the entire Chinese population. Urban consumers tend to have higher disposable incomes and are more exposed to diverse products and services, driving demand for luxury goods, advanced technology, and high-end experiences.
Most consumption comes from first and second tier cities, such as Beijing, Shanghai and Shenzhen. However, so-called lower-tier cities in China are gaining increasing importance for foreign brands, as a large portion of urban Chinese individuals live in second-tier cities or below. Entering these markets requires thorough research as their needs differ significantly from larger cities.
There is no such thing as ‘the Chinese consumer’
It is crucial to understand that different age groups have distinct preferences and requirements. For example, the elderly segment is growing rapidly, creating a demand for healthcare services, senior-friendly products, and leisure activities tailored to older consumers. Meanwhile, the younger generation, particularly millennials and Gen Z, are emerging as influential consumer groups. They are generally better educated, tech-savvy, value-driven, and more inclined towards experiences over material possessions, influencing trends in travel, entertainment, and digital services.
Intensified digitization
Finally, the pandemic accelerated the shift to online shopping, as lockdowns and social distancing measures pushed more consumers to rely on digital platforms for their needs. Even as restrictions eased, the habit of online shopping has persisted, with many consumers appreciating the efficiency and convenience it provides. Additionally, the integration of social media with e-commerce, known as social commerce, has become a dominant trend. Platforms like WeChat and Douyin (TikTok) enable seamless shopping experiences through live-streaming and in-app purchases, fostering a new era of impulse buying and brand interaction.
In conclusion, the changing landscape of Chinese consumer habits presents both challenges and opportunities for Belgian companies. Understanding the nuanced preferences and expectations of a more sophisticated and demanding consumer base is critical. Emphasizing quality, cultural relevance, and adapting to the dynamic digital environment will be key to capturing this evolving market.
Please contact the Belgian-Chinese Chamber of Commerce (BCECC) in case you need more information.