Mintel identifies four key Chinese consumer trends for 2017

Looking ahead to 2017, Mintel’s APAC research director, Matthew Crabbe and Manager of Trends APAC Delon Wang discuss the four key Chinese consumer trends set to impact the China market, including implications for both consumers and brands.

MITIGATING FUTURE SHOCK

Decades of rapid economic development and social change are now slowing. People are changing priorities to adapt to China’s “new normal”.

“Chinese consumers are taking a fatalistic approach of late, and have worries about job prospects, environmental pollution and health concerns. Recently, consumers are showing renewed faith in the old. Indeed, according to Mintel Global New Products Database (GNPD), claims including “ancient” on product packaging went up by 56% in the first half of 2016 versus the first half of 2016 across all new product launches in China’s food and drink and beauty and personal care categories.”

“Parents are continuing to put their focus on investing in their futures, in their kids, health and longevity. According to Mintel research, 70% of consumers prefer buying drinks specially designed for their kids than buying regular drinks, and well over a third of parents would like to see more ready meals specially designed for kids. Meanwhile, people really have more demands on health, Mintel’s report reveals that nearly half of consumers would like to see more vegetables in ready meals, and one quarter would like to see more vegetarian ready meal options. The number of vegetarian ready meals is also rising: 45% of consumers agree that juice with plant protein or vegetables is healthier than pure juice.”

“Consumers are also becoming entrepreneurial and finding new ways to make money to buffer against potential economic recessions and are increasingly interested in the selling economy and value subscriptions. Monthly or yearly membership is the traditional payment model in the fitness, beauty, online media streaming, museum and telecom sectors, and has been gaining momentum in the cinema and airlines sectors. According to Mintel’s research, over half of middle class consumers claim to have enjoyed the benefit of getting a bonus for recharging their card when going to gyms/sports centres (52%) and beauty/hair salons (56%). However, as more consumers become used to such models, Mintel predicts that they will come to expect the same from other categories, such as food services, fashion and retailers, especially among middle class consumers (68%) who are more likely to be loyal to brands they like, compared to consumers overall (50%).”

“Cautious optimism and careful planning will be watchwords in 2017. Brands will have to offer consumers more than just convenience, but also more future-planning and support, and increasingly emphasise their ethnical and cultural authenticity.” said Delong Wang, Manager of Trends APAC at Mintel.

FUTUROPOLIS

Rapid rebuilding of cities and repairing environmental damage is driving new technologies to enter and shape people’s living environments.

“People are looking for smarter, smaller and more efficient appliances for their homes to improve space efficiency. New transport technologies are being adopted as people see the environmental, as well as economic, benefits. According to Mintel research, 87% of urban Chinese consumers who planned to buy a car in 2016 said that they would consider buying new energy cars, compared to only 3% who said they definitely would not.”

“More smart devices are already entering into people’s homes and they are increasingly adopting the Internet of Everything. As the population ages, more efficient homes and services are needed to better serve the needs of an aging population. The use of physical space is also changing, with pop-up stores adapting to dynamic city environments, while traditional retail formats adapt to the fast-paced, constantly changing excitement of urban living.”

“Efficiency, sustainability and ergonomic design will be key areas driving future city design. China’s cities will be the focus for innovations in new building design, integrated urban planning, new transport and vehicle adoption, use of delivery drones and integration of online into retail, leading to smaller, more community-based stores.” said Matthew Crabbe, research director of APAC.

I, CYBORG

Leap-frogging adoption is placing new technologies rapidly and more deeply into more consumers’ daily lives.

“Alternative payments, artificial intelligence and automated services will see a lot more development over the next year. There is a growing sense that anything is possible, an expectation of efficiency, a desire for customisation within boundaries, a rising acceptance of new technology, and robots are everywhere!”

“Mintel research shows that 60% of Chinese consumers used Internet pay-by-credit service in 2016. What’s more, third-party online payment services, like Alipay Wallet and WeChat Wallet, have become the No.1 payment method in China after cash, while mobile app payment ranks second with 65% usage. In comparison, the usage rate of credit cards is below 50%, while that of near field communication (NFC) payment is only 12%.”

“Meanwhile, China is already getting comfortable with the idea of robots taking over menial functions in daily life, including foodservice operations and robot journalism. China’s skies are also rapidly being populated by various kinds of civilian drones. While robots and drones are already finding their way into more aspects of Chinese consumers’ (and companies) lives. As more of their daily lives become automated, consumers will utilise the greater spare time afforded to them by taking up new pursuits.” said Matthew Crabbe, research director of APAC.

ALTERNATIVE REALITIES

The stress of fast-paced living is creating demand for technologies that enhance quality of life and provide channels of escapism.

“Growing affluence is driving innovation in application and uptake of virtual reality (VR) and augmented reality (AR) technology. Consumers are already using VR devices to choose where they go on vacation. Thanks to increased adoption, consumers expect greater levels of interaction and free play.”

“Virtual reality and electronic media are increasingly finding new applications and adoption for new tasks in China. This is helped along thanks to a population eager to adopt new things, having become used to continual change. We are already seeing retail companies experimenting with the concept of virtual supermarkets. This is bringing consumer engagement into the realm of online gaming-style play, augmenting the interaction with brands.”

“VR is rapidly helping to grow try-before-you-buy services, which could increase customer satisfaction and reduce returns, and is likely to lead to more of a modify-before-you-buy concept. What is lacking up to now is content. Developing new VR content will be a key area of new development, from movies to games to brand campaigns.”

“The development and adoption of VR in China has been rapid and world leading. But the full range of potential applications of this technology is only just beginning to emerge. We are likely to be spending a lot more time in the virtual world, doing virtual things with virtual people.”said Delon Wang, Manager of Trends APAC at Mintel.

Interviews with Matthew Crabbe and Delon Wang, press review copies of Mintel’s China Consumer Trends 2017 and images are available on request from the press office.

Mintel’s China Consumer Trends are available to download here.