New trends in Chinese Consumer Behaviour in 2023 - PayXpress

New trends in Chinese Consumer Behaviour in 2023

5 min read

As we enter 2023, major agencies have already published studies on China’s consumer behaviour patterns and trends in 2022. These trends can provide much insight for overseas businesses. With the reopening of borders by China, Chinese tourists will soon return to Europe. For overseas businesses who wish to expand or maintain their business in China or for European merchants who want to attract Chinese tourists, it is essential to understand the changing trends of Chinese consumers to design marketing campaigns accordingly to attract consumers.

Take a look at the trends conducted from these reports.

1. The middle class continues to rise in numbers

The number of middle and upper-class households in China continues to rise, with annual incomes reaching RMB 160,000 (EUR 21 847). Middle- and upper-middle-class families are expected to increase by 71 million within three years. The increase in the number of middles- and high-income households will also mean that more and more families will have greater spending power.

2. Consumption becomes refined, and consumers still prefer high-end brands

The report notes that even during the epidemic, Chinese consumers were still very fond of buying brands and that the level of consumption did not decrease with the economic pressure. In fact, higher-income earners were spending more on all fast-moving categories. For example, 37% plan to increase their spending on foreign alcohol, 35% on sports drinks and 32% on fruit juices. Respondents indicated that they are experiencing an upgrade in consumption, preferring more premium brands in categories such as their health and appearance (products such as skincare).

3. Keeping the same taste of consumption but looking more actively for promotional information

Consumers are not lowering their consumption level, but prefer to maintain a high quality of shopping while actively seeking the best purchase channels. Consumers use WeChat groups, group buys, coupons, etc., to get the best prices or promotions to get the same products at a lower cost.

4. Consumers are more aware of the product parameters and will learn about the product features before buying.

The rise of social media, live streaming and short videos has allowed more consumers to learn about products quickly and easily. Consumers will rationally analyse detailed product parameters or ingredients before purchasing. For example, when buying a skincare product, they will look in detail at the ratio of each ingredient and its effectiveness.

5. Live video streaming can shorten the time for consumers to decide

In 2022, the hottest thing in China was “live shopping”, which allowed consumers to see the product be tested or introduced by the host in the live room and decide if the product meets their shopping needs. The average Chinese consumer spends 2 hours a day on short-form social media, and 60% of people interact with video at least once daily.

Key Opinion Leaders can use their influence to win consumers’ trust and share their experience through their unique insights into the industry. The product promotions offered in the live streaming room are immediate in nature. Consumers watching live shopping in the live room are attracted by the instant promotion information, which encourages them to place orders immediately.

6. “A buyer is also a sharer.”

As consumers become more rational in their purchases, the options for goods are also becoming more diverse. This has also led consumers to buy goods to meet basic needs and pursue a heartfelt lifestyle by sharing their shopping experiences and opinions on social media platforms. This phenomenon is even more evident in the performance of the new generation, who are more eager to share and curious. In terms of consumer understanding, more attention is paid to emotional interaction and value recognition. During the New Year, the number of XiaoHongShu posts about travel increased by 70% compared to the same period, with consumers going to social media to find the opinions shared by other users before making a purchase. Sharing-based social media can play a more significant role in consumer purchase decisions.

How to make your business adaptable to the change in Chinese consumer behaviour

These are some of the changing trends in Chinese consumer behaviour that both overseas merchants and merchants with a presence in China need to be aware of to better develop a range of marketing campaigns.

Last year, many industries were under pressure due to covid, resulting in Chinese consumers being unable to meet their consumer needs. 2023 will see the recovery of major consumer entertainment sectors and tourism. Chinese consumer demand will further rise, while demand for overseas travel will gradually recover to pre-epidemic levels or even rise.

According to McKinsey’s 2023 China Consumer Report, the middle and upper classes are rising and will be the primary consumers of overseas travel and shopping. At the same time, more people are spending their fragmented time watching or viewing shared posts or short videos. Vertical KOLs strongly influence consumers’ purchasing decisions in shared social media. This is also a new opportunity for European businesses to put their product or service information and purchase options on more social channels, such as WeChat and XiaoHongShu, build brand personality and awareness and offer different combinations of promotions to attract consumers’ attention and help them make purchases at the same time.

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