China's consumption market in solid expansion with emerging trends

NICHE MARKET

While it continues to expand, the Chinese consumer market is now more accurately divided, based on the diversified demand of various consumer groups, creating new opportunities in niche markets.

For example, in the first-tier cities, the "smart buyers" group mainly consists of middle-aged women seeking cost-effective deals, while people in the "frugal youth" group tend to cut out all unnecessary expenses.

Wealthy families in small cities and towns focus on high-end products, while the "delicate moms" pay more for entertainment, healthy diets, cosmetics and garments.

"Driven by new consumer groups who pursue fashion, health, leisure and quality, a more personalized, diversified and multi-layered consumption market is forming at a faster pace," said Chen Wenling, chief economist with the China Center for International Economic Exchanges, noting that the growth of the groups will contribute to promoting new consumption forms and reshaping consumption values.

GENERATION Z

Generation Z, a typical consumer group consisting of youngsters born in the 1995-2009 period, has drawn special attention, growing into a major category of buyers in the country.

A report from the consulting firm Ernst & Young shows that this group views products in more dimensions and pays more attention to diversified and individualized experiences.

With a distinct personality and strong demand for a happy life, Z-ers are willing to pay for their interests, prefer things with a better appearance and cultural value, and welcome services that help them save time and labor. Their demand has boosted a number of new sub-sectors, such as health food, game and video services, intelligent home appliances and internet celebrity brands.

"SILVER-HAIR" ECONOMY

A report released by the consulting firm McKinsey & Company has underlined the power of elderly consumption, anticipating that the number of over-60s in China will increase by 45 percent, accounting for around one-quarter of the country's population by 2030, with the consumption of this group increasing by about 150 percent.

The pandemic changed the lifestyles of seniors, causing many to be stranded at home and active on the internet.

Data from JD.com shows that online shopping by elderly internet users increased by 4.8 times year-on-year in the first three quarters of 2021, with more and more elderly people purchasing electronic products, daily necessities, and travel and health services like physical checks online.

In China, a minimum of two-thirds of seniors are expected to be online by 2030, according to McKinsey. As the country strives to address the "digital divide" among the elderly, the "silver-hair" market is expecting a rosy future.

McKinsey's senior partner Daniel Zipser, believes Chinese consumers are at the forefront in terms of the acceptance of new technology and demographic and consumption behavior changes, commenting that "these changes are likely to reshape the global consumption market."