Unlike the US and many other Western countries, China’s cultural stigma against used things has prevented the majority of car buyers from purchasing used cars in the past. Is the chip shortage “chipping” away at these long-held beliefs? It appears so. Second-hand car transaction data released by the China Automobile Dealers Association shows that in the first half of 2021, a total of 8.4342 million vehicles were traded in the second-hand car market, a year-on-year increase of 52.89%.

Altering the “Must Buy New” mentality among younger generations

As we mentioned above, “new” plays an important role in Chinese traditional concepts. Wearing new clothes for bring in the New Year, buy a new house when getting married, if you pay attention, you will find that “new” often appears in the Chinese language. Clothing rental platforms have struggled to take off, and while gaining some momentum, thrift stores are nowhere near as popular as they are in the US. Therefore, in order for China’s used car market to become more mainstream, the first thing it needs is to defeat the “new is better” tradition.

As Gen Zs consumers gradually enter the market and become the main consumer group, the traditional concept of “buying new and not buying old” is being eroded. In contrast to previous generations, contemporary young people pay more attention to value for money, making them more open to buying second-hand. A great example of this is the second hand marketplace app Xianyu, which has become quite popular among Gen Z consumers.

While young consumers’ attitudes towards used things may already be changing, when it comes to cars, the shortage of new vehicles may be accelerating this shift.

Supply and demand imbalance brings business opportunities for China’s used car market

The market is mainly composed of two parts, supply and demand. Opportunities arise when demand exceeds supply. Affected by the global epidemic, a large-scale chip shortage in the automotive industry has led to a decline in automotive production capacity. On average, a semi-conductor disk needs 3 month to “age” if not longer. On top of a chip shortage, other factors like the supply chain back ups and covid lockdowns in China and the Ukraine war shutting down factories, are further delaying new cars from rolling down the assembly lines.

However, the market demand did not decrease with the decline in the supply of new cars, so consumers have been forced to turn their attention to the used car market.

In addition to the supply and demand gap caused by the decline in production capacity, the reduction in income caused by lockdowns in China and a sluggish job market have also lowered many consumers’ budgets for a new car, but it did not decrease consumers’ expectations.

While there is a stigma against used cars in China, consumers are also worried about appearances. In the “face” driven Chinese culture, a vehicle’s brand is very important. To many people, a used Audi is still better than a brand new Toyota. With this mentality, many Chinese consumers are finding themselves in the used car market.

Policy changes and digitization promoting market development

In addition to the market opportunities brought about by the imbalance between supply and demand, the introduction of favorable policies has also contributed to the development of the used car market.

On the one hand, the cancellation of the relocation restriction policy has made the transaction and circulation of used cars more efficient. In the past, considering the pressure of environmental protection and complicated procedures, local governments usually restricted the inflow of second-hand cars from other provinces, which made it difficult for the second-hand car market to circulate throughout the country. The cancellation of the relocation restriction policy not only increases the circulation rate of used cars, but also further improves the value of used cars.

On the other hand, the reduction of value-added tax on used cars has also reduced the financial pressure of dealers to a certain extent and promoted healthy competition in the industry. Since personal transactions can be exempted from VAT, many used car dealers choose to conduct transactions through “scalpers”, which results in an overall VAT burden well below 2%. The reduction of value-added tax makes the tax burden fairer and healthier development of the market.

What’s more, online apps have also provided a platform for used cars, so that used cars are no longer confined to the small trading market, but can be noticed by more consumers through the Internet.

More information

The post Will the Global Chip Shortage Rejuvenate China’s Used Car Market appeared first on China Marketing Insights.

How does Jiao Xia tap into this lucrative market in China? What are some of the key takeaways brands can learn from its success?

About Jiao Xia

Jiao Xia was founded in 2013. It specializes in sun-protective items, including umbrellas, hats, gloves, jackets, and shoes.

The brand grows wildly. From its prospectus, it managed to achieve annual revenues of over 380 million RMB, 790 million RMB, and 2.4 billion RMB from 2019 to 2021. With a gross profit rate of over 50%, Jiao Xia has become a vanguard in the industry.

Tap into the Hard Sun Protection Trend

“Hard sun protection” or physical sun protection is a trendy concept among Chinese girls, thanks to the education finalized by many online publications. It delivers the message that physical items, such as umbrellas, hats, and gloves, are better at preventing sun than sun cream.

With growing awareness of physical sun protection, China Insights Consultancy estimates that the market scale of sun-protective clothes grows from 45.9 billion RMB to 61.1 billion RMB from 2016 to 2021. It is expected that by 2026, the number will reach 95.8 billion RMB in China.

Jiao Xia has met its golden growing period when anxiety and solutions both exist in the market. Most Chinese consumers want to have fair skin and they’ve been educated to embrace the hard sun protection. Jiao Xia, an expert specializing in sun-protective products is there to solve their issues.  

Dare to Change Hero Products  

Sun-protective umbrellas have been Jiao Xia’s hero products for a long time. It is sold at 179 RMB, not cheap in the China market, but with its creative paintings on the umbrellas, a UPF (Ultraviolet Protection Factor) above 50, and its carriable size that can be easily put in a pocket, it wins love from many Chinese girls. Based on Jiao Xia’s Tmall statistics, the brand sold more than 4.5 million umbrellas.

What makes the brand continue to grow is that it doesn’t stand where it was but keeps exploring new opportunities. It sounds cliché, but in practice, not many brands dare to lower the contribution percentage of a lucrative business section to their annual revenues.

In 2019, it introduced new product categories, including sun-protective face masks, jackets, and hats. Moving to 2021, the brand expanded its business to a broader range, such as sunglasses, leggings, and Martin boots.

With new product categories, the contribution of the umbrella has gradually decreased from 86.9% in 2019 to 20.8% in 2021. What replaces the umbrella’s iconic position are clothes and accessories (sunglasses, face masks, and gloves), with growing percentages from 0.8% and 5.3% in 2019 to 29.5% and 25.4% in 2021 respectively.

Use Numeric Facts to Convince Consumers

According to Jiao Xia’s prospectus, the brand has worked with more than 600 KOLs by 2021, among which 199 of them amass over 1 million followers. Together they brought over 4.5 billion traffic for Jiao Xia on the Internet.

Since the prices of Jiao Xia’s products are higher than the average, KOLs often tell the brand’s stories from different angles based on their follower’s profiles. Jiao Xia also scientifically frames its products with hard facts, such as its competitive UPF index, reports from professional assessment organizations, and customers’ feedback.

Our Thoughts

Spotting the trend and leveraging it to expose the brand name and keep introducing new products to satisfy the market’s ever-changing needs secure Jiao Xia’s position in the China market. The brand also has KOLs to tell its story and uses numeric facts to convince consumers.  

With growing numbers of players in the sun protection industry, it requires more for brands to stand out and let consumers see them and try them.

The post How Does Chinese Brand Jiao Xia Tap into The Sun Protection Market In China? appeared first on China Marketing Insights.

Unlike in western countries, pet-friendly employers are not common in China. The culture of pets in the workplace is forming, and the related management system is not ready yet. Because of this, when pets are with humans in one place, the relationships among accompanying, management, and work create a series of new stories.

Why Do Employees Bring Pets to Office?

The phenomenon is mainly seen in some Chinese Internet companies, such as Bilibiil and Little Red Book. It’s a great honor to be hired by those companies, but the downside is that employees often have to work extra hours. It has become common for them to leave the office after 8 pm.

Because of the long working hours, many people can only watch their pets through CCTV applications on phones. Some rent houses near their offices so that they can go back home to feed pets during the lunch break.

The Pros and Cons

A tip for brands: being a pet-friendly employer has become a competitive factor in attracting talents in China! But it’s not always brownie points.

Pros

Compared with worrying about pets being alone at home, having them around and seeing are easier for pet parents at work. In some way, it helps to improve work efficiency.

Uban, “Chinese WeWork” exclusively for Internet companies, carries out research (办公室宠物报告) among 10 companies. It is found that 38% of employees feel that by bringing pets to offices, their working pressure can be eased, while 36% think it is good to keep their pets accompanied. The research also shows that pets at the office increase chances for colleagues to communicate with each other, which accounts for 15% of respondents.

Cons

Since taking pets to workday is just at its kickstart stage in China, there are issues to be addressed.

For example, what pets are allowed for employees to bring to offices? Dogs and cats are accepted. But what if your colleague brings a spider with dark furry tentacles to their seat? A user on “Chinese LinkedIn” Maimai(脉脉), complained that after his colleague brought a spider to the office, he would rather message him than go to his seat to discuss work.

Another issue is transportation. Since public transport doesn’t allow pets, options left for people are limited. If they live close to offices, they can walk. But if they need to hail a taxi, that’s big trouble. Many drivers don’t want to have pets in car, and as a result, it might take them half to an hour to get a car. And don’t forget that some people are allergic to pets’ hair.

International Pet-friendly Employers

More companies are open to pets in offices in western countries compared to China.

Amazon, the best dog-friendly US company of 2021, supports 7,000 registered dogs with an on-campus dog park and plenty of free poop bags and treats. Discounted pet insurance is also available to pet parents.

The leading tech company Salesforce allows employees to book designated areas for dogs in advance, namely puppy force. It has beds, water bowls, cages, and noise barriers to avoid disturbing employees.

Google, VMWare, and WeWork are also famous pup-friendly companies.

While the discussion of bringing pets to offices happened a couple of years ago, it is just brought to the table in China. What pets can employees bring and how to take care of pets at offices are yet to be clarified. 

Read more: 大厂员工带宠物上班之后

The post Chinese Employees Bring Pets to Offices Including Dogs, Cats, Rabbits, And Lizards… appeared first on China Marketing Insights.

What makes it a learnable case study for brands is that the lotion successfully attracted new customers to La Mer. It helped raise the percentage of new customers to nearly 70%, among which was a 10% growth in the Gen Z consumer group.

What marketing strategy did La Mer apply to launch this lotion? How did the lotion bring young consumers to La Mer?

Product Targets at Young Generation

The hydrating infused emulsion is La Mer’s first lotion for anti-aging, which helps to build up the brand’s products team.

Most lotion has the issue of being too sticky to the skin, and they are not suitable to be applied either in spring or summer. La Mer spotted the problem and decided to create a light and hydrating lotion and, at the same time, has the ability to combat the aging issue for consumers.

Based on research conducted by Mintel, over 60% of Chinese consumers choose high-end skincare products because of the anti-aging need, such as tightening the skin (63%) and antioxidants (60%). Post-85s and post-90s are the most generous groups in spending money on anti-aging skincare products.

La Mer planned to use the lotion to bring consumers aged between 25-30 to the brand in China.

“Young as Me” Campaign

To make sure the brand reach the young consumer group, La Mer launched a “Young as Me” campaign (hashtag #年轻由我#).

The brand filmed a series of mini-movies featuring Chinese millennials and Gen Z. Scenes in the movie echoed with young people’s interest, such as surfing, camping, and skiing, showcasing the characteristics of the young generation: carrying clear goals and keep exploring the unknown, regardless of traditional boundaries.

Another hashtag that La Mer used when introducing the lotion was #轻启年轻#, meaning becoming younger. Either the campaign or the hashtag delivered the message to consumers, especially young consumers that by using La Mer’s hydrating infused emulsion, you can look younger.

Celebrities and KOLs Helped Bring More Traffic

To show La Mer’s sincerity for its new lotion, the brand invited Chinese Victor Ma (马伯蹇) to show up at its launch event with Tmall. Victor created a song dedicated to La Mer, which shared his attitude towards being young. The event was livestreamed on Weibo, generating more buzz for the new lotion.

In terms of KOLs, La Mer invited KOLs whose fans are the young generation to offline glamping, including top fashion KOL Yuanlanshi Ximendasao (原来是西门大嫂), fitness KOL Zoey (周六野), and travel KOL odin and kitty. La Mer coupled the lotion together with its iconic serum and educated KOLs on their effects.

Couple The Lotion and Serum

CP, or couple, is a hot word among Chinese young people. The term originated from actors/actresses, whom fans wish to have real relationships in life, other than in films or TV series. When it comes to marketing, everything can be coupled. Brand A can couple with Brand B to bring more attention. Similarly, Product A can couple with Product B to get a better effect.

La Mer has educated KOLs about the effect brought by the coupling of its lotion and serum. In March 2022, La Mer launched an upgraded serum and officially and publicly announced the combination of its two products.

Our Thoughts

La Mer smartly uses the hydrating infused emulsion to fill the gap in its product team, which mainly serves the young generation. Through its online channels and offline events, the brand successfully targeted Chinese millennials and Gen Z and educated them about its anti-aging effect.

The post How Did La Mer’s New Product Grow Its Gen Z Consumers in China? appeared first on China Marketing Insights.

Over the weekend, my WeChat subscription posts were bombarded by related articles of Blue Bottle Coffee. Some talked about its taste, and more were analyzing the reasons behind its overwhelming popularity in China.

Curious about the brand, I researched and decided to find out what made people wait in line for eight hours on its first day.

Blue Bottle Coffee’s Debut in Shanghai

The coffee store opened on February 25. Some people woke up at 6 am just to get a cup of Blue Bottle coffee, and on average, it took 3 hours for consumers to get in line and enter the store.

Scalpers took advantage of this chance, and some of them even ordered 60 bottles at a time, reselling each cup at 150 RMB, which was 4-5 times the original prices.

Blue Bottle Coffee’s Mini Program on WeChat also had a harvest time. Within less than one hour after launch, all of the brand’s coffee beans sold out.

About Blue Bottle Coffee

It is a coffee roaster and retailer headquartered in California, United States. In 2017, Nestlé acquired around 68% of Blue Bottle Coffee’s stake. By then, the brand had 40 stores worldwide. Five years later, its number of stores has been expanded to 100, and the Shanghai store is the first one that Blue Bottle Coffee opened in the mainland of China.

What Makes Blue Bottle Coffee A Big Hit Among Chinese Consumers?

Hu Jun (胡骏), CEO of Greater China from Blue Bottle Coffee told YiMagazine (第一财经) that it was easy to open a store, and Shanghai was the city that had new coffee stores open every day. But what made it hard were all infrastructure behind a store, such as the supply system, the IT system, the e-commerce system, and the training system. It was getting all these ready before opening was not easy.

Location

The Blue Bottle Coffee team had a very clear goal when selecting the location. The location needs to have the capability to bring the brand to a local market, and it needs to carry the Shanghai culture. The building of its Shanghai store was a flour mill, built in 1926 and refurnished in 2019. It combines the western and eastern cultures and reflects the construction style back in the Qing Dynasty. It is also located near the Suzhou River (苏州河), bringing beautiful views for customers.

Why Shanghai? If you have been to the city, you will notice how open it is. Either niche or common groups can find a place in the city.

Shanghai is also a huge coffee fan base. According to the Shanghai coffee consumption report in 2021 (上海咖啡消费指数), it is the city that has the most coffee stores in the world. Shanghai citizens love drinking coffee and trying out new flavors.

Shanghai is also many international students’ go-to city to seek job opportunities after graduation. For them, the name Blue Bottle Coffee is not strange, and they can help advocate its opening, just like my colleague did.

Localization  

If the brand just copies and pastes its menu from California, that won’t show much respect for Chinese consumers. As a result, at the Blue Bottle Coffee Shanghai store, consumers can have local snacks to match the coffee, such as mung bean pastry (绿豆糕) and mahua (麻花), a kind of fried dough food.

Since it is a historic building, Blue Bottle also has its sketch on the brand’s canvas and pasters. In the future, it is likely that the brand will collaborate with local brands to drive more attention in the China market.

Quality is the key

There is a saying that Blue Bottle Coffee is the Apple in the industry. Baristas are trained at least two months before they serve customers. In terms of coffee beans, the brand selects beans that have an SCA score over 84 (The Speciality Coffee Association created the score. Coffee scoring from 80-84.99 is graded very good, and coffee scoring from 85-89.99 is graded excellent, and 90-100 means the coffee is outstanding). Blue Bottle Coffee also has a strict rule that the coffee beans need to be used within 45 seconds after they are ground. On average, it takes 15 minutes for a barista to make a coffee.

Can Blue Bottle Coffee Continue Its Popularity in the China Market?

A food publication called Penguin Guide (企鹅吃喝指南) commented after visiting the store on its first day that “It feels like a ‘bug’ that we had to wait for all the drinks that we ordered to get ready before being served. ”

After tasting the coffee, Penguin Guide also felt that the quality was, without doubt, above the middle level in the chain specialty coffee market. Still, it’s not outstanding if you compare it to some of the local independent specialty coffee brands on top.  

The team also found out that the Shanghai store sells the highest price of Blue Bottle Coffee globally. The price is 35% – 40% higher than in Japan or South Korea. In terms of the coffee bean, mixed beans are sold at 138 RMB for 200 grams, while single beans are sold at 168-188 RMB for 200 grams. These prices are 2-3 times higher than the domestic market prices.

The number of coffee stores in China is booming, especially in Shanghai. But we still can’t conclude that Shanghai’s coffee has stepped into a saturated stage. With players such as %Arabica, Peet’s, and more local players such as Manner Coffee, M Stand, and Seesaw, it will be challenging for Blue Bottle Coffee to stand out neither in terms of its in-store decoration nor its taste.

The post People Waited for 8 Hours at Blue Bottle Coffee Shanghai Store appeared first on China Marketing Insights.

According to a data monitoring platform Fan Ruan (帆软), the MAU (Monthly Active User) of Dewu in May 2021 reached 81M, which was 8% month-over-month growth. Over half of its DAU (Daily Active User) are post-90s. On Dewu, the percentage of male and female users is 52:48. This is very different from Red, whose majority of users are females.

Who is this competitive player in the industry? Why can it attract so many young people to download and actively engage with it? And how can brands leverage it?

The Background of Dewu

One of the reasons why the app gained so many male users is that it used to be mainly sneakers and toys oriented. Not children’s toys, but art toys and collectibles that only “it” people would have, such as the popular bearbrick.

In 2015, the app was created. In the same year, it launched a new function, which was not common at that time, identifying shoes. This appeals a lot to people, especially boys who love sneakers, no matter if they are collecting, or wearing, or buying and selling them. Two years later in 2017, Dewu introduced the sales function. Users were able to buy not only sneakers and toys, but also apparels, beauty products, bags, watches or even home appliances on it.

There are gossips about why the platform changed its name from Du to Dewu in 2020. My thinking is, Du represents poison in Chinese. This is not cool as the name is suggesting something that the law forbids. Second, by reading Du, potential consumers won’t know what the platform is about. By giving the name as Dewu, which in Chinese means someone buys/gets something, it is easy to understand what the platform is. Your thoughts?

What Makes Dewu a Gen Z Hub?

As mentioned, the majority of Dewu’s users are young people, which are the Gen Z. Based on McKinsey’s report of Gen Z in APAC, 40% of the group love brands that can make them different from others. The percentage is twice the scale of Gen X (people born between 1965 to 1980). It is 1.3 to 1.5 times the scale of Gen Y (people born between 1980 to 1995).

When it comes to China, 61% of Gen Z are discovering brands that can make them different. Therefore Dewu is a platform that helps Gen Z satisfy their needs. Most of the brands on Dewu are streetwear brands. Some of them are niche ones that only a small group of people know. This gives this group of people a sense of belonging to find someone that is also paying attention to these niche brands.

What’s the Commercial Prospect of Dewu?

Liu Jianhai (刘建海), founder of a creative agency White Wall, believes that at the moment, the style of short videos on Dewu is still in the early development stage. Image and word posts dominate the Dewu UGC community. However, there is a rise in the number of user-generated videos. In the future, videos might be the mainstream content on Dewu, and users will spend more time on the platform.

Officially, Dewu is encouraging users to create more high-quality content. Recently it just launched a plan named “Giving Video MCNs Bonus”. If videos posted by MCNs satisfy Dewu’s rules, it will offer the MCN a maximum of 8.5 million traffic every month. As individuals, if you have a follower base somewhere over 500 people, Dewu might offer your video at most 600k traffic in the first month after you register on the platform.

This is a big opportunity for content creators. Unlike Red or Weibo and many other social media platforms that are now saturated, Dewu is still in its early stage of business development, which means that it is still providing incentives to both content creators and brands to share content on the platform.  

Not much advertisement

Dewu won’t define your content as hard advertisement even you talk a lot about a specific product in the post. Instead, your post might have a chance to be recommended by the system because of the authenticity and useful information that it delivers. Dewu would love to define your post as viral content.

On Dewu, posts with over 1,000 likes are counted as viral.

Lower cost to work with KOLs on Dewu

To work with a KOL that has around 60k followers on Dewu, it only costs 500 RMB for brands. With such a lower price, the conversion rate could be impressive as many users have the habit to purchase products through links provided by the KOL at the bottom of the post.

For every order that users purchased through links that KOLs provide, the source and amount can be tracked, and thus, KOLs can have commission from users’ buying behaviors. Some KOLs have half of their monthly income through commission.  

I would say Dewu’s users are younger than Red’s, and most of them are also active Douyin users. If your brand targets millennials or Gen Z, Dewu is an ideal platform to consider, with a lower budget. 

Read more: Z世代为什么中了「得物」的毒？

The post Chinese Young People’s New Love: E-commerce App Dewu appeared first on China Marketing Insights.

A Means of Expressing One’s Personality

For Generation Z, cars are more than just transportation, they’re also a way to express themselves. This often means that Gen Zs have a very clear understanding of what type of vehicle they’re going or willing to purchase.

According to the report, the first thing they consider when purchasing a vehicle is safety, with 55% of Gen Z buyers saying they are choosing a vehicle based on the vehicle’s safety ratings. Although Gen Z buyers have a lot say in what type of car they want to purchase, oftentimes their parents or grandparents are the ones that are paying the bill. So to them, safety is number one concern for their loved ones and the top thing that needs to be taken into consideration.

But then after that, the second most important thing for Gen Z is design and styling. 49% say they choose a vehicle based on design and styling, which is 19% higher than millennials (Gen Y).

Interestingly, performance and handling is all the way down at #5.

Data also shows that 75% of Gen Z car owners use their car for daily commute, and 73% for family related use and 73% for road trips.

An Important Extension of Their Personal Space

Apart from practical use, many Gen Z buyers are under the influence of social media and the desire to project a certain personal image, so to them a car is so much more than just means of transportation.

In fact, 47% of Gen Z thinks that a car is an important extension of their personal space where they can find their own peace of quiet.  36% of Gen Z thinks that a car allows them to express themselves. Just like fashion, with aftermarket customizations and brand image, owning a cool car can be perceived by others as stylish and trendy.

Intelligence is Key

According to Ipsos’s survey, the top 6 automotive topics are smart transportation, automotive entertainment, automotive customization and DIY, racing, road trip and car models (hobby).

Among them, 40% of Gen Zs are interested in smart transportation. To many Gen Zs, a car isn’t just a driving appliance, it needs to be intelligent. Self-driving, intelligent voice recognition and in-car artificial intelligence are some of the top features that Gen Z buyers are looking for when searching for their next vehicle.

The trend of “China-chic” (GuoChao) is also influencing the automotive industry.

The China-chic trend in the fashion industry has raised awareness of appreciating traditional Chinese culture. However, it did not stop there, it also expanded the concept of “Made in China” among Gen Z consumers to many other types of products.

Generation Z grew up in the “take-off” stage of China’s economy and witnessed the development and rapid growth of domestic brands. Many Gen Zs are increasingly more confident in buying domestic brands over foreign brands. Research shows that Generation Z’s preference for domestic car brands is only second to German car brands that have 100 years of making automobiles under their belt.

47% favor domestic brands over foreign brands, and the top 5 reasons are technology, cost effectiveness, reliability/quality, design and functionality.

Interestingly, when compared to the top 5 reasons of purchasing foreign brands we can see some similarities. This further shows that from the Gen Z buyer’s perspective, the gap between foreign and domestic brands are shrinking.

Gen Z are Drawn to New Energy Vehicles

The internal combustion engine has deeply influenced many generations as the way a vehicle should be powered. Oftentimes the type of engine a car had was one of the deciding factors for purchasing a vehicle.

However, with China tightening down on environmental controls, many Gen Z automotive buyers see new energy vehicles as the alternative. Research shows that 39% of Gen Z buyers are choosing alternative energy vehicles. Among them, 61% said they purchased them for environmental protection reasons.

Many new energy vehicle brands are targeting Gen Z buyers as their primary marketing audience. Brands like Tesla have greatly elevated the reputation of new energy vehicles. With its technology and fast acceleration, many Gen Z buyers sees new energy vehicles as the future of transportation.

SUVs with multi-purpose attributes have become Gen Z’s favorite vehicle type

SUVs have always been popular among the Gen Z demographic. Research shows, 44% of Gen Z automotive buyers prefer SUVs. According to the survey, many Gen Z buyers prefer SUVs because of their high ground clearance, spacious interior, and ease of entry and exit for elderly family members. Owning an SUV enables Gen Z owners to go on road trips where the road conditions may not be ideal.  

If you’re enjoying this series, check back soon for more takeaways from the report!

The post Key Takeaways from the Gen Z Automotive Preferences Insights Report: Part 2 appeared first on China Marketing Insights.

Recently, Ipsos and B-Insights released the Gen Z Automotive Preferences Insights Report (Z时代汽车观洞察报告) which shares some key trends related to this increasingly important buyer group. In this series of articles, we will share takeaways from the report. This first article will give some background on the growing influence of Gen Z buyers.

83.7% of Gen Z consumers have the desire to own a vehicle

China’s economic growth has positively impacted how Chinese people spend their money. The improvement of economic conditions has made cars more accessible and popular among young people.

In comparison to previous generations, the demand for cars is growing among Gen Z, with research showing that 83.7% of Gen Z consumers have the desire to own a vehicle. In 2020, 39% of new cars were purchased by post-90s consumers, only 2% lower than millennials. It is expected that by 2025, 65% of car sales will come from post-90s and post-00s consumers.

In the fast-paced life of young people. Gen Z consumers see driving as an important skill in their social life.

Showing up in a nice car when meeting friends is the image most Gen Zs are after. Owning a car also means freedom, and that freedom allows Gen Zs to navigate their social life with ease and larger footprint.

Employment is a Major Factor Driving Automotive Sales

Research shows that more than 80% of Chinese Gen Zs started driving early in high school and college. They also chose to buy cars earlier than Gen Y.

Research shows that 67% of Gen Z purchase a vehicle when they get their first job. While many Gen Y consumers also purchased their first car around this time, we can see that many Gen Y waited until marriage or having children to purchase a car, while Gen Z tend to have a car long before that.

It is worth noting that employment appears to be a major driver of passenger car sales and something brands may want to take note of when marketing their vehicles.  

The report found that 63% of Gen Z’s first car purchase budget is 150,000 RMB (a little over 23k USD) or greater. It’s important to note though that, much of the time, they are not purchasing the vehicle on their own. Oftentimes, Chinese parents and grandparents will pitch in to help purchase the car as a reward for landing their first job.

Gen Z Also Have Significant Influence Over Their Family’s Vehicles

The study shows that as they grew up, many Gen Z developed strong preferences for car brands,  models, and features and have strong feelings about what cars both they should get, and even their family should get. The report found that 21% of Gen Zs are able to decide what brand and model their families should purchase and another 44% have a strong say in what their family purchases. This deciding power over not only their own cars, but their family’s cars, makes Gen Zs one of the most important demographics when it comes to purchasing power.

If you enjoyed this article, check back soon for more takeaways from the report!

The post Key Takeaways from the Gen Z Automotive Preferences Insights Report: Part 1 appeared first on China Marketing Insights.

At the moment, the only way to purchase the new product line is through JD. Even the Mini Program that Perfect Diary guides readers to is JD’s Mini Program, not its own. To me, this shows that the brand wants to see how its male line goes. If its sales perform well, the brand will spare budget to create a separate MP. It was smart of them to choose JD.com as the majority of the platform’s users are male, unlike Tmall.  

Perfect Diary has been smart to grasp trends. It introduced color contact lenses in March, and now, the brand wants to benefit from the growing male cosmetics industry.  

Male Cosmetics Market is Booming in China  

In fact, male cosmetics have been around since the 1920s, but remained low-key for a long time. Well, since the market for girls has become saturated, brands are searching for new growth opportunities, and they see boys are paying more attention to their looks.  

The number of companies dedicated to male cosmetics is increasing in China. According to a corporation monitoring platform Qichacha (企查查), the amount of companies registering in a year has grown from 1,105 in 2017 to 3,141 in 2020.  

Not only more players are joining the industry, but also many investors see opportunities in it and actively investing in those companies. A domestic male skincare brand Make Essense (理然), founded in 2019, has received six rounds of investment so far, among which, the highest amount was up to 300 million RMB. Not long ago, Bilibili showed up in the brand’s info as one of its stakeholders.  

Since 2017, there have been over 18 financing cases in the male cosmetics industry, with a total amount of over 1.8 billion RMB. Heads up, 11 of those 18 happened in 2020.  

What Type of Consumers are Buying?  

Based on a male consumer behavior report published by QuestMobile, over 185 million males are following beauty KOLs. People who age 25 to 30 make up 25.2%, and people who aged over 45 make up 13.5%. That leaves Gen Z as the main consumption group.  

Another report which shows the trend of the development of domestic beauty brands indicates that the consumption of male cosmetics through online channels grew 24.5% in 2019. The GMV that male cosmetics shoppers contributed grew 41.5% on Tmall in the same year.  

Over 60% of men buy skincare products on their own and the number of men buying cosmetics products is 20%. Only 2.5% of men have the habit to wear makeup daily. But this percentage is growing. It is estimated that the rate of growth for the Chinese male cosmetics market is 13.5%, which is twice the scale of the global market.  

Why There Is No Unicorn Male Cosmetics Brand Yet?  

Men’s habits of consuming cosmetics is still in very early stages 

Though people are getting open with men having skincare routines and putting makeup on, the majority are still conservative towards it. Men don’t have the habit yet, and are in a period of testing and trying out.  

There is no top beauty KOL whose majority of fans are males  

You might say what about top live streamer Austin Li? He tests the colors of thousands of lipsticks in front of the public. But most of his followers are females. They are not boys.  

Male beauty KOLs whose majority of fans are males haven’t shown up. No one is there to educate Chinese males about cosmetics.  

A failed example  

In autumn 2018, a male grooming brand HOUSE 99, co-founded by David Beckham and L’Oréal entered the Chinese market, bearing the hope to benefit from the male cosmetics market. Its presence was mainly online, both on JD and Tmall. However, HOUSE 99 exited the Chinese market in less than 3 years.  

Someone needs to educate Chinese male consumers about cosmetics and how to use them before any brands can profit from the market.  

Who are Perfect Diary’s Competitors In The Male Cosmetics Industry?  

Though male cosmetics is a New World waiting to be developed, there are already many players joining the trend.  

Dior, Armani, Chanel, Tom Ford, SK-II and many other international beauty brands have launched their male collections, including skincare and makeup products. L’Oréal has two brands dedicating to the industry, Biotherme Homme and L’Oréal Men Expert. They are smart to directly name the brand with “men” in it, letting consumers know they are brands serving men.  

Besides international brands, Chinese brands are emerging and booming. Martin, Make Essense and dearBOYfriend. However, I think one thing that they fail to achieve is to show they are a male cosmetics brand from their names. Simply reading their Chinese names won’t let consumers know what this brand is doing.  

While it is a long way ahead for men to form their skincare and makeup habits, Perfect Diary takes a shortcut. It directly skips the process of education, as the brand hands it over to men’s partners, aka women who are their existing customers. They encourage their female customers buy the new male products and send them as a Qixi (Chinese Valentine’s Day) gift to the men in their life. 

Read more: 

男士赛道跑不出“完美日记” 

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男色经济来袭：一年3141家男妆品牌涌入，有公司两年融五轮 

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Movie-Goer Demographics are Changing

Based on statistics from Cat Eye Movie (猫眼电影), in 2018, there were already signs that post-00s don’t visit cinemas as often as the other generations. Statistics show that, among Chinese people who went to cinemas during summer holidays from 2016 to 2018, the percentage of people who over 35 is increasing, yet the percentage of people who below age 24 is decreasing.

In 2019, the average age of this cinema visitors reached 29 for the first time, and people who between the ages of 30-34 became the main consumer group.

2020 was not an ordinary year for anything, including cinemas. After the lockdown from January to March ended, people flooded to cinemas because they finally could. During last year’s summer holiday, the percentage of movie goers below 24 increased from 29.5% in 2019 to 39.4%. But that’s it. In the following National Holiday and the Spring Festival, there was no rise in the number of post-00s visiting cinemas.

The average age of cinema visitors from 2017 to 2019 were 28.25, 28.73 and 29.18. Though in 2020, the number decreased to 28.8, but that’s only because the end of lockdown made people want to go out and partake in lots of activities.

Why Cinemas Lost Their Charm for Chinese Post-00s?

Post-00s have different ways to fill their leisure time

According to a survey by Qi’e Zhiku (企鹅智库), when post-00s and post-05s were asked what they liked to do in their free time, the top six were online chatting, browsing web pages, watching videos, playing mobile games, shopping (both online and offline) and doing sports. None of them was watching movies in cinemas.

The lockdown also changed people’s habits of watching movies, especially for Chinese post-00s, who have known the Internet since they were born. Being unable to visit cinemas, the young generation started sourcing movies at home. Watching them online costs way less than visiting cinemas, either in terms of movie tickets or peripheral costs generated from this small trip.

Consumers have fewer options for international movies

Because of Covid, many international movies such as Marvel and DC’s movies are postponed until 2022.

Though the quality of domestic movies is getting better, young people are more attracted to international ones. And that’s why if the movie is not super popular or buzzed-about on social media, they won’t go to cinemas to kill time.

Chinese Post-00s Prefer Escape Rooms and Murder Mystery Games

We’ve talked about escape rooms. They serve as a way for young people to escape reality. Post-00s especially like horror-themed rooms as these are better to distract them from daily pressure. Because they are very scary, many people also use it as a way to test their significant other.

Other than escape rooms, murder mystery games are also very popular among young people. In this game, players will be given a script in which at least one person is murdered. Every player is assigned with a character and the goal is to find out who is/are the murderers.

Other than these, spas, gaming, kitten cafes, trampoline centers, haunted houses and home parties are popular entertainment activities among post-00s.  

Read more: 电影院失去00后

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