Spring is in full bloom and as China makes progress with the relaxing of COVID-19 measures, domestic and international consumers are keeping a close eye on how this market will recover this year.
Industries that have been suppressed due to the pandemic, are making a comeback. This Chinese New Year holiday alone, saw the number of people entering and leaving China rise by 120.5% in comparison to 2022, according to the National Immigration Administration.
The ease in restrictions have seen brands recovering and now keen to improve their marketing and communications in China. It has also opened opportunities for brands to establish in-depth connections with its Chinese consumers.
But with the last 3 years passing in a flash, what are some trends and opportunities worth noting for brands in the market recovery phase?
#1 Take your business offline
Since the pandemic, many offline events have been delayed or cancelled. We have seen an onslaught of online communication and marketing for brands mature. E-commerce strategies have penetrated almost every brand in the retail industry, and events such as press conferences have moved online. But the offline marketing scene still has its value.
After restrictions were lifted during the long Spring Festival holiday, the offline entertainment, food and beverage and tourism industries all welcomed a different degree of growth. The Ministry of Culture and Tourism Data Center reported that 308 million domestic tourism trips were made during the holiday, an increase of 23.1% YoY. Movie ticket sales were 6.758 billion yuan, ranking second in China’s film history in the Spring Festival season.
Whether it was brand-led or industry exhibitions, new offline marketing activities gradually resumed this year.
For brands, the return of diversified offline marketing scenarios is an opportunity to re-establish a more direct, authentic, and deep connection with customers and the media. These tangible experiences, help strengthen the interactive communication between brands and their target audience, allowing brands to drive customer decisions through more direct communication.
#2 Creating scroll-stopping online shopping moments
The home-based economy has driven growth in online consumption and changes in consumer habits over the past three years. The latest survey shows that search engines, live streaming and WeChat Official Accounts/Videos are important channels for consumers to access information, and for consumers in Tier 1 cities, the channel also includes e-commerce platforms/shopping apps. in addition, the pandemic has driven the growth of short-form video users, with a 93.2% penetration rate in China as of June 2022. Short videos are tied with mall/offline store experiences as the channel with the most influence on consumer decisions. Douyin, an emerging e-commerce channel, has a higher percentage of consumers in 2022 compared to 2021, with continued growth in new user orders and consumers gradually developing the habit of repurchasing.
In addition, the pandemic has driven the growth of short-form video users, with a 93.2% penetration rate in China as of June 2022. Short videos are tied with in-person store experiences as the most influence on consumer decisions by ad format. Douyin, an emerging e-commerce channel, has a higher percentage of consumers in 2022 compared to 2021, with continued growth in new user orders and consumers gradually developing the habit of repurchasing.
The development of online consumption habits has continued to influence consumers’ purchase behaviour. The challenge for brands now rests on their ability to grab their consumers’ attention, and how they interact with the consumers through these platforms.
# 3 Building and maintaining a brand story is important
In 2022, resident deposits increased by 6.59 trillion yuan (953 billion USD) year-on-year, setting a new high for the figure since statistics became available. RMB deposits also increased by an extra 3.05 trillion yuan (441 billion USD) year-on-year in January this year. The continued increase in China’s savings rate implies that residents are not optimistic about the future economic outlook and that consumer confidence is declining.
Those who have been influenced by “consumerism” for a long time have also changed their perception of consumption since the pandemic first started. A recent study released by Jingdong found that consumers are becoming more rational by looking for “best value for money” in products and services. In addition, quality is also important to consumers as they become more conservative in their spending.
This means consumers are less and less likely to be influenced by marketing gimmicks. Brands need to enhance consumer understanding of their products and services, by offering more information to help consumers make satisfactory decisions. Brands should also consider making themselves available on multiple consumer touch points, as a long-term investment, rather than a “one-shot deal”.
For now, from a global point of view, the economic turmoil has not yet passed, but the Chinese has proven that they are on their way to a gradual recovery. It is now time for brand building and connecting with consumers and their suggestions.
Got your eyes set on consumers in China? Learn about the market trends and consumer insights in our latest guide or speak to our experts here.