China is a complicated market, where consumers know what they want and what they do not want, tells marketing expert Ashley Dudarenok. She says that finding the right channel is the start of a complicated process.
Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Get in touch or fill out our speakers’ request form.
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China’s Double 11 consumer festival has kicked off for its longest edition ever with five weeks. Consumption expert Ashley Dudarenok looks at this year’s trends for Campaign Asia. Dudarenok, author and China digital expert predicts that countries such as Singapore, Malaysia, Thailand, Japan, and South Korea—now part of the “free shipping zone”—will see a sharp rise in new users.
Campaign Asia:
Ashley Dudarenok, China digital transformation expert and founder of ChoZan, agrees, noting that “emotional consumption” is on the rise, particularly among younger Chinese consumers. “Toys and plushies are popular for comfort and stress relief,” she says, pointing to Jellycat’s dominance in the plush toy category, even surpassing Disney last year.
Taobao and Tmall’s official data have identified several booming consumption trends, including designer toys for young adults, pet products, and niche home appliances and furniture. As of October 24, 284 brands surpassed $14 million in sales. In particular, the beauty, fashion, sports & outdoor, and digital product categories have seen significant growth this year. Zhang refers to this phenomenon as the “lipstick effect,” an economic theory suggesting that “people are more likely to buy small, affordable luxuries when facing economic uncertainty. Hence the rise of small luxury purchases such as lipsticks, fragrances, concerts, wellness products and pet products”. Dudarenok, with years of observation from China marketing, sums up that consumers are buying more furniture and appliances. A total of 224 brands surpassed their entire first four-hour performance from last year. “The IP economy is still thriving”, and Tmall now features over 1000 IP-based products to meet rising fan interest. She also highlights “Apple’s increasing efforts to attract budget-conscious buyers in China by making premium devices more affordable during the annual shopping festival. Apple quickly achieved one billion yuan in sales within just five minutes on Taobao and Tmall”…
Dudarenok, author and China digital expert predicts that countries such as Singapore, Malaysia, Thailand, Japan, and South Korea—now part of the “free shipping zone”—will see a sharp rise in new users as well. Early data from Singapore and Hong Kong already show a doubling of new consumers compared to last year.
Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.
Are you looking for more consumption experts at the China Speakers Bureau? Do check out this list.
Consumer spending in China might be in the doldrums, but a remarkable exception is the movie industry, says business analyst Ben Cavender in the Wall Street Journal. Visiting film theaters has become an affordable time out for friends and families of more tight-fisted consumers, he says. The planned expansion of the number of theaters to 5,000 per year shows the industry’s optimism. Also: domestic movies are doing better than the previously popular foreign competitors.
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China’s consumers spend less on luxury products, especially foreign brands, says marketing expert Ashley Dudarenok at the state-owned China Daily. Only domestic luxury brands are partly escaping that downward trend, she says.
China Daily:
Western luxury brands are particularly affected by these shifts. A recent survey of 2,000 Chinese consumers by Investment firm TD Cowen found that only 17% plan to increase their luxury spending, while 64% plan to spend more on travel. Many consumers are gravitating toward domestic brands or opting for more sustainable, personalized, and culturally relevant products.
“Chinese consumers are buying fewer luxury goods as economic challenges take a toll on spending,” Ashley Dudarenok, founder of the China digital marketing agency Alarice, tells Jing Daily. “There’s also been a noticeable shift in mindset, where flaunting luxury brands is now seen as shallow and disconnected from reality.”
Instead of focusing on brand logos, consumers are increasingly valuing outstanding product quality and unique style.
“While some ultra-high-end brands still benefit from their heritage and cultural significance, the overall trend is moving away from overt displays of brand loyalty,” Dudarenok says….
Rising youth unemployment and low consumer confidence are shaping the luxury market. Youth unemployment reached 18.8% in August and the Consumer Confidence Index dropped to 86 in July.
“As consumers grow more cautious about spending due to uncertainty around job security and income, luxury brands may struggle to maintain previous growth levels. Fewer first-time luxury buyers are entering the market, posing a long-term challenge to the sector’s growth prospects,” Dudarenok says.
While foreign brands face challenges in the market, Chinese luxury brands are gaining momentum.
“Domestic brands like Duanmu and Shang Xia are gaining traction by leveraging their understanding of Chinese culture and consumer preferences,” Dudarenok says. “Unlike foreign brands that often dominate the market, these local brands focus on products deeply rooted in Chinese traditions, such as those incorporating Traditional Chinese Medicine in cosmetics. This cultural alignment resonates with consumers, particularly as national pride grows among Chinese shoppers.”
Ashley Dudarenok is a speaker at the China Speakers Bureau. Would you like her to be at your meeting or conference? Contact us or fill out our speakers’ request form.
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Despite the hope of the international financial community, China is not heading for structural reforms, says leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, to CNBC. Pushing up demand is not high on the agenda for China’s leadership, he says, and they do not want to push up debts levels to new heights.
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Leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, says most economists are wrong in suggesting China wants to push consumer demand. Fixing stability is key, he says according to MSN.
MSN:
One expert suggested that investors are misunderstanding China’s intent in providing the stimulus boosts. According to Arthur Kroeber, founding partner of Gavekal Dragonomics, Beijing’s intent isn’t to accelerate the economy by enabling consumers, but simply to stabilize it.
“The economic aims are to stabilize growth and prevent deflation from tightening its grip,” he wrote in the Financial Times. “The market goal is to restore enough confidence so that equity prices post steady, moderate rises. This will reopen the window for new listings and enable the stock market to resume its assigned role of financing China’s industrial policy ambitions.”
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Pinduoduo (PDD) suffered an unprecedented 30% decline in its share value at the start of this week, but business analyst Shaun Rein sees here an opportunity for investors. Buy PDD, he tells them on CNBC. The company has hit a wall through China’s consumer decline in trust, but he sees enough possibilities to grow overseas, especially with Temu, he adds.
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Reuters reviews China’s latest blockbuster “Upstream”, casting a rare and harsh light on the country’s biggest economic pain points. “An uncertain job market, downward mobility, and the hardscrabble life of millions who are working gig jobs.” Marketing expert Ashley Dudarenok sees a profound change among the previously optimistic consumers, who pushed ahead the country’s economy in the past, she tells Reuters.
Reuters:
Ashley Dudarenok has written books on Chinese business and consumer trends.
“It is a rather realistic depiction of the psyche of many Chinese people today. Previously, if we remember five years ago, 10 years ago, what set China very strongly apart was this very positive mindset of the consumer of an average business person. Because there was this strong underlying belief that tomorrow is going to be better than today, the economy is going to be better, opportunities are going to be better, technology is going to, you know, drive us forward. ‘I’m going to build my skills and my future is going to be better.’ Today that belief is not there.”
Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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Days are gone when Chinese consumers carried large plastic bags of cash to pay for houses, cars, international trips, and other big-ticket purchases. Credit cards are big among especially younger consumers, says Shanghai-based business analyst Shaun Rein at the WSJ.
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Hong Kong-based marketing guru Ashley Dudarenok discusses the way China’s market is different from the rest of the world in terms of platform, consumer behavior, and other elements of the crowded and fast-moving market. A debate on Vistatalks with Maria Coa.
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China’s consumers are still nervous, the economy is weak, but looking good in the longer run, says Shanghai-based business analyst Shaun Rein at CNBC. Consumers are trading down now, but both real estate and infrastructure are not helping the economy, he adds. In the next decade, China’s middle class will grow from 400 to 800 million. Rein saw many of his clients move temporarily to Japan but is sure they will return to China.
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China’s consumers are trading down because of deflation, and are looking for cheap prices, says Shanghai-based business analyst Shaun Rein to CNBC. China’s government is unlikely to use financial support for the economy, he adds, as it finds the current growth of 5 percent quite enough, as its priority is dealing with the gap between the haves and have-nots, not at trying to increase that economic growth.
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Branding expert Ashley Dudarenok, author of Innovation Factory: China’s Digital Playbook For Global Brands (September 2023), discusses with Pascal Coppens what global brands can learn from China. Business models from the USA, Germany, and Japan have left their footprint in business education. Still, the innovations coming from China have been left out of this business learning process, says Dudarenok, especially regarding ways to reach consumers directly.
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Deflation is on the edge of slowing down China’s economy, and falling pork prices are yet another indication not all is well, says Shanghai-based business analyst Shaun Rein at CNBC. As for the less affluent, China Market Research Group’s Rein observed that they are saving money by ordering less pork, according to CNBC.
CNBC:
Deflation — associated with the decline in prices of goods and services and a sign of a weakening economy — is concerning because consumers may postpone investments or purchases in hopes of prices falling further.
“Aside from falling real estate prices and price cutting across consumer goods, the biggest reason for China being on the verge of deflation is falling pork prices,” China Market Research Group’s Managing Director Shaun Rein said.
China’s consumer price index fell 0.5% year-on-year in November, marking the sharpest slide in three years. …
Affluent Chinese are increasingly considering beef to be a healthier alternative to pork, with 28% of consumers surveyed saying they plan on reducing pork consumption, a study published in February by managing consulting firm McKinsey showed.
As for the less affluent, China Market Research Group’s Rein observed that they are saving money by ordering less pork.
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China’s consumers are adjusting their purchasing habits and big players are adjusting their strategies to the search for cheaper products. Marketing expert Ashley Dudarenok looks at the changed strategy of Alibaba’s Taobao for the Double 12 festival, she says at marketing-interactive.
Marketing-interactive:
China has seen an abundance of huge shopping festivals over the years. However, the increasing dissatisfaction with complicated discount systems and the oversaturation of shopping events highlights a need for eCommerce platforms to innovate and align with evolving consumer preferences, said ChoZan’s Dudarenok…
The latest revamp also shows that Taobao is adapting to a change in consumer sentiment. Given the “general disinterest in shopping due to economic uncertainties” among Chinese consumers, shifting towards promoting value and affordability could serve as a strategy to re-engage customers and sustain sales, according to Ashley Dudarenok, founder of China digital consultancy ChoZan.
“Chinese consumers are also tired of the complicated discount systems. Taobao usually offers discounts through the “满减优惠” method (e.g, 50 yuan off for every 300 yuan spent),” she added.
By shifting its focus towards offering products of better quality at reasonable and affordable prices for consumers, Taobao’s move will benefit consumers as well as small to medium-sized brands.
More at Marketing-interactive.
Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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China’s consumers are becoming more cost-sensitive, and that means a profound change in the country’s retail, says business analyst Shaun Rein at CNBC. “The name of the game for Chinese youth in 2024 is trading down. Instead of Starbucks, youth are buying Luckin coffee,” Rein says.
CNBC:
Chinese young people are increasingly shopping and dining at the basement units of malls, a trend the social media has labeled the “B1B2” economy.
The basement floors — B1, B2 — typically house low-cost gift and souvenir shops, apparel outlets, the supermarket, and other relatively affordable consumer product stores like Miniso and Luckin Coffee.
“Landlords try to put anchor tenants like LV, Apple or Starbucks on pricier real estate on the ground or first floor,” says Shaun Rein, managing director of China Market Research Group. Historically, higher-end shops have attracted more footfall, but China’s weak economy means the cheaper brands are now drawing the crowds, he adds.
The hashtag ”#Young people only go shopping at B1B2″ has been trending recently on Chinese social media platform Weibo.
The reply to a Weibo user’s post on how she and her peers usually go straight to the basement floors for shopping captures the mood of the Chinese youth: “Everything we can afford is underground!”
Anything not in the basement floors is considered to be “in heaven,” signaling it’s out of reach.
“The name of the game for Chinese youth in 2024 is trading down. Instead of Starbucks, youth are buying Luckin coffee,” Rein says.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
Are you looking for more marketing experts at the China Speakers Bureau? Do check out this list.
