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Chinese young adult generation influences how China consumes media and brands

Marketers must ensure relevance to this audience
 
By King F. Lai
CEO Asia Pacific and Chairman China
Kinetic Worldwide
King.Lai@kineticww.com
 
Murphy Ho
Director of Research and Insight, China
Kinetic Worldwide
Murphy.Ho@kineticww.com

Adam Hyslop
National Planning Director, China
Kinetic Worldwide
Adam.Hyslop@kineticww.com
 
China’s young adults – more than 400 million strong – account for a third of China’s population and are equal to more than the whole working population of the US and Western Europe combined. Their spending power is a primary engine not just of China’s continued growth, but of global economic stability. 
 
Arguably, this is the generation that is the most different from any generation before. It is already exerting significant influence in modern culture and attitudes towards family, relationships, and brands. Current estimates show that millennials in China will see their aggregate income grow by $3 trillion in the next 10 years.
 
 This group is often categorized in two separate buckets: the Post-80s (born 1980 to 1990) and the Post-90s (born 1990 to 2000). However, they are both filled from a common well. Both grew up in single-child households because of the government’s policy, and both find community in a digitally connected world. This first generation of digital natives is comfortable not only with buying online, but also with mobile transactions of all sorts.
 
These young adults are reshaping their society and overturning assumptions about how media is consumed and how marketers interact with consumers. China’s millennials are already the most digitally active and aware group of consumers on the planet.
 
Marketers’ brand strategies that worked in a double-digit growth era will not work in the coming years under the Chinese government’s “new normal” policy to recalibrate the economy and manage GDP growth at 6.5 percent. To maintain sales momentum, brands need to rethink their approach to ensure their relevance in appealing to this critically important young audience.
 
Current Brand Challenges
We observe many businesses struggling to find a relevant role in people’s lives. This is often because brand perceptions of value do not match the viewpoint of those they are trying to influence, especially among today’s younger generation. The key to success lies in selecting a context that fits not just the strengths of the brand but also the target audience.
 
In search of brand values
Young people are spending more time than ever before out and about, living their lives. They enjoy significantly greater disposable income than earlier generations and are willing to spend on brands based on shared values rather than price or status. In fact, young people demonstrate surprising price insensitivity when purchasing products or brands that connect with them. So, brands must offer meaningful services, experiences, and even a clear commitment to social responsibility to provide young people with the permission to believe in the brand and product.
 
Matching omni-channel needs with budget realities
The traditional purchase funnel of Awareness/Interest/Desire/Action has evolved into a complex purchase journey with more touchpoints than ever before. Within finite budgets, brands must engage these young people, using non-linear, omni-channel communications, in a personalized way, at the specific locations and times that most influence their exploration, their decisions, and their behaviors, motivating them to act. These tangible experiences help to reinforce brand identity and values, whether online or in-store.
 
Online or off-line
China is the world’s greatest e-commerce success story. Now, when people are out and about, and are open to a brand interaction, they can scan with their mobile, read reviews about the product, purchase on the spot and have it delivered the next day. However, the much-used jargon of O2O is not about a shift to selling online but rather a seamless integration of shared services and experiences between digital and physical stores that enhance each other.
 
Meeting these challenges
Understanding triggers and barriers is the key to developing compelling brand relationships with the 80s and 90s generations. As they experience brands while on the move, their decision to engage comes down to a trade-off between the shopper currencies of time, money, and energy.
 
Each category is different but on-the-go brand engagement, which we call “Active Journeys,” can bridge many communications with one-to-one connections that deliver seamless experiences that drive conversions.
 
Mobility is key. When we discuss mobility, it is not about a device; it is a mindset and fulfillment of lifestyle expectations. When the younger generations interact on digital platforms with brands that provide the services and experiences that quench their thirst for defining self-identity, they are very open with their personal identity. Brands can then use this data to improve service, enhance immersive experiences, or connect to those with shared social responsibility priorities.