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Western brands must learn from China's new, individualistic consumers

Earlier this year, China overtook the US as the world’s leading destination for foreign direct investment. For Malcolm Poynton, global chief creative officer at Cheil, this means western brands must truly embrace innovation and reinvention to keep up with the global consumer expectations change.

With the pandemic putting a stranglehold on economic growth in Western countries, and the US in particular, brands and businesses have switched focus to China.

According to a recent UN report, foreign direct investment in China overtook that of the US last year for the first time ever.

Thanks to its booming economy and its effective response to the pandemic, China now receives more investment from foreign companies than any other nation.

As brands line up to take advantage of the country’s vast purchasing power, Chinese consumers, especially those from the younger generation, are under more scrutiny than ever.

With rising disposable incomes, improved education and rapid sociocultural change, Chinese collectivism has shown signs of waning over recent years as people embrace more individualistic values.

This growing sense of individualism is especially apparent in younger consumers. Chinese Gen Z-ers have significant spending power and put individuality and self-expression first when deciding which brands best represent them, according to research from global insights firm Agility.

Younger people’s attitude to luxury differs from the older generation, in that it’s less about showcasing wealth and more about communicating what sort of person you are. Luxury brands such as Dior, Gucci and Burberry are tuning into this need for self-expression with customized accessories and personalization, like Louis Vuitton’s ’Hot Stamping’ program, where customers can stamp their monograms on leather products.

Consumers in China have a collector’s mentality coupled with an insatiable appetite for novelty, investing in exclusive limited-edition products or short-term brand collaborations in order to stand out from the crowd and showcase their personal tastes.

This has given rise to a vast range of often unexpected pairings, such as Adidas x Hey Tea edition sneakers and KFC China teaming up with Chinese brand Liushen to create an insect repellent-flavored drink for the summer. To mark Chinese New Year earlier this month, many brands brought out limited-edition collections, including Nike which launched a sneaker emblazoned with the ox and other traditional Chinese motifs.

Sharing your new limited-edition handbag or sneakers across social is another way to present your personality – with the added bonus that the rarity of the new purchase will help it gain in value.

This mentality is beginning to spill into retail where brands such as Burberry are partnering with tech platforms to create unique AR shopping experiences in-store, enabling them to drop limited editions aimed at specific shoppers, in real-time.

The next generation is also becoming more socially conscious and environmentally aware. The luxury resale and clothing rental market is starting to gain traction in China, along with eco movements such as veganism – as evidenced by KFC’s vegan nuggets selling out within an hour of their launch in China last year.

Culture certainly moves fast in the east. In China, where platforms like Alibaba and Tencent sprouted up and became an integral part of daily life at a staggering pace, brand building is all about agility and speed. The long term campaigns favoured by western brands, like Dove’s ’Real Beauty’, would be alien to eastern consumers who have grown to expect a much higher cadence of marketing and product cycles from brands. This constant demand for the new has made companies in the East adept at listening to and responding to what consumers want.

The need and desire for self-expression as a reaction to the traditional Chinese culture of uniformity looks only set to grow further in future. Western brands must truly embrace innovation and reinvention in order to keep up with what will surely become a global consumer expectation.