How will you reach 226 million young consumers?


Upon publication of the study carried out for the Chinese digital agency Hylink on the trends and consumption habits of Generation Z in China, Yuan Zou, Hylink’s Luxury and Fashion Director for Europe, provides us with some fascinating insights on the interpretation of these data and the leads that may emerge for Western advertisers.

The Chinese GenZ are attracted by technological solutions, robots and AI identification systems. In terms of e-marketing, this allows for much more innovative, but also more aggressive solutions. In the West, people distrust those systems for privacy reasons. Do you think that young Chinese have such a different attitude and if so, how would you explain it?
You have to understand that the Chinese have evolved in a completely different cultural context. The GenZ grew up in a communal society, under a communist regime, where privacy and personal data don’t have the same meaning as in the West. New technologies and the internet have generated extraordinary comfort, from making a doctor’s appointment to accessing all consumer products. All this was not available before. They accept without ulterior motive to give up a bit of privacy in order to benefit from all these advantages. This may seem like a sacrifice from a Western point of view, but it’s not the case for the Chinese.

Do you think that China is, for some major brands, a testing ground for these innovations? What feedback do you get from this type of experience?
Western brands that communicate in China naturally exploit all the existing potential. But they don’t do it with the aim of replicating it elsewhere, as it is often difficult to imagine that what works in China could work in other markets. WeChat is a good example, which has failed to penetrate markets other than China. Many applications have been specifically developed for the Chinese market, but they have no value for the European market, for example. While some big brands are experimenting with ideas or very innovative campaigns in China, they only adapt them very exceptionally in other countries. On the other hand, it is certainly a source of inspiration.

GenZ’s consumer habits in China seem to be marked by a great deal of freedom of action and creativity. As for Switzerland, it is a much more conservative country, where discretion is a quality. This can be seen in Swiss brands, especially in luxury goods. How do you think Swiss brands should position themselves on this target group in China?
In the high-end segment, the watchmaking sector is certainly the most strongly associated with Switzerland, including in China. On the other hand, high-end watches are perceived very differently from other luxury products, such as accessories or leather goods. Watchmaking is primarily aimed at male consumers, although women are gradually getting interested. If, in the past, buying a watch was mainly intended as a gift, this is no longer the case, especially since the implementation of anti-corruption laws. The oldest brands, which have been present on the Chinese market for a long time, suffer a little from this pejorative image. But it’s easier for newer, less known brands. You can feel proud to wear a valuable watch that other people may not recognise.

It’s almost a paradox: to sell a brand, it has to be known, but whoever buys it doesn’t want it to be recognised. How do you solve this equation?
It’s not the case for all brands. For slightly cheaper ones, this problem doesn’t exist. For some less well-known brands, but which have special technological features or offer limited editions, the potential with young people exists, because they are attracted by innovation.

Do young people have the financial means to buy such goods or do they make huge sacrifices to purchase a branded product?
Consumers who buy high-end watches are more likely to be the « nouveaux riches ». There are many entrepreneurs in China who were very successful very early on, especially in start-ups. The 2nd generation phenomenon is also important: successful parents who got rich spoil their children very generously at a very early stage. The one-child policy also conditions this state of mind, because you don’t wait for inheritance to pass on part of your fortune to your child.

Is a good communication strategy, combining online and offline, the best recommendation for a luxury brand in the Chinese market?
China is a highly digitised country, as is the entire consumer experience. The COVID-19 pandemic has further reinforced this fact. But we should no longer ask ourselves the question of choosing between digital, offline or physical. We must offer the best customer experience to the consumer. This guideline is the basis for all creative ideas and campaign designs. We try to capture the audience where it is. Today the trend is to offer a physical experience. The « touchpoint » is digital, but the consumers reached online are invited to participate in a happening, to meet a star or their favourite muse, or simply to go to a pop-up store. Alibaba has also embarked on the « new retail » road, by launching the Hama Stores, a new generation grocery concept where physical experience and online shopping are closely connected, for the consumer’s comfort and convenience.

In many European countries, the tradition around a brand is an important value: history, generational know-how, etc. Do these values have a meaning for GenZ in China or is it rather design and current fashion that prevail?
The notion of tradition and heritage is essential for the Chinese, even among the young generation. In China, heritage has suffered greatly from modernisation and traditions have lost their visibility. China’s history is extremely rich, but the modern era has been marked by difficult times. With the current economic and social boom, most Chinese people have a real lust, almost an obsession, for luxury goods. The new generation is not just a « digital native » generation, it’s also a « technology native » one. Technological products are also highly coveted.

Until a few years ago, major Swiss watch brands were primarily interested in Chinese tourists visiting Switzerland. This trend has been reversed by the Chinese, who now prefer to buy locally. How should Swiss brands support this development?
Before the pandemic, watch brands and retailers relied heavily on tourism from China. All you had to do was to prepare your shop, hire Mandarin-speaking staff and it worked. Buying watches was part of the purpose of Chinese tourists’ travels. « Incentives » were set up in China to encourage consumers to buy locally. This trend has intensified with the pandemic and it will take years until Chinese tourism returns to its pre-pandemic level.
As a result, Swiss watch brands must adapt their strategy to Chinese market habits: reinforce their digital presence in China, including on social networks; develop their own online sales platform or ensure a presence on existing platforms. Some of these platforms already have « luxury » sections. For brands without physical or digital point of sale, sales will be difficult. If there is enough potential, the opening of physical points of contact is important, for example in pop-up stores, because investing in the creation of an own point of sale can be expensive and risky. In large agglomerations (Tier 1 and Tier 2), competition is already very high. Smaller conurbations (Tier 3 and Tier 4) offer excellent potential. There is less competition and consumers are highly interested in traditional brands.

Aren’t Chinese consumers afraid of counterfeits when buying luxury goods on the Internet?
Counterfeits exist and will always exist, but the market for copies is a separate, almost parallel market. On major online sales channels, including WeChat, there is an assurance that the origin of the items is official, since all brands have to be certified. It’s a guarantee for the consumer.

Apart from consumer goods, is GenZ – the older age groups, e.g. over 20 – receptive to financial products, investments for pension purposes and building its financial future?
Not yet. Young Chinese people have little knowledge and awareness of such products, it’s not part of their concerns. It’s a bit different with the older generations. The Chinese invest with the prospect of earning money, not for their retirement. If young people spend everything they earn, it’s because they have great confidence in their future: they know that their country is politically stable, that the economy is growing, that their future is assured. They will receive money from their families, they will find a good job, they will succeed in life.

This study will be the subject of a detailed presentation in the coming months. To receive a summary of the study,, please follow this link.




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