The Influence of Cultural Values and Emerging Societal Trends on Modern Day Consumerism in China

What do you need to know about the Chinese consumer in 2019?

Every November, all eyes are on China’s Singles Day, the world’s biggest online shopping festival that was launched by the Alibaba e-commerce group some 10 years ago.  Alibaba itself boasted another record-breaking year in 2018 with sales that reached £24.1.8 billion (up from £19.8 billion last year) followed by competitor (£18 billion) and many other Chinese and international e-retailers. Yet beyond the staggering numbers involved in this operation, it is interesting to look at Singles day in the light of what it reveals about the Chinese consumer and how their behavior is evolving over time:


The rise of the individualistic shopper

In China’s group oriented society, much of the buying used to be for others. Only a few years back, retail survey after retail survey revealed mostly women buying for their families and husbands, or men buying gifts for other men or for significant others. Yet Alibaba banked on an important consumer insight with its launch of the Single day shopping extravaganza: in China’s prosperous cities, much of the wealth is generated by millennials, a generation of only children who grew up rather materially spoiled and have developed their own habit of individual spending.
In fact, a 2017 report from the Hurun Group and Media Planning Agency (MEC) reveals that 67% of China’s high net worth individuals (and 74% of high net worth women) gave themselves gifts last year.   Singles Day (which takes place symbolically on the 11- 11 every year) encourages this very un-Chinese habit of spoiling oneself and was positioned initially as an anti-Valentines day of sorts. While nowadays buying during singles day is no longer especially the predilection of singles, the insight attached to the shopping occasion is an important one:  "Self-gifting", fits in with popular concepts such as "xiao que xing" ("little but certain happiness"), "a sense of ceremony", and "love and pamper myself". So rather than simply buying an item, brands can leverage this growing self treating/self rewarding mentality to build emotional connection with their customers. Jewellery brands have realised this trend for a number of years now, with brands from De Beers to local brand Chow Tai Fook launching “self-treating” campaigns aimed at Chinese women.

Quality, Practicality and Uniqueness replace price 

Although Singles Day, much like black Friday in the West, focuses on price slashing, surveys reveal that price is no longer the leading factor in Chinese consumers buying criteria.  A survey done by Alibaba after singles day indicates that the preference towards quality vs. price increased to 81%:17% vs. 78%:20% the previous year (the remaining percentile being “neutral“.) The impressive results reported this year by high-end e-commerce participants such as Secoo, Farfetch, Vipshop, Amazon China and Little Red Book, also indicate that the more expensive luxury brands are now successfully jumping into Singles Day action.

For Western products this is good news, as the West is recognised for offering higher quality products.  However, Chinese consumers, especially those born from the ‘90s onwards, are recently also growing more attracted to Chinese made products. Hence, the quality promise proffered by Western brands must increasingly be backed up by actual quality perception on use as well as user endorsements.

In terms of gifting, the Hurun/ MEC report reveals a number of other criteria, alongside quality, that are regarded as being important.  These include "practicality", "uniqueness" and "attractive packaging". Whilst prestige and branding still count greatly, practical considerations have seen items, such as electronics, explode in popularity as gifting items. Apple took the number one luxury gifting spot in China, ahead of Hermès in 2014, and has stayed firmly planted in its top position for the last 4 years. Yet it’s worth noting that domestic mobile brands Oppo, Huawei and Xiaomi now lead in sales nationwide, highlighting the important difference between buying for usage and for gifting.


Finally, feeding into the cultural Chinese motivations for gifting, both uniqueness and packaging are key as they are tightly related to imperatives like ‘giving face’ (mianzi) and ‘building network’ (guan-xi) that are part of what makes the wheels of Chinese society turn.  Unique gifts are seen as a perfect way to distinguish oneself and show attention and care to the recipient. Jessica Zhang, marketing director of a Beijing luxury hotel, identifies a number of rising trends that fall into this category, such as customisation (for example Johnnie Walker bottles personalised with the recipient's name) and experiences (such as travel), instead of a physical gift. As to presentation, Zhang explains how good packaging is key. “The typical gift packaging, especially at the high end, should be made of solid quality material, and comprise of several boxes and external packaging, encasing and ‘sublimating’ the item contained in it, in order to honour the recipient.” She gives the example of The Beast, an online and brick and mortar flower shop based in Beijing, which shot up in popularity by selling roses in elaborate Lanvin-branded boxes.


Wechat, Webuy…

As much as e-commerce has transformed the face of retail globally, the major role of social media as a sales channel is quite uniquely Chinese. Having been subjected to ubiquitous state propaganda on one hand, and exposed to product scams on the other, Chinese consumers are not great believers in mass advertising. Their trust follows the guanxi (or relationship) lines – hence the rapid rise of social media as an effective channel for recommending and building brands, and more recently, selling them via “mini shops” and “mini programmes”.  The Chinese Generation Y and Generation Z specifically live and breathe social media, and make up to 70% of their purchases through this channel.

This year witnessed WeChat, China’s ‘Super App’ with more than 1 Billion active users, become a major channel for the Single’s Day sales.  Amongst other top performers, a stand out was lifestyle e-commerce platform Yitiao, a 4 year old start up which recorded RMB 88.1 million in sales through its Wechat mini programmes, a 6 fold increase from 2017.  Yet selling on Wechat means adapting to a medium that is very different from a typical online shop. Unlike e-commerce websites, it is not searchable by product, so notoriety has to be grown via interesting content and a viral spreading of the brand buzz. 


Chinese young consumers love games as part of their online shopping experience. Asking consumers for their opinions, having them vote for options or staging mini contests are all good ways of engaging them. During the past Singles’ Day, e-commerce site Farfetch unveiled a sophisticated WeChat mobile game that lets readers test their knowledge of global luxury brands and gain “fashion points” which they could ultimately use to win a special Singles’ Day gift package: A Chloe Drew Bijou handbag, and a coupon worth £500 or £110.

The way Wechat works also explains the power of KOLs (Key Opinion Leaders) and Wanghongs (literally “hot on the internet“, China’s army of lesser influencers) in furthering sales. China’s most popular fashion blogger, Gogoboi, who has 7 Million followers, launched his own WeChat store in 2017 off the back of his popular fashion blog. Recruiting the right KOL for one’s brand is thus an important consideration for brands, and it certainly serves to be ahead on the curve in identifying “what and who works”. As such, French beauty brand Guerlain recently recruited actor Yang yang to be their brand ambassador for lipstick, recognizing a trend in China for “pretty” boys being attractive KOLs for women.


Single Day, China’s biggest yearly shopping event, is therefore a prime example of observable consumer behavior as well as a good place to follow shopping trends. As always, it is important to understand the unique combination of deep cultural attitudes and current technological and societal trends that make up the behavior of the Chinese consumer.


About our Consultant:

Felicia spent 13 years in China working for ad agencies Ogilvy and Dentsu. In addition to her work as a Consultant for Farnham Castle Intercultural Training, she has recently launched China Insight, providing in-depth, culture-anchored insights on Chinese consumers.

THE KEY TO INTERNATIONAL BUSINESS SUCCESS : Cultural Skills for Business in the Global Mobility Arena...

With the rise of the Global Manager, and the importance of the adaptation of strategy for understanding and communicating from one culture to another, there has never been a more important time for Global Mobility Specialists to appreciate the importance of the contribution that Cultural Awareness makes on the pathway to senior leadership roles; for creating an agile talent pool; and to maximise the impact and efficiency required in every long term, short term or developmental assignment.

Staggering statistics indicate that at least one in every four International Assignments fail!

The reasons given are usually cultural challenges, family issues, homesickness and the inability to adapt to the local business culture, where a seemingly insignificant or trivial mistake can jeopardise working relationships and immediately affect business success.

An awareness of cultural differences and sensitivities, in other words, having a Global Mindset, will minimise and mitigate costly misunderstandings, promote better communication, and manage expectations ahead of the assignment.

But it’s not quite as simple as that…

What are the elements that impact on business relationships across borders? What are the critical elements for different cultures? How can assignees recognise these critical elements and ‘learn’ how to adapt their own approach in order to work more effectively with foreign clients, colleagues, counterparts, partners, suppliers or customers?

A recent study reported that 91% of Companies see a Global Mindset as ‘mission’ critical…

BUT do assignees really know and understand the Cultural Rules of Engagement, DO companies really understand the scale and importance of cultural issues, and are they really aware that most issues are both country specific and unique to each country or culture?

Every assignee will already have their own cultural mindset (the one that they’ve developed from birth, by exposure to the culture in which they’ve grown up) and every assignee will have their own pre-conceptions of other cultures. If assignees need a Global Mindset, for ‘mission’ success, then they need the Cultural Intelligence to recognise cultural differences. They also need country specific knowledge, and an awareness of business and social etiquette, in order to be properly prepared for their ‘mission’. This Global Mindset must be learnt, and it is unsurprising therefore, that the relevant training and support can make the crucial difference between an assignment’s failure and success. The relevant focus on those elements that increase an International assignee’s effectiveness in the target country, is therefore vital to a successful assignment…

  • It transforms the assignee experience

  • It provides valuable tools and strategies to expedite adaptation

  • It significantly reduces the risk of frustration and culture shock, by managing expectations within the cultural setting; and

  • It eases the burden of the Global Mobility Manager

With the expertise that Global Mobility training delivers, the benefits are financially tangible from recruitment and selection, to project support and repatriation, in fact, throughout the entire assignment cycle, providing a positive impact on relationships and productivity. It’s no coincidence that in a recent study of Business Professionals, the results conclusively showed that the impact that a Global Mindset had on professional success, meant that Professionals with that mindset:

  • Were three times more perceptive, adaptable and productive

  • Felt twice as valued as other assignees; and

  • Were four times more likely to be promoted

The challenge for any organisation doing business internationally is, therefore, not only to appreciate the importance of understanding cultural diversity, but to enable its integration within the business strategy, in the context of its business goals.

If a business needs to:

  • recruit or develop a Global Workforce

  • employ frequent cross border travellers

  • relocate people to other countries on temporary or longer term assignments

  • work with culturally diverse, remote or virtual teams; and

  • secure new International Business or develop existing International Business in the Global Market place

then to stay relevant and competitive, the correct Global Competency Framework is required.

What’s important is to achieve the right strategy, for the right people, in the right International Market.

Success will follow!


Business Success in ASEAN – Why Cultural Awareness is Crucial

Written by Jonathan Rice, Senior Consultant at Farnham Castle Intercultural Training

The ten nations of ASEAN are growing in economic power, and their markets represent a major opportunity for UK businesses, especially in our uncertain post-Brexit world. However, whilst it is a routine – if not necessarily easy – process, to work out the value of your products or services to the people of South East Asia, getting that message across is a far more complicated matter.

ASEAN countries may be close to each other on the map (although flying from, say, Manila to Jakarta is hardly a quick hop), but culturally they are very different, and there is a great deal of potential for unwary foreign business people to trip up. For a start, there are three major religions which shape the cultures of the region – Islam in Indonesia, Malaysia, Brunei and the Southern Philippines; Buddhism in Thailand and Myanmar; and Christianity in the former French areas of influence of Vietnam, Laos and Cambodia, as well as in the majority of the Philippines. Singapore stands slightly apart in terms of the importance of religion in the daily lives of its people, but all religions are represented on the island, including Sikhism and Hinduism. It is vital to ensure that you are aware of the impact that these different faiths will have on your business dealings within the region.

Politics is another matter. In many parts of the region, religion and politics are closely linked, but in others they are carefully separated. The best advice is to steer clear of political discussions as much as possible.

Throughout the ASEAN region, you will find that people are less individualistic, and more likely to think in group terms, than we are in Western Europe and North America. Never talk up your own skills at the expense of others, and always be proud of your Company.

Alongside this tendency to identify with a group, comes a strong sense of hierarchy. Respect is given to people of a higher rank in a Company, and in wider aspects of society, simply because of their position. People are often referred to by title, rather than by name, so the title on your business card sends a powerful message. This respect for rank is something that visiting Westerners need to take note of, even though it is not the same across the whole region, being much more marked in Malaysia than in the Philippines, for example.

In general, you will find that family takes a very important place in the daily lives of the people you will be working with. Whilst we, in the West, try to battle with the work/life balance, with work winning out rather more often than it should, in Southeast Asia you will find that family events take precedence over work requirements, in a way that will seem surprising to the visitor. This sense of family is very strong, and the word itself does not just define the immediate nuclear family of husband, wife and children, but takes in cousins, uncles, aunts and so on. The ‘head of the family’ might be somebody’s great-uncle, an old man who many members of the family hardly know, but his role and influence in their lives can still be powerful.

Hierarchy, group identity, and respect for age and rank are common themes throughout the region, and these traits tend to create tight knit societies which can be hard to break into. Networking and getting to make friends of the individuals in the Companies you deal with, is important. This all takes time, of course, so patience and persistence are other qualities that are extremely useful in creating business opportunities in the region.

A final thought – practically all of the countries of ASEAN were for several hundred years, until only about 60 years ago, colonies of European powers, mainly British, French, Spanish or Dutch. This experience means firstly that there is an intense pride in their independence as nations, but also that there is a degree of shared cultural experience with Europeans that is very useful in building bridges of understanding. The superior Westerner is not appreciated. The person who adapts their business to the local cultural needs and habits, will prosper.