Chinese millennial shoppers are shifting toward an emphasis on life experiences, convenience, and a healthier lifestyle according to a PwC report on China’s retail and consumer products sector.
The shifting demographics and consumer behaviour are leading the changes of retail in China with younger, urban, more affluence consumers according to PwC. Chinese millennials, a combination of post-80s and post-90s, composed roughly one-third of China’s total population in 2014 based on estimates from Goldman Sachs.
Luxury brands have to rethink their strategy due to downturn luxury retail sales, including an expanded online presence and creating ‘affordable’ luxury products. PwC thinks sales are likely to gradually rebound as cyclical trends turn positive.
Apparel and footwear sales remain resilient with the rise of ‘fast fashion’, ‘premiumisation’ products, and the continued popularity of sports and lifestyle brands with consumers.
Sales in personal and beauty care products remain buoyant in China. According to the PwC report:
Younger consumers’ interest in personal appearance, as well as an expanding line of beauty and environmentally-friendly products, is likely to promote growth in the segment over the short-term
Sales of consumer appliances are decelerating in China and remain sluggish in Hong Kong.
PwC offers a number of insights for companies in the retail and consumer products sector:
- Deepening coopetition: New market entrants challenge established business models;
- Transformative mergers and acquisitions: Moving up the value chain;
- Creating trust: A retailer’s online presence is not exclusively for selling or marketing;
- Data is value: Leveraging analytics and the proper use of data
- Increasing corporate social responsibility