How Covid has changed commerce in China

There is no doubt that the Covid pandemic had a severe impact on the world’s economy, and countries are still working hard to get back on track after a prolonged period of economic downtime, impacted supply chains, decreased production and rising inflation.

But where the pandemic forced changes to the ways that we lived and worked, some of those adjustments have led to more permanent shifts in consumer behaviour in China and in the West. In this post, we’ll look at how Covid has changed commerce in China, and what this means for Western businesses marketing in this vast and growing economy.

Changes to consumption patterns in the fashion industry

China’s affluent middle classes have long been fans of luxury fashion, but customers are now also demanding ethical manufacturing practices and eco-friendly business models, alongside the growing trend of personalisation. Chinese fashion houses are already using recycled packaging, sustainable fibres, green product development and other eco-friendly strategies to win and retain customers. They are also responding to the demand for customised production, with made-to-order products, personalisation options and bespoke experiences, all of which meet Chinese customers’ demands for unique, sustainable and value-driven brands that truly understand their needs.

Western brands operating in China have an opportunity to market their sustainability and environmentally-friendly credentials to win hearts and minds amongst socially-conscious consumers that like to display their values and credentials through ethical consumption.

Opportunities for Western Higher Education Institutions

Young Chinese graduates struggled to find work in 2021, as the graduates of 2020 were still seeking employment. As a result, many are looking to continue their studies to open up their opportunities as far as possible. A study in Hunan found that 21% of graduates were looking to continue their studies with postgraduate studies, with many considering courses overseas that would also expand their horizons and open up opportunities for work abroad.

Western HE institutions have a positive opportunity to promote their postgraduate programmes, including MBA, to Chinese graduates that are keen to delay entering the jobs market in China and who are equally keen to broaden their horizons in the international market.

International travel

Chinese travellers are desperate to resume their global travel habits and demand for international travel is growing once again, where local Covid regulations allow and facilitate international tourism. This offers a fantastic opportunity for Western destinations and for travel services, with rising demand and a strong desire to experience the best of life once again. Western travel destinations and services, such as hotels, restaurants, concierges and chauffeur services can provide reassurance on their Covid-safe practices, cleanliness and hygiene, excellent customer service and money-back guarantees for peace of mind, for example, if Covid prevents Chinese tourists from travelling once they have booked.

Mobile gaming booms

Mobile gaming figures in China grew faster than the country’s overall economic growth figures, reflecting the greater amount of home time that Chinese people were experiencing during lockdowns. And China’s love for high-tech, mass-participation, digital-enabled gaming continues as the market becomes increasingly sophisticated, dynamic and inclusive. Western gaming brands can leverage this trend with their own ready offerings, working with localisation experts to provide rich, targeted gaming experiences that will win new customers in this growth market.

Livestreaming is growing

Internet live streaming is enjoyed by over 400 million customers in China across over 200 platforms, each with its own target audience and purpose. Livestreaming allows Chinese customers to connect in real-time, and learn about new products and services from KOLs on Taobao, Tmall, Weibo, WeChat, JingDong, and Meipai, amongst others. The livestreaming trend certainly had a boost over lockdown, as connected Chinese customers found themselves at home with time on their hands – and with China’s burgeoning delivery industry able to operate and bring e-commerce purchases directly to addresses! This now-embedded trend is still growing fast and live streaming offers huge opportunities to Western brands who are keen to use KOLs to engage with potential customers and sell during campaigns and big events, such as Chinese festivals.

Digitisation touches every aspect of Chinese life

Research by McKinsey found that digitisation is now present in almost every aspect of Chinese life – far more so than in the West. On a typical day, a Chinese customer might buy their groceries online via Taobao, enjoy a mobile app workout with Nike, view property on Beike, communicate with work colleagues on DingTalk and game with friends over the internet.

Western brands can offer digital routes to their products and services via websites, apps and Chinese social media, with a ready audience keen to enjoy rich, targeted and meaningful content that adds real value to their lives, not to mention high-quality, sustainable and unique Western products. On that last point, it’s interesting to note too that younger Chinese customers, in particular, are showing a continued interest in shopping online, buying eco-friendly and safe products and also investing in products and services that boost their healthy lifestyles.

The Chinese marketing landscape is continuing to evolve

Western businesses must also be on the lookout for rapidly emerging trends in China and be ready to capitalise on them. For example, two post-Covid trends – outdoor lifestyle and health have combined to create a new craze for cycling in China. In particular, young consumers are buying luxury bicycles and designer cycling apparel, and the lifestyle platform, Xiaohongshu (Little Red Book), has nearly a million cycling-related posts! These types of consumer trends offer fantastic opportunities for Western brands to market their products to ready customers in China, especially if they can expertly leverage their digital marketing channels to the best effect.

What this means for Western businesses

You have now understand how Covid has changed commerce in China. China might have experienced a 6% economic decline during the pandemic, but its subsequent recovery has been unstoppable, with its economic growth hitting 8.5pc in 2021. For Western brands, this market is still incredibly enticing and offers an undeniable chance to build a profitable overseas business for Chinese customers. Digital marketing remains the key to success in the Chinese netizen nation and because China’s technological capabilities are so advanced, digital marketing strategies need to be slick, carefully planned, expertly executed and designed to operate faultlessly across platforms that do not exist in the West – such as WeChat, Weibo, Little Red Book and Baidu.