It’s almost hard to believe that Covid has only been with us for a year; the global pandemic seems to have completely reshaped how we live, work, shop and entertain ourselves. And there’s no doubt that some of these changes – such as homeworking, online shopping and social distancing – may be with us for the longer term. With that in mind, let’s take a look at how Covid-19 has changed the Chinese economy – and what the takeaways are for Western marketers, seeking to grow their brands in this ever-powerful, resilient market.

After all, as McKinsey titled its China consumer report 2021 – Understanding Chinese Consumers: Growth Engine of the World, China is the world’s growth engine, and savvy Western brands are determined to be part of its success story!

1. Digitisation is bigger than ever

Covid has accelerated digital adoption in China, not only in B2C markets but also B2B processes and markets. Before the pandemic, China led the way in digital B2C with 45% of the world’s total e-commerce transactions and a mobile payments penetration rate 300% greater than the US. However, this looks set to grow further. For example, McKinsey found that 55% of Chinese customers will continue to buy groceries online and Nike experienced a 30% year on year digital sales growth after it launched its app-based home workouts.

2. Greater domestic trade

China’s global exposure has been declining over the past couple of years, particularly as Chinese-US tensions grew under President Trump, and as its domestic markets became incredibly strong and perfectly able to meet consumer demand. However, this isn’t to say that global brands will find themselves made irrelevant by home-grown Chinese competition. The burgeoning Chinese middle classes are still clamouring for luxury, heritage and desirable Western brands and with the Chinese economy set to grow in 2021, sales are expected to strengthen in this already powerful market.

3. Competitiveness is set to grow

China is already heavily competitive, but this degree of competitiveness is expected to grow. Smaller brands who have not invested in the right digital infrastructure – or who are not prepared to invest in a way that allows them to compete in the increasingly online world are likely to find that their sales erode. Large parts of the Western economy are expected to rocket back into action in 2021 – in Britain, for example, the Chancellor has described the economy as a coiled-up spring, waiting for lockdown restrictions to end to begin full and open trade once again. This means that businesses operating in China are likely to be strategising hard and preparing to invest in their e-commerce and digital channels to grab and secure a slice of their target Chinese market. Be prepared to move fast, and move hard in the fight for Chinese consumer spend!

4. Chinese consumers are maturing

The young and affluent generation in China has grown up without experiencing a domestic economic downturn of any kind. Now, the experience of Covid is encouraging them to spend more wisely, to save more and to choose better quality products that support their health and wellbeing. Again, this offers an excellent opportunity to Western brands which can exemplify these attributes and quality in their product offerings. For example, McKinsey found that 70% of younger Chinese customers are expecting to actively seek out eco-friendly, safe and healthy products – and to spend where these quality attributes are evident.

5. Private and social sectors are considering their impact

A number of big Chinese brands, such as WeChat and AliPay, played a crucial role in supporting the government’s efforts to control Covid by supporting a QR code health app rollout. The Bill & Melinda Gates Foundation notably donated millions in aid to support efforts to tackle the virus and its effects on poor communities across the world. Savvy brands in China are waking up to the fact that social marketing is big business and that educated customers want to patronise brands which are sustainable and which make a positive impact in the world. From supporting charities and eco-friendly initiatives to developing products which tackle carbon emissions, Western brands should consider how they integrate these social benefits into their marketing and their overall business plans, to make a difference – as well as a profit.

6. Chinese customers are ready to spend!

Research by McKinsey has also found that Chinese customers are feeling buoyed by the way that the country handled the pandemic, and are now feeling confident, optimistic and, above all else, ready to spend! After living through lifestyle restrictions and often onerous lockdowns, these consumers are ready to enjoy and appreciate life once again. This means that they want to treat themselves, to pursue interests and passions, to upgrade their lifestyles and to enjoy the best of things.

Western brands in sectors such as beauty, homecare, wellness, interior decor, fitness, lifestyle and – hopefully as the year progresses – travel, will find themselves extremely well placed to benefit from this surge forwards to a restored marketplace. Those in education are also likely to find a fresh spike in enquiries from prospective students looking to pursue their ambitions once again. Importantly, too, Chinese customers look ready to engage with new brands once again, especially as supply chains begin to operate freely again, and as delays and supply projects begin to resolve.

Marketing your brand in the post-Covid world

At Market Me China, we can feel the optimism of the Chinese markets, and we see how Chinese customers are spending freely once again. Our clients are launching back into strategy planning and delivery mode in response, with fresh campaigns, improved digital assets and a determination to capture lucrative segments of their target Chinese markets. The time to act is now, with Western brands already working hard to capture Chinese customers and to build brand recognition and loyalty using highly-effective, omnichannel digital strategies with the power to convert leads to sales.

Contact us

The digital marketing team at Market Me China is here to help you achieve success in the Chinese market, with a highly experienced and skilled digital marketing team that blends together native Chinese and Western marketers into a highly impactful, results-focused team. We work according to each client’s needs and evidence our value at every turn. To find out more about how we might assist you, please contact our friendly and helpful team today for a no-obligation chat.