The management consultancy McKinsey recently published a major study on trends in the Chinese market, particularly in terms of consumption, given the difficulties the country’s economy is facing in the wake of the Covid-19 pandemic.
The conclusions of the study highlight above all the need for great resilience on the part of companies active in this market, as circumstances are not exactly easy.
McKinsey consultants highlight five important trends, which we discuss below:
1. The middle class continues to grow: over the next three years, more than 70 million households are expected to join the upper-middle and upper-middle income category, the fastest growing part of the middle class.
2. “Premiumisation” remains the order of the day: even in difficult times, premium brands continue to be more commercially successful than FMCG brands.
3. Smarter decisions, but without lowering expectations: the use of technology, social media, messaging apps, etc. allows consumers to still be able to buy the brand they are looking for, but almost always at exceptional conditions.
4. Everything revolves around the product: Consumers are very well informed about the items they are interested in, they know the ingredients of their favourite cosmetics, etc., again thanks mainly to the role of technology and its omnipresent use in society.
5. Local companies win: As we have already pointed out on other occasions, China is changing, local values and products are gaining consumer preference, to the detriment of the position of international brands. Only those global companies that know how to adapt to this situation in terms of range and marketing will be able to maintain (or even improve) their position in an increasingly competitive market.
These five trends have very important implications for companies wishing to capture (or at least maintain) a substantial share of the consumer market in China.
Implications in terms of greater resilience and adaptability.
Source: https://www.mckinsey.com
