'Generation Z' Leading China's New Consumption Trends

[Asia Economy Reporter Hwang Yoon-joo] Recently, it has been argued that the Generation Z (young generation born from the mid-1990s to the early 2000s) is leading new consumption trends in the Chinese consumer market, necessitating changes in marketing strategies for Korean companies.

According to "China's Generation Z Leading New Consumption Trends," released on the 4th by the Shanghai branch of the Korea International Trade Association, the population of Generation Z born between 1995 and 2009 in China was approximately 260 million as of 2019, accounting for 18.6% of the total population. China's Generation Z is further divided into 'idol fandom group,' 'subculture fandom group,' and 'patriotic consumption group.'

Seventy-eight percent of the idol fandom group are women, who mainly consume through media commerce specialized apps where content consumption and product transactions occur simultaneously, such as Xiaohongshu (小??), the Chinese version of Instagram.

On the other hand, the subculture fandom group is a consumer group with a majority of men, characterized by enthusiasts of animation, comics, and online/mobile games who are passionate about related content. In 2019, the market size of webtoons and online animation in China reached 16.46 billion yuan and 2.68 billion yuan respectively. As the subculture industry in China continues to grow, companies producing daily necessities such as beverages, mobile phones, and lipsticks are actively collaborating with game companies for marketing purposes.

The patriotic consumption group prefers cost-effective Chinese brands and Chinese-style (中式) designs. According to a survey by the Ali Research Institute, over 50% of purchasers of Chinese domestic brands are Generation Z. The quality of Chinese domestic products has rapidly improved, and with the government's promotion of domestic brands since 2000 and China's rising international status recently, a patriotic consumption boom is underway.

Shim Jun-seok, head of the Korea International Trade Association's Shanghai branch, said, "China's per capita national income rapidly grew from $540 in 1985 to $10,410 in 2019, and Generation Z is a generation born alongside China's economic growth." He added, "However, having grown up witnessing the economic difficulties of their parents' generation, Generation X, even in an affluent environment, Generation Z also shows practical consumption tendencies. Therefore, segmented marketing targeting key groups is important to effectively target Generation Z."

This content was produced with the assistance of AI translation services.