"Korean Companies Should Focus on 5C to Capture China's Consumer Market"

Five Key Keywords: Shared Prosperity, Carbon Neutrality, New Consumption, Contactless, and Metaverse

[Asia Economy Reporter Park Sun-mi] To capture this year’s Chinese consumer market, Korean companies need to focus on five key keywords: ▲Common Prosperity ▲Carbon Neutral ▲New Consumption ▲Contact-Free Service ▲China's Metaverse.

According to the “5 Keywords to Understand the 2022 Chinese Consumer Market, 5C” published on the 14th by the Shanghai branch of the Korea International Trade Association, the Chinese consumer market has been significantly contracted due to the prolonged COVID-19 pandemic, the spread of variant viruses, and strict quarantine policies to control them, showing a gradual slowdown in consumption-led economic recovery. The contribution of final consumption to China’s economic growth rate dropped from 9.8% in Q1 2021 to 3.4% in Q4.

The association forecasted that this year the Chinese government will introduce various consumption stimulation policies with the main goal of revitalizing the domestic consumer market. In January, the Chinese government lowered the Loan Prime Rate (LPR) by 0.1 percentage points from 3.8% to 3.7% for two consecutive months to supply liquidity to the market, and from the beginning of the year, it announced notifications related to consumption promotion work, demonstrating a strong will to activate the consumer market.

The first keyword Korean companies should pay attention to in the Chinese consumer market is Common Prosperity. The Chinese government has positioned the Common Prosperity theory as a national policy direction, and this year, alongside accelerated urbanization, a revival of the new middle class, consumption guarantees for low-income groups, and expansion of public services are expected.

The second keyword is Carbon Neutral. To achieve the Chinese government’s carbon neutrality goals, many changes are expected in the daily lives of individual consumers this year. In particular, the markets for recycled consumption and green food are expected to expand.

New Consumption also deserves attention. It is evolving into methods tailored to individual consumer preferences, such as short clip live commerce and C2M marketing, while policies to prevent indiscriminate entry into this market are also expected to follow.

Contact-Free Service and China’s Metaverse are also important keywords. In China, due to labor shortages and rising labor costs, the unmanned economy in the service industry is rapidly advancing, and the unmanned economy is expected to expand in daily life sectors such as transportation and healthcare. Additionally, amid the coexistence of government regulations and support related to the metaverse, some companies are developing hardware device-centered advancements. Major IT companies are expected to continue investing to secure market dominance within the scope of metaverse technology utilization in China.

A representative from the Korea International Trade Association advised, “The Chinese consumer market in 2022 is expected to undergo various changes, and our companies should closely monitor changes in Chinese government policies related to the five keywords (5C) and seek entry into promising product and service sectors.” He added, “In the five key keyword areas, government regulations coexist with new business opportunities, so market preemption is necessary.”

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