consumption trends china 2012

Consumption Trends

China 2012Jin Wu & Theresa Loo

Consumption Trends China 2012

Introduction

• China is changing at a dizzying pace. For some marketers, these changes

will unlock significant competitive advantages. For others, dealing with their

impact will be a major challenge. As change accelerates across the country,

the odds of missing a beat rise significantly. It‟s important therefore to have

your finger on the pulse – via the consumers.

• This is the second consumption trends forecast published by MEC China.

Some of the trends discussed in last year‟s report have become very

prominent this year. Others, such as Cluster-Oriented Consumption and

Sensory Experience Consumption, have evolved into other trends in this

new report.

• The ability to grasp the implications of new and upward growing trends will

give marketers an edge in tackling the market. The goal of Consumption

Trends China 2012 is to be a springboard to inspire marketers, and assist

them to come up with new business concepts, new products/services and

new experiences for consumers.

MethodologyImprovements have been made to the methodology in this round of trends forecast.

Similar to last year, we gathered input from over 50 trend scouts from different parts of

China. What has been improved was that we took the most frequently mentioned trends

and asked 565 consumers from 7 cities to rank them in an online survey. We then data-

mined a number of syndicated tracking studies on Chinese consumption and media habits

to find quantitative evidence to validate the top 12 trends.

50+ trend scouts from all over China

provided information on trends

Picked out the most mentioned trends

565 consumers from 7 cities ranked the trends in an online

survey

Conduced desk research for the top 12 ranking trends

Data-mined a number of syndicated

tracking studies for validation

Write up of report

Ranking of 2012 Consumption Trends

Ranking Trend

#1 Me Consumption

#2 Eco-Friendly

#3 Hybrid Economy

#4 Tech 360

#5 Virtual & Physical Worlds Seeping into Each Other

#6 Free??Free!!

#7 Lazy Consumption

#8 Grass Roots Decision Makers

#9 Alternative Sensory Experience

#10 “Com”plex Consumption

#11 World of Gamification

#12 Zhai

Source: MEC Trends Research 2011, 7 cities, N = 565

TREND 1 Me Consumption

The Chinese used to see „individualism‟ as a word with bad connotations,

applicable to people who only cared about themselves but not others. However,

the Chinese of today have come to see individualism as something to be pursued

and developed. They no longer live by the principle of “the bird that shows its

head gets shot.” Instead their unspoken slogan is “I have my own perspective”.

They are more eager to share themselves with other people and put themselves

in the limelight. The rise of personal media, including blogs, microblogs, and

personal pages, are good examples of this trend. An ordinary individual can now

have his or her own broadcasting platform. Each person is a source of

information, becoming the hub of his or her sphere of influence.

2011 2012Cluster-Oriented

ConsumptionMe

Consumption

Enthusiasm for platforms like blogs and microblogs is greater in China than in

most other countries. The Chinese, generally considered reserved and rather

private, ‟careful in word and cautious in deed‟, have taken to the age of self-

expression with alacrity. This is because the internet allows one to express oneself

under a pseudonym. This sense of anonymity, and thus safety from repercussion,

lets out a long pent up desire for self-expression.

Source: CC08S~CC11SUScope of survey: web users aged 15-40 in 30 cities2011S = Spring 2011 data; 2011SU = Summer 2011 data

Blogging/Blog Browsing Rate of Usage of Sina Weibo

% %

Personal Media

Show Thyself!

For the second season of “China‟s Got Talent”, there were more than 50,000

entrants. From the airing of the first episode, it was the most viewed programme in

Shanghai and the second most viewed nationwide.

Although in this respect, it was similar to the first season, viewing figures this year

grew by more than 50% both regionally and nationwide. It is evident that China‟s

passion for self-expression is on the increase.

The Chinese have moved

from expressing

themselves freely in words

on the internet to

appearing under the

spotlight as they really are.

This is yet another

breakthrough in self-

expression.

shai

You in

Writing

You in

Person

Everyone

Goes

‘Custom Made’

Source: CNRS2006~CNRS2010 Scope of Survey: 30 cities

Chinese do not just want self-

expression. They carry this into daily

consumption too and want to be

unique in every way.

% %

%

“I try to modify products I bought from

the shelf to make them fit my taste”

“I am willing to spend a bit more to buy

things that I believe are

original or one of its kind”

“I like to dress to be unique; to show that I am different from others”

TREND 2 Eco-Friendly

As the concept of environmental protection starts to get through to

consumers, isolated, random environmental initiatives are seen as

inadequate. Consumers now focus more and more on the concept of the

total environment. This means connecting together all the links of life into

a complete ecological chain, and deriving from this a whole environmental

way of living, rather than just a series of short-term initiatives. Green

activities are integrated into the surrounding environment to arrive at a

“complete” natural ecological system. For example, if you take the

decision to put a plant in a room, you also have to provide decent

treatment for the insects which it attracts, since the plant and the insects

together constitute an ecosphere.

58.5% of respondents stated that

they would be willing to change their

lifestyle to protect the environment.

Environmental protection no longer consists only of isolated, random

initiatives. More and more it is finding its way into every fabric of consumers‟

lives and becoming a way of living.

Source: CNRS 2011 Scope of survey: 36 cities

No Pollution Caused by

Environmental Protection

The Shanghai Eco-House was a Best

Practice at the 2010 World Expo. Its design

integrated five major ecological principles

(wind, light, shadow, green and waste) in its

structure and technical installations. It is a

showcase of what a „LOHAS‟ house, which is

conducive to a lifestyle of health and

sustainability, is like.

There is an environmental product called „zero

packaging plant‟. It comes in beautiful packaging,

with a soil and a plant. The reason it is called „zero

packaging plant‟ is because the beautiful packaging

can supply nutrients to the soil. This avoids

increasing pollutants in the course of buying green

products. The outcome is truly zero pollution.

Architecture with a life

The Shanghai Oriental Sports Center, opened in July 2011, was designed with

an eco-friendly concept in mind. A complete aquatic eco-system was built into

the man-made lake surrounding the sports center. It has put in phytoplankton,

zooplankton, shrimps, fish and decomposers etc. to make up a complete food

chain, so that the lake has the ability to self-cleaned.

TREND 3 The Hybrid Economy

• As the economy develops and the internet spreads, focusing exclusively on one’s own development is no longer a safe policy for marketers. More and more brands and categories are breaking out of their own protective cocoons and experimenting with new forms of joint ventures: cars team up with luggage, pension schemes with daily consumption. There is also the development of social TV, combining TV with mobile devices and social networking sites. It’s not just a question of one brand partnering with other brands, but the different approaches of wholly unrelated categories are now being coupled to meet consumers’ various needs.

Hybrid

Media

Vualla

Vualla is an application based on the iPad which fuses the

characteristics of TV, mobile devices and social networking to

create a completely new media form, referred to as „social TV‟.

Users can watch TV when and where they want, and also

share related information with friends at the same time.

TVmobile

devices

social

networking

sites

social TV

smart TV

Pension + consumption = ‘consumption pension’

• According to the „consumption pension‟ scheme launched by the Chongqing

government, the people of Chongqing can collect points on a card. When

they spend at designated shops, supermarkets, restaurants and hotels, these

businesses will reserve a certain amount and transfer it back to the

consumers‟ bank accounts to be paid into a pension scheme.

• So „spending‟ is not simply an outgoing transaction, it is also „earning‟ for the

future.

Hybrid Economic Modes EarningSpending

CrossoverIt has become quite a craze for brands in

different fields to cooperate in creating new

products. Cars join with real estates, luxury

goods with cars, and luxury goods with leisure

products. When such ventures are successful,

it‟s a win-win situation for both parties. Each

partner gains in consumer base and an

increase in awareness & preference.

TREND 4 Tech 360

Changes in lifestyles today make people more dependent on science and

technology. Individuals have around them a battery of hi-tech products, each

performing a different function. Yet there are all kinds of indications that

technology integration is becoming a major trend. The various technologies are

becoming invisibly linked, so that mobile phones can control TVs, or electric

lights can modulate audio effects. In future, consumers will not be dealing with

stand-alone high-tech devices, but will find science and technology penetrating

every facet of their lives. It will be an environment that is surrounded by

technology 360 degree.

Android@HomeBy the end of 2011, Lighting Science plans to

launch its first „intelligent LED light-bulb‟.

Mobile devices which have Google Android

(mobile phones, tablet PCs, palm-tops) will be

able to control these bulbs through a new

open source Wi-Fi protocol, so users will be

able to put their Android mobile devices to

work to adjust the lighting remotely at the

touch of a button -- easy, convenient, and

energy-efficient.

Gadgetnet

As the name suggests, the “gadgetnet” is a network

that links gadget to gadget. Its core and foundation is

the internet, but has extended to linking up gadgets to

exchange and communicate information. The

individual gadgets are more strongly interlinked than

ever before.

The Omnimedia Age

Cloud computing is a major driving force towards

integration of the media environment. Invisible

bridges appear between all the different channels,

and they link up with and act on each other.

Information picked up in one medium can then be

followed up in another medium.

Different media can also interact in real time,

allowing for the creation of truly collaborative

content.

Shanghai Media Group has a new entertainment

program, “Date on Saturday,” which has come up

with an App that allows mobile phones & tablet

PCs to interact with the TV program. Viewers

can sign in using QR-codes and interact with the

celebrities on the show. They can also look for

like-minded individuals via LBS technology. In

this way, there is seamless integration of the big

and small screens, providing an omnimedia

experience to consumers.

TREND 5

Virtual & Physical Worlds

Seeping into Each OtherIt is becoming more difficult to make a

completely clear distinction between the

virtual world and physical world, and

consumers can shuttle between them at

will. Relationships, experiences and

emotional exchanges in the virtual world

inevitably have a direct or indirect effect

on consumer behaviour and purchase

decisions in the real world. Similarly,

experiences in the real world will

determine consumers‟ opinions, attitudes

and influence in the virtual world. The

virtual and the physical worlds affect and

change each other, and the boundary

between them becomes ever more

tenuous. The growth of the O2O (Online

to Offline) mode cannot be ignored.

Source: CMMS2003S~CMMS2011SU Scope of survey: 15-40y.o. in 30 cities

The Virtual

„Lights Up‟ the Real

“Virtual Buying Guide”

QQ Show, which lets consumer try

out clothing on a virtual image, also

displays at the bottom of the page

garments and shops on Taobao

which match the clothes consumers

are trying on. This makes it easier

for consumers to buy.

The virtual world is acting more and

more as a guide to real life, and is

having an enormous effect on actual

consumer behaviour.

“When I need information, the first thing I

think of is to search on the internet”

%

%

“Websites usually visited on the internet are

related to information on lifestyle”

Taobao Mall in Beijing set up the first offline experience centre for home decoration, bringing

together e-shopping and offline sampling. This is to facilitate consumers to make better choices

when they buy online. When consumers have finished looking at the products in the physical

world, they can go straight to the service terminals provided, log on to Taobao, and place orders.

Consumption Offline

+

Posting Online

Offline Creates Online

Chinese love to comment and share online. For

more and more restaurant diners, the first thing

is not to eat but to tweet. They instantly publish

their reactions to the food on the internet,

sharing them with other people.

Experience Offline + Action Online

QR-Code

Shopping

Mobile phone QR-code scanning involves applying the mobile’s image-recording ability to the scanning of QR-

codes and retrieving the information stored there. This is

followed by further steps such as going online, sending a

text message, dialing a number, exchanging information,

or entering text automatically.

E-shopping is no longer just an

online activity. It is increasingly

penetrating consumers‟ real lives,

becoming available at any time or

place.

Yihaodian, the famous online

supermarket, offers QR-code

shopping in every big Shanghai

metro station. Each product shown

in giant LED advertisements has its

own QR-code, which consumers

can scan with their mobile phones.

The product then goes into their

Yihaodian virtual trolley and

consumers can proceed to check-

out online.

AR Online Dress Show Using the latest augmented reality

(AR) digital technology, the

Yishion clothing brand has

launched its “AR online fitting”.

After consumers buy a Yishion

product they will be invited to take

part in this activity digitally. With

a web-cam, they can try out

different outfits with AR-codes,

take photo shots and make them

into a video at the same time.

This video is then combined with

Han Geng into an advertisement

for the product, with the consumer

becoming the star of the ad.

This is not just a fusion of offline

with online. This mode is great for

promoting sales in stores.

TREND 6 Free??Free!!In times when almost every product/service

goes into a price hike, the appeal of “free” as

a marketing concept is obvious. Nowadays,

there are opportunities for consumers to

obtain products/services without having to

pay.

More and more brands are deploying a free

strategy in their marketing campaigns. With

little or no perceived differences between

products these days, the ability to induce

consumers to try a product, albeit by a free

strategy, is already a foot in the door for

marketers.

In some cases, “free” has gone from its initial

role as a promotional tool to a long term

business model. “Free” can come in very

different formats, such as barter, consumers

participating in a promotional activity or

paying for products by performing services for

the marketer.

Source: CMMS2004S~CMMS2011SU Scope of survey: 15-40 age group in 30 cities

More and More

Willing to Try

Bartering goods was the way people used to trade before the

invention of money, and now it‟s making a comeback. However,

nowadays, barter is no longer confined to material things, but

intellectual and artistic goods are also included. People exchange

not just physical objects but experiences, feelings, information and

skills. At emotional give-and-take parties, for example, everyone

who takes part gets to hear other people‟s riveting stories, but is

also expected to share his/her stories in return. The old saying is

right: “The talk of money hurts (people‟s) feelings”. This new

barter consumption, which is rich in interest and excitement, has

become a new medium of emotional exchange and entertainment.

Barter

Consumption

Sayings like “the sky doesn‟t rain pie” and

“there‟s no such thing as a free lunch”

represent a traditional way of thinking

which used to have enormous influence.

However, Chinese nowadays are more

willing to give new things, such as free

trials, a try.

% Acceptance of Free Trials

Free virtual $$ for watching ads

Noisey was a joint event organized by

Dell and Intel in 2011. This event was

targeted at Chinese young adults, and

involved a “FREE” crossover platform. It

utilized the 17bi (a virtual coin) of

InGameAd Interactive.

It embedded Noisey video footages into a

number of social games, working like the

YouTube for gamers. When the gamers

watched Noisey ads, they were rewarded

with virtual money in the form of 17bi,

which they could then use in social

games across different platforms to

redeem props, or as currency.

This is a win-win situation: advertisers

get their ads watched while gamers can

earn virtual points.

Number of fans jumped from

118 to 9901！！

VANCL Star

VANCL Star is a promotional activity launched by VANCL to enable consumers „to get

fame and economic benefit from their fashion sense‟. Individuals can upload their own

„Vancl ensemble‟ on to the internet, and other users can check them out and vote on them.

How many VANCL products are sold due to a

consumer‟s clothes matching sense will be a

criterion for whether the consumer will be

ranked as a „Star‟. The sales ranking then

puts on record how much influence each

„Star‟ has. The more influence the Star has

on VANCL sales, the greater the personal

commission that s/he is given. Getting

something back without paying anything out

is a dream investment model for consumers.

For VANCL, the influence of their „Stars‟ is

the basis on which to sell more apparels.

Comments = Money Influence = Opportunity

This is another version

of the “free” strategy:

your influence in the

virtual world determines

your probability of

success, since the more

people you bring in the

more chances you get to

draw a prize.

Promotion such as this

“groupon for nothing”

scheme organized by

dianping.com involves

utilizing consumer‟s

influence and rewarding

them for flexing that

influence.

Being able to buy with no effort at all is

one of the ways in which the web-

based “free” strategy currently

manifests itself. Consumers‟

participation in promotions becomes a

way to earn (virtual) money.

“Follow + Comment”= $

“Follow + Participate”= $

“Follow + Forward”= $

TREND 7 Lazy Consumption

As the pace of life heats up, consumers are too busy to make a proper response

to all sorts of things, and they begin to feel that there are not enough hours in the

day. So people dream of taking on a „servant‟, someone to help them filter

information, make exact plans and put forward good recommendations. In answer

to this surging demand, all sorts of intermediary and pooling services have sprung

up, like Douban Same City: dates, places and services or activities are all set out in

a table. All the consumer has to do is to pick the one he wants from the many

excellent choices on offer.

Aggregation sites like qunar.com

allow consumers to get from a single

site information which they would

otherwise have to search for in many

different places.

Specialist aggregation sites, like

“Frontiers of Science”, keep people up

to date on news and new directions in

different fields.

Aggregation Websites Activity ManagersAs the intellectual and artistic life of

the Chinese become richer, various

websites dedicated to arranging

leisure activities have sprung up and

attracted attention. Sites like Douban

Same City, Gewara and Shanghai

Culture Information Center help

consumers sort through what‟s on or

what‟s going to be on (movies, plays,

concerts etc.) in different cities and

also offer special deals on tickets.

@TaobaoForTheLazy

Has this ever happened to you? You are walking on the street or browsing online and you see

something that takes your fancy, but you have no idea what brand it is or where to buy it.

However, going off on a search to find out about it is going to be quite an undertaking, far too

troublesome for the efficiency-conscious modern consumer in you..

It is at this point that the arrival of @TaobaoForTheLazy is greeted with cheers.

@TaobaoForTheLazy, as the

name suggests, is a service

targeted at lazy people. If you

publish here a photo of the

product you are looking for, all

sorts of experts will quickly give

you the information you want,

saving you time and effort.

TREND 8

Grass Roots Decision Makers

There‟s an ancient Chinese saying which gets it right: “When everybody

adds fuel the flames rise high.” This is exactly how to succeed in the

internet age, by deploying the wisdom and strength of the general public to

the greatest possible extent. A single move or pronouncement from a

marketer can quickly get a massive response, and can end up making big

waves. The invitation to “tell me your ideal dessert” appeared on a

microblog, and despite its simplicity was answered by a vast number of

netizens. Since it is so easy and convenient to get involved like this,

consumers do not need to think too much. If, by lifting a finger, consumers

can change the world, why not do it?

Source: CMMS2009A~CMMS2011SU Scope of survey:30 cities

%Popular Participation

Is on the Rise

Grass-Roots DetectivesWhen the Guo Meimei story was exposed, the public‟s

craving for the real truth made them intensely interested.

Huge numbers of netizens tried to unearth and piece

together the facts.

Fooling the public is becoming less and less easy, as

more and more people are aware of their powers and

rights. People will get together and assert their authority.

The proportion of Chinese who have

commented online has risen from 2.8% in

2009 to 9.4% in 2011. Things they have

commented on include community affairs,

entertainment gossip and shared items from

friends. Popular participation in China is on the

rise. Instead of just following instructions from

others, people are now becoming aware of the

role they themselves can play.

Have made comments on the internet

Xiaomi mobile phone – a live OS

One of the characteristics of the Xiaomi

mobile phone is that it uses an original

designed operating system called MIUI. It is

the first Chinese designed OS that allows

zealots to participate in the improvement of

the original design. Every zealot of Xiaomi

can contribute to the betterment of the mobile

phone and is a designer of the product.

Upgrades are carried out on every Friday.

MIUI is a live operating system, allowing

consumers to continuously experience a

better version of the mobile phone. Xiaomi

was very well received and got 300,000 orders

within the first 34 hours of its launch in

October 2011.

This year, while most people around the world are waiting for the launch of

a new version of the iPhone, another mobile phone was enthusiastically

awaited for by the Chinese consumers. This is the Xiaomi mobile phone.

Buyers Creators

The VW „People‟s Car Project‟ is an interactive creative platform which invites

consumers into a dialogue. Consumers can join the process of creation. VW stimulates

their creative imagination. In return, consumers with their innovative and creative ideas

inject new inspiration into VW‟s brand creativity.

VW is completely committed to listening to what Chinese consumers want, and „The

People‟s Car Project‟ is an extremely interactive and engaging way into consumers‟

hearts. Consumers can vote on all the original design features, and those which get

the most votes will end up being used by VW in the production of the final product.

This is surely the formula for producing a winning product which is completely in line

with what consumers want.

TREND 9

Alternative Sensory Experience

Traditional sensory experience involving a single sense, however powerful it

may be, is becoming less and less able to grab consumers‟ attention.There is a

better chance of their interest being aroused if they have experiences, in more

than one of their senses, which go beyond conventional expectations.

Sometimes this means switching to another sense, such as voice-controlled

instead of touchscreen games, or food being played instead of simply eaten.

Sometimes different senses are combined – for example 4D movies exploit the

linked activation of different senses. These new-style novelty experiences act

powerfully on consumers to persuade them to try new products and brands.

2011 2012Alternative

Sensory

Experience

Sensory

Experience

Consumption

Source：CC03S~CC11SU Base: 30 cities S=Spring, SU=Summer, A=Autumn, WI=Winter

Internet Consumer Research Centre (ZDC), 2010-2011

Touch-screen mobile phones are one of the

great technical breakthroughs of the past few

years, and are becoming more and more

popular with consumers.

The sense of touch is now one of the things

people care about most in a mobile phone.

Just a couple of years ago, who would have

asked: “How does the phone feel?”

%

%

For hi-tech products like mobile

phones and cameras, high

performance is not enough. For

Chinese consumers, they are not just

communication or imaging tools, they

are also fashion accessories. For this

reason, how they look visually is

getting more and more attention, and

can even be the deciding factor when

a purchase is made.

%

%

Consider the product’s outlook when buying a camera

Consider the product’s outlook when buying a mobile

phone

Interest in touchscreen in the China

mobile phone market

The game Pah! for the iOS platform involves

using a voice-controlled spaceship to

eliminate obstacles. As the player‟s voice

goes up or down, the spaceship heads

skywards or earthwards to dodge the

asteroids heading towards it. With a short,

sharp “pah” sound you can launch a missile.

Voice-Controlled Games

Pah!

Do you remember when you were

young, there were „hands and feet‟

games, and you twisted yourself

into strange shapes to use hands

and feet together? Nowadays,

some games require „no hands, no

feet‟. Voice-controlled games have

appeared, changing all our

assumptions about how games can

be played. They have been greeted

with astonishment and great

enthusiasm.

Handsets Not Just for HandsA transparent mobile that can “change faces”: the Window Phone.

With the Window Phone, when you touch the „weather report‟, information are

delivered in multi-sensory form. This completely overturns what we usually do

with our mobiles, and so has aroused a lot of interest in the market.

TREND 10 “Com”plex Consumption

As today‟s consumers get more sophisticated and have more money in their

pockets, they no longer consume just to fit in with other people‟s taste. They

also no longer confine themselves to practical products and services. Buying

for interest is becoming the consumption focus of more and more Chinese,

and in consequence the „complexes‟ have arrived: cartoon character complex,

travel complex, IT complex. On the things they are especially interested in,

those who have a complex will spend their money without stint. What kind of

„complex‟ do you have?

Source: CNRS2006~CNRS2010 Scope of survey: 30 cities

Badge Fanatics

Bye Bye, Rationality

As the Chinese craze for virtual products

gathers momentum, some people are prepared

to spend a lot of money and time getting badges

from QQ or Weibo or jiepang.com, even though

they are of no practical use and cannot be

touched.

The Chinese have always been thrifty, so

they like to buy things that are functional.

When you buy something the first question

you get asked is: “What are you going to

use it for?” But these days, with the

development of the economy & society, we

find that Chinese are more and more ready

to act on their interests and enthusiasms.

If they like something they may be

prepared to buy it even if it has no practical

use. Whether you like something or not,

instead of its usefulness, has become the

main criterion for buying.

%

“I will buy things that I do not need and

are not practical, so long as I like it”

The FoodieThere are some people who have only one interest. They

love to taste all kinds of fine food. These are the „foodies‟,

and they have recently been on the rise. They let no

difficulty stand in their way and they overcome all

obstacles just to eat.

The Apple Fan

Eat hotpot while on IV drip

As Apple becomes more popular

in the Chinese market, a group

known as „Apple fans‟ has come

into existence. They are

passionately loyal Apple

enthusiasts who own every kind

of Apple products and would like

their lives to become all Apple.

This is one of the reasons why

last year one eighth of Apple‟s

profits came from China.

Apple hairstyle

“Apple Family Portrait” from an Apple fan

The Media “Com”plex

With the growing importance of the various media in consumers‟ lives, the media

have joined products and brands as a target of “com”plex consumption. These

consumers use all kinds of media many times a day, and they cannot stop

themselves. Phrases like „microblog complex‟, „Xiaonei complex‟, and „TV complex‟

are on everybody‟s lips these days.

TREND 11 World of Gamification

Source: CMMS2003S~CMMS2011SU Scope of survey: 30 cities

„Be serious!‟ is a phrase which has echoed across many

generations, giving voice to the respect Chinese have for

sobriety. However, playfulness is an ancient

characteristic that is written into the human genes, and it

will never be completely stamped out. „Amusing yourself

to death‟ is back on the scene, but this time consumers

are not simply after the entertainment or amusement, but

have developed an interest in some basic game

mechanics inherent in game-playing, such as fun,

competition, rewards and levels. One example is game-

based teaching known as „edutainment‟. Nowadays,

more and more game mechanics are being applied to

commercial practice, attracting consumers to participate

and rewarding them as they move to ever higher levels.

As far as the Chinese are concerned, the days of belt-

tightening poverty have faded from view, and enjoying

the present moment is the new theme. For this very

reason, game mechanics are welcomed by consumers.

It is like the line which crops up often in martial arts

fiction: “Time is something I‟m not short of; so there‟s no

reason not to have a bit of fun.”

%

Comparison of What Chinese & Americans Do Online

instant messaging

on-line music

news-reading

on-line video

search engines

on-line games

email

blogs

social networking

e-commerce

on-line banking

discussion forums

job-seeking

China

USA

Source: China‟s Digital Generations 2.0, BCG

As has been shown in

many research, Chinese

are keener on games

than other people. Many

people in China have

been deeply influenced

by these games, not

least the new generation

of young people, who

have been immersed in

them throughout their

upbringing. The game

mechanics on which

games are built play an

important role in making

the games addictive.

Games for AdultsAgainst the claim that games are the special

preserve of kids, the success of Angry Birds and

Fruit Ninja in the adult world reminds us that

perhaps adults need games even more. Adults

are under lots of pressure in their daily lives, but

they cannot let off steam the way children do.

Games have become one of the ways in which

they relax and let off steam. This provides the

basis for gamification, in which marketers employ

game mechanics to attract consumers.

“Class” Society

If somebody introduces himself by saying

“Hi, I‟m the Laird of the Oriental Pearl

Tower”, do not think he is crazy, because

that is who he really is. Or rather, that is

who he is in

the virtual worldBadges, titles, certification…… the virtual

position and status conferred by these

virtual objects encourage active

participation. The reason is that every one

wants to prove that s/he is “a person of

status!”

Laird

A Sense of CompetitionWith the rise of social network sites such as

Renren and Weibo, statistics such as the

number of „fans‟ (like Twitter „followers‟) and the

number of times a person‟s Weibo post has

been forwarded or commented on, have

become a measure of personal influence.

When the need for emulation kicks in, the

Chinese tend to pit themselves against others

in the virtual world. There is actually a market

for selling „fans‟.

Nike+ uses „community‟ concepts to appeal to consumers‟

natural competitiveness, setting up head to head

competitions in sporting activities and thus encouraging

people to do sport. In the Nike+ online community, users

can issue all kinds of challenges, daring their friends &

colleagues to trials of strength. Let‟s see who‟s the better

sportsman?!

They Can Play TogetherThere is an often heard sentence, “They can

play together,” which brings out the social

function of gaming.

Famous sports brands like Nike, Puma and Li

Ning have all taken to promoting „night

running‟, which, as the name suggests, is

going running after dark.

As people run, others begin to tag along, and

the group gradually swells in number. Through

sport you get to know other people with the

same interest, and your social needs are met.

TREND 12 Zhai

The „cocooning‟ man or woman is not a novelty. Faith Popcorn, the

famous US trend forecaster, first proposed „Cocooning‟ as a trend in

1992. In recent years, this trend has gained critical mass and is

becoming more prominent in China. Cocooners are called Zhais in

Chinese. The proliferation of the Zhai lifestyle brings with it an entire

Zhai economy, such as home delivery service, E-shopping, increased

need for communication and technology products etc. Furthermore,

Zhais come in different varieties. They are no longer just the stay-at-

home type. With the maturity of mobile technologies, many Zhais go

out and get around. However, they morph into IT Zhais. Despite

being and hanging around with people, their main focus is their mobile

device instead of people.

Source: CMMS05S~CMMS11S Scope of survey: 30 cities

From 2004 to 2010 saw a general upward trend in the proportion of

consumers whose lifestyle fitted the definition of Zhais

%

76% of respondents agreed with the statement:

The Zhai lifestyle is likely to be adopted by more and more

people in the future.

Source: The Zhai Lifestyle, MEC proprietary research, 2011

“”

81.2% of respondents agreed that:

E-shopping is replacing traditional shopping, becoming my main

means of consumption.“

”

The Rise of

the Zhai Economy

Source: Numbers of Users in the Chinese Online Market , iResearch Consulting 2010

A wall covered with take-out menus and a

Favorites folder crammed full of various e-

shopping web-sites have become an

indispensable part of life for more and more

consumers. These forms of economic activities

are part and parcel of the Zhai lifestyle. As the

Zhai community grows bigger, such services are

more in demand.

October 09, 2011

New Pleasures for the Zhai Lifestyle

Shortly before the Mid-Autumn Festival, Baidu Encyclopaedia made a change to its

entry under the word „Moon‟. The site visitor‟s IP address and server time were

used to establish which city they were in, and the web page showed a real time

image of the moon as it appeared where the user was. In this way, even people

who were lounging about indoors and had no intention of going out were able to

follow and enjoy the changes of the beautiful mid-autumn moon.

As Zhais grow in number, they will look with greater favour on brands or products

which let them enjoy indoors the beauties of the outside world without having to

physically go out.

The „IT Zhais‟

The development of mobile technology enables Zhais

to go outdoors.

Even when they actually go out, more and more people

remain in their own small world. They do not

communicate much with the outside world, or rather

they do not communicate face to face. It is in the virtual

world that they have built for themselves that they

socialize and interact with others. Two people sitting

side by side, not saying a word to each other, but

absorb in surfing on their mobiles – this has become a

common scene. These are the IT Zhais.

Implications and Recommendations

Implications & recommendations - 1

• With the continuous integration of technology and media (T3: Hybrid Economy

and T4: Tech 360), brands should have a core idea that can be expanded and

content that is liquid enough to flow from one channel to another. Conversely,

each channel can carry different pieces of information about the brand, inviting

consumers to participate in piecing together the brand content or using the bits

and pieces of information to create their own UGC (user generated content).

• With the development of T1: Me Consumption and T8: Grass Roots Decision

Makers, how to leverage the power of grass roots decision makers is the next

Mount Everest that marketers have to climb. Marketers do not just have to

invite consumers into their brand communications, but also to tap into their

creativity and innovativeness by letting them participate in the development of

products and services.


• The boundaries of „new media‟ will continue to broaden. With the development

of T1: Me Consumption and T8: Grass Roots Decision Makers, every

consumer can potentially be a new channel for a brand to communicate

through. At the same time, with T6: Free??Free!!, the “free strategy” is an

effective means to enroll consumers to communicate the brand message in

exchange for goods and services.

• In order to ride on the continuously growing trend of T12: Zhai, there are three

things that a brand can do:

• 1) Become a friend of the consumer in the digital world, and help them to lead a

healthy and exciting Zhai lifestyle;

• 2) Build a positive, forward looking brand personality and host events that entice

Zhais to leave their homes and go into the physical world to socialize with others;

• 3) Act as a bridge to assist Zhais to traverse the virtual and physical worlds

seamlessly.


• Given its huge gamer base, China will probably progress from gaming to T11: World of Gamification faster than most other countries. Gamification is a wildcard and lends fun and excitement to anything that it is associated with:

• 1) Deploying games in brand communication, or building game mechanics into the purchasing process to move consumers along the purchase funnel, are great ways for brands to engage with consumers.

• 2) Gamification can also breath new life into loyalty programs. Accumulation of loyalty points for a consumer can be made more competitive and more social by tying the consumer‟s progress to others for competition. If both the participants and their friends/competitors can see the results in real time, the process create an immediate feedback loop and can drive a sense of urgency to accumulate more loyalty points.

• Applying T6: Free??Free!! to T11: World of Gamification, games can be designed in such a way that gamers get free gifts, points or virtual coins when they get their friends to sign up, complete tasks with their friends‟ help and post their accomplishments on social media websites. This gets more people to participate, creating an endless loop of cooperative play.


• T4: Tech 360 is changing consumers‟ usage and preference for products. A brand needs to incorporate new technology into its products and services, so that the product and technology become one and the same in consumers‟ minds. When consumers think of the new technology, they think of the brand. Technology is also at the heart of enabling creativity and delivery of T9: Alternative Sensory Experience and T5: Virtual & Physical Worlds Seeping into Each Other.

• With the acceleration of pace of life, increasing pressure, and T7: Lazy Consumption, consumer demands begin to polarize. On the one end, products, services and technology that are simple and intuitive are welcomed. On the other end of the scale, packaged solutions that bundles complicated steps into a one-stop solution will also be well-received, as they cut down on the time and resources that consumers have to put in.

For more information, please contact:

Theresa Loo

National Director – Strategic Planning, Analytics & InsightMEC China

29/F, The Center

989 Changle Road

Shanghai China 200031

Direct line: +86 21 2307 7790

Switchboard: +86 21 2307 7800

[email protected]

Project Manager & Editor: Wu Jin (Mandy)

Project Consultant: Amanda Song

Trends Researcher: Liu Jie (Jane) , Stephanie Chai, Anita Wang, Cai Jing

consumption trends china 2012

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