Chinese shoppers and Christmas decorations are reflected in mirrors inside a shopping mall in Beijing. (AP Photo/Andy Wong)
We know that China is the largest and fastest-growing consumer market in the world. What is less well understood are the forces that shape consumerism in the world’s most populous country. Is it merely self-indulgence and materialism? In what ways are consumers in China different from those in the West?
Much of the research has focused on, for example, how Chinese consumers relate to foreign versus domestic brands, or the macro role of the Chinese economy as a driver. But in my view there are larger social and cultural factors at play that drive consumer spending:
1. Consumerism as freedom. To have a choice means to have consumer choice. You are what you consume. Consumption is an expression of self. It allows you to explore the world through its products, to experiment with lifestyle choices, and to do so safely and anonymously. You might never get to France, but you can try French wine. California might be intimidating, but you can go to Shanghai Disneyland. Remember, China is only one generation out of poverty. Indeed, the enthusiasm for choice is reflected in the enthusiasm Chinese consumers have for online shopping—the country’s giant shopping websites, Tmall.com, Taobao and JD.com, offer more than a billion listings for products from mom-and-pop Chinese retailers to the largest multinational consumer electronics brands.
2. Consumerism is a statement of success. American economist Thorstein Veblen popularized the concept of “conspicuous consumption.” When consumption is no longer driven solely by need, it becomes a way of making a statement that you have disposable income and you can – at least in certain respects – enjoy life on your terms. Simple pleasures—a pair of Nikes, a smartphone, chic apparel–become statements of personal identity. Why is this pattern strongest among younger consumers? They are the ones sending and receiving “market signals.” The biggest single’s bar in the world is the sidewalks of Shanghai. If you are going for a stroll, might as well wear your finest.
3. The triumph of me-ism. Me-ism is not the same as selfishness, it is self-directed activity. The one-child policy means most Chinese do not have siblings, or aunts, uncles, or cousins. It must be ok to buy for yourself. No one is buying for you. Nowhere is this factor more evident than in the evolution of China’s Singles’ Day holiday, a kind of anti-Valentine’s day that falls on Nov. 11, into an explosion of consumerism. This year, e-commerce giant Alibaba generated nearly $17.8 billion in online spending during the annual Singles’ Day sale.
4. Collective experience. We like participating in group events. FOMO, the Fear of Missing Out, transcends cultures. But I suspect this trend is stronger in China than in the West because Confucian culture does not celebrate outliers as does the West. Social media reinforces this collective pattern so that shopping and dining are shared experiences. Opinions are crowd-sourced. And the merchants reinforce this pattern by supporting holiday sales, group buying, and other promotions. Consumers organize themselves for the expedition, and the brands organize as well. Sociologist Erich Fromm noted that when people have the ability to be whatever they want, they want to be like everyone else.
Successful brands in China are able to tackle most or all of the above considerations. The consumer must not only be delighted with your product. The journey of the consumer must also respect these deep socio-cultural impulses.