Young Chinese consumers are turning their backs on foreign brands in favour of homegrown products thanks to a rising sense of national pride, a new report has found.
Despite foreign companies commanding a premium position in the brand hierarchy for the past decade, Millennial consumers are now showing a “Chinese bias” in their purchasing decisions.
According to the report by Credit Suisse, “the young Chinese consumer is driving a consumption/lifestyle upgrade but with a domestic brand bias, amidst a degree of nationalism”.
When looking at the home appliance sector, more than 90 per cent of consumers aged between 18 and 29 said they would prefer to buy local brands in the next six to 12 months. Meanwhile, more than 85 per cent of the total number of consumers interviewed in the survey said they favoured domestic over international.
In the sportswear category, domestic brands held significantly less sway. When asked to mention Chinese sports brands “worth paying more for”, only 20 per cent of responders named local companies.
However, Credit Suisse’s report follows a number of similar studies over the last two years that have pointed towards a resurgence of Chinese brands.
A report by Nielsen last year stated that domestic companies producing consumer goods such as food and beverages or personal care products were steadily eroding market share from foreign competitors – 30.2 percent of the market in 2016 versus 33.5 in 2006.
Home appliance maker Haier, e-commerce giant Alibaba and internet powerhouse Tencent have all rapidly gained local market traction and global growth over recent years.
However, last year’s Brand Index by Prophet revealed that while Alipay and WeChat respectively held the top two brands among Chinese consumers, the rest of the top 10 was largely made up of international companies, including Android, Apple and Ikea.
Meanwhile, Prophet’s Tom Doctoroff pointed to a growing rise of Confucianism values among younger Chinese consumers at his talk at Mumbrella360 Asia last year.
Speaking at the time, he said: “What Westerners fail to remember about Confucianism is that it is the first socially mobile, meritocratic system. In order to climb that system, you needed to master convention, not bucking against tradition. Even now there are no Steve Jobs in China; it is a different kind of innovation. So there is a timeless tension between projection of status – which is big and bold – that’s meritocratic and reaching for the stars.
“But there is also a [sense of] protection in that society has not been developed to protect social and economic tension. And this is what consumers want resolved in their lives… this tension exists solely in Confucian culture.”