China's millennial sector is one of the richest and largest spending groups in the world and UK businesses need to start focusing on this export market with quality luxury items. Forget Union Jack flags and Sherlock Holmes Pub signs, China’s millennials want luxury personal items that they can wear, show off and enjoy.
Chinese millennials are different from other generations of Chinese. Aged between 9 and 35, they are part of China’s 'one-child policy' era. They grew up in homes where they were the centre of attention.
Their parents viewed education as a status symbol and they were sent to the best schools and universities. Their parents didn’t want them to have to grow up and live with the burden of education debt or a mortgage so they paid for all their education costs and needs.
Even Chinese students sent to other countries to study where the international fees were exorbitant, would have all of their tuition and living expenses paid for by their parents. Naturally, this placed a lot of pressure on students to perform well academically to meet their parents’ high expectations.
As a result, Chinese millennials enjoy a high degree of financial freedom. They are cashed up, happy to spend money and they value quality, luxury and travel. They also use spending as a form of stress relief and seek personal connections with the products they buy.
To emphasise this phenomenon, the average age of Chinese shoppers on luxury goods is about 35, which is 10 years younger than those in developed economies and represents 32% of luxury sales consumption worldwide with total revenue of US$319.6 billion. China’s 400 million millennials deliver high spending in many areas, particularly skin care, hair care, clothing, accessories, bags, cosmetics, and shoes.
Bain & Company recently reported that spending on luxury goods within China grew by 20% in 2017 due to millennial spending on items such as women’s wear, jewellery and cosmetics. In the longer term, millennials are expected to keep driving sales. Millennial shoppers pushed the Chinese market up to 142 billion yuan ($22.07 billion) in sales last year. Boston Consulting Group estimates that consumers aged 35 and younger will make up 65% of China’ consumption growth through to 2020.
Chinese shoppers and tourists already place a high value on British products. The UK is highly regarded in China for our quality, sophistication and national heritage. It makes sense for British businesses to capitalise on this market segment, identify the type of products which appeal to Chinese millennials and start targeting this sector. It is a huge area of opportunity.
Chinese millennials value quality and uniqueness and they are far more brand loyal than western shoppers. They have grown up in a digital environment so they rely heavily on online trends and reviews.
The UK’s positive reputation for quality and longevity means British businesses should be leveraging this where possible to sell to the Chinese millennial sector. We really need to see a shift in thinking in British businesses and an improved understanding of the extraordinary opportunities available through export to China’s cashed-up millennial sector.
I urge British businesses to start employing Chinese millennials in their business to help them better understand and create products and marketing messages which are designed to appeal to China’s millennial sector. A good place to start would be to offer work experience, internships and employment opportunities to the intake of approximately 147,000 Chinese students to British universities each year, not to mention the large number of young Chinese migrants and 2nd generation Chinese people who are permanent residents and citizens of the UK and can help bridge some of the language, cultural and knowledge gaps.
Chinese millennials represent a huge market for UK businesses who are in a great position to benefit from targeting this market. But we need to hurry because every other country is trying to do the same thing.
I am regularly asked to speak around the world on the topic of "Doing Business in Asia" and similar themes, so if you want to learn more on how to tap into this great opportunity, I'll be more than happy to speak to your members, organisation, boardroom or next conference and events. Feel free to contact me here