Consumption trend in 2024： Emotional value guides young consumption.

Image source @ vision china

Text | Value Planet, Author | Tang Fei, Editor | Liu Jingfeng

After the end of the Spring Festival holiday, the consumer market has reached a new peak after enjoying the 8-day holiday.

According to the data of the National Bureau of Statistics, China’s GDP will increase by 5.2% in 2023, reaching the expected target range. At the same time, prices are generally stable, and the annual CPI rose by 0.2%.

Many economic performances related to people’s livelihood are also very eye-catching, such as the "concert economy" that ran through the whole year last year, the tourism economy driven by the explosion of "Erbin" at the end of the year, and the increase in automobile sales brought about by the upsurge of new energy vehicles.

Judging from the end of January, China’s economic recovery is improving, residents’ income is growing steadily, domestic total demand is also expanding, and the price recovery of goods and services is based and conditional. Around the Spring Festival, the demand for food consumption is also increasing, and the consumption of services such as eating out, visiting relatives and friends, and traveling is more active, which will boost the seasonal rebound of CPI.

As the first small holiday in 2024, many consumers have walked into cinemas and shopping malls, and some consumers have chosen to embark on a journey to seek a completely different experience. What are the new preferences of consumers in 2024, and what new consumption trends can be found from it?

In 2023, young people will pay more attention to cost performance and pursue quality rather than brand.

The institutional survey found that consumers become more rational and calm, and most consumers will think more carefully before shopping, search and compare through multiple platforms, read comments and ratings in detail, and fully conduct surveys and comparisons to pursue certainty of consumption and seek a sense of security in life.

Under the consumption trend of prudence and shrewdness, products with "extreme parity" and "high quality parity" will always be favored by consumers.

"High-quality replacement" products will also usher in opportunities, and can be used as a basis to complete the continuous improvement of the brand.

The trend of retail business returning to the essence of "good quality and low price" is irreversible, and price is the last word and the key to determine the flow of consumption.

In 2024, consumers in China will become more rational, especially the rationalization of middle-class consumers will have a decisive impact on the consumption of the whole society, especially urban consumption.

Hot events in 2023 are rich and varied, such as dopamine wearing, Maillard wearing, electronic wooden fish, City walk, hot concerts, crazy literature in the workplace and so on. Although these events have different forms of expression, they are all centered around the core theme of "emotion".

The 2023 Youth Consumption Survey shows that nearly half of young people are willing to spend for emotional value, and people have changed from simple "purchase-use" to active participation and immersion.

The survey shows that 64% of consumers pay more attention to spiritual consumption, and young consumers pay more attention to spiritual consumption. From the three dimensions of emotional concentration, cultural nourishment and self-enrichment, consumers begin to create a spiritual world for themselves. For example, if a product wants to bring pleasure to consumers, it is very important to have emotional incentives, new experiences, face value and culture in addition to the easy use of product functions.

Mintel even pointed out in the report that one of the five major trends that will affect the global consumer market from 2023 to the next five years is "relaxing life". This kind of "relaxation" is reflected in consumers’ desire to get rid of burnout, devote themselves to what is really important to them and establish a quality life experience. In other words, I am willing to pay for my "emotions".

It can be predicted that in 2024, consumers should not only be "accommodating for those who please themselves", but also "accommodating for those who please their hearts", and more forms of emotional consumption will emerge.

In 2024, luxury brands set off a new round of "price increase tide".

On January 1st, Hermes completed the price increase of the whole product line, among which Mini Kelly generation rose by 10,000 yuan to 56,500 yuan, an increase of 21.5%, and Birkin30 handbag rose from 92,750 yuan to 105,000 yuan. Rolex, a Swiss watch brand, also made a global unified price adjustment after New Year’s Day. The average increase of popular pens was 2%-5%, and the increase of gold watches was between 6% and 8%. Tudor Watch, another brand of Rolex, also increased its price in the same period, with an average increase of about 3%.

China consumers have a decisive influence in the world luxury consumption map, which has long been the consensus of major luxury brands.

In 2024, China and the Asia-Pacific market will remain the heavy areas for luxury goods sales, but the competition for this cake will also become fierce, and the market differentiation will intensify. The differentiation of luxury consumption also lies in the fact that more and more luxury "positioning" brands are beginning to face operational risks brought by market fundamentals.

On the other hand, some brands defined by consumers as "luxury" have gradually become "Ole-oriented" in their products and pricing, and discount promotion is simply "commonplace", and cost performance has become the key to their market share. According to the 2023 Fashion List released by fashion search platform Lyst, the "hottest handbag of the year" was won by Uniqlo’s "jiaozi bag", and the price in 99 yuan made it the cheapest product in the history of Lyst list.

With the China high-speed wire market entering the fourth consumption era, "things can be expensive, but not expensive" has become the guiding principle for consumers to shop.

"Big brand inflation" and "price reduction and quantity guarantee" will coexist for a long time, and the polarization of this consumer product will further reshape the market structure.

With the popularity of live broadcast, more and more consumer actions have shifted from comprehensive "platform e-commerce" to "live broadcast e-commerce".

On the other hand, live broadcast with goods began to subvert the traditional channel of commodity circulation, and anchor with goods gradually changed the basis for consumers to select goods from "brand trust" to "anchor trust", forming a brand-new commodity flow model.

The commodity flow of traditional commodities starts from factories, then to brands, then to stores, and finally to consumers. Consumers’ preferences for commodities are more or less due to their recognition and trust in brands. The rise of e-commerce has made stores move from offline entities to online virtual, but the essence is still to sell goods from brands to consumers through online or offline stores.

The change of this channel makes the value of the foundry that used to hide behind the brand begin to advance in the whole consumption chain. Through the promotion of the anchor, the products of the factory can directly gain the favor of consumers. Whether it is a registered brand or whether the brand is famous is no longer important. Based on this channel, the products of the foundry can also become a hot "explosion" in the market under the blessing of the anchor reputation, and because of reducing the intermediate links of brand intervention, the supply chain from the factory to the consumers is shorter and the market price is more competitive.

Therefore, live broadcast with goods gradually reshapes the supply chain and commercial circulation road, which in turn leads to far-reaching changes in the consumer industry.

As the intersection of urban and rural areas, county economy plays an important role in economic development.

With the recovery of consumption scenes and the improvement of consumption conditions, the consumption potential of county residents in China has been released, and the consumption market of county life services is generally stable and rising.

2023 is the first year of the Three-year Action Plan for County Commerce (2023-2025). Nine ministries and commissions, including the Ministry of Commerce, proposed that by 2025, about 500 county-level commercial "leading counties" should be built nationwide. By constantly improving the infrastructure of county and township consumer markets, we can better meet the rural industrial revitalization and the production and living needs of rural residents.

The "Report on Consumption of County Life Services in 2023" issued by Meituan Research Institute holds that when the per capita GDP of the county develops to 60,000 yuan, it is suggested to give priority to meeting the consumption needs of consumers in beauty industry, leisure and entertainment, sports and fitness, ticket service and travel. When the per capita GDP of the county reaches 140,000 yuan, it is suggested to further develop sports and fitness, beauty industry, residents’ service and tourism.

Nowadays, drinking a cup of coffee in a chain coffee shop in the county town and then watching a big movie just released in the cinema have become the daily life of local people. The enterprises of major racetracks all take "sinking" as one of their strategies, which also shows the great potential of county economy from the side.

The county is carrying more and more rich consumption scenes and releasing greater consumption vitality.

Harbin giant snowman. Source: Weibo @ CCTV News

Since 2023, one of the most important keywords is "tourism", and going out to have a look has become a form for more consumers to relax.

However, unlike the traditional pursuit of magnificent nature and places of interest, today’s consumers prefer to explore the local "fireworks" and slow down to experience the humanistic customs of the city. At the same time, they are more willing to pay for the elements that can create a unique life experience, the city features rich in cultural heritage, and the current texture that reflects the essence of life.

In addition to being keen on cultural tourism, most consumers also like to avoid crowded tourist attractions, choose the tranquility and comfort of a city with few people, and feel the unknowns and surprises in life. At the same time, consumers are increasingly favoring the immersive in-depth experience tour with fireworks and feeling the "new pyrotechnicism" of the city.

After all, "the fireworks in the world are the most soothing to ordinary people’s hearts", which soothes our thoughts, makes us forget the troubles in life and makes us feel the warmth in the world.

In the first half of last year, netizens all over the country "went to Zi for a barbecue", and in the second half of the year, they directly arranged "feel at home". Zibo barbecue and Harbin ice and snow are not popular tourism projects in the traditional sense. However, under the trend of "fireworks narration", cities can form exclusive attraction with fireworks, make urban cultural tours content and themed, empower cultural tours with IP value, and create a brand-new experience.

Building city IP has also become an important means to compete for tourism market share. Last year, Dali, where "Going to a Windy Place" caught fire, Taipan Village, Taijiang County, and Shijiazhuang, where "Village BA" caught fire, etc., all seized network traffic and passenger flow, which directly boosted the prosperity of the local tourism market.

The Forecast and Prospect of China’s Economy in 2024 published by the Center for Predictive Science of China Academy of Sciences in January predicts that the nominal growth rate of China’s final consumption will be 4.2%-5.1% in 2024, which will continue to be the main driving force for economic growth.

The agency also predicts that China’s PPI will decline moderately and CPI will rise moderately in 2024. Under the benchmark scenario, CPI rose by about 0.7% for the whole year; The PPI is -0.6% for the whole year.

It is noteworthy that the post-80s, 90s and 00s, who are more inclined to post-material values, have occupied more than 55% of the population in China.

The main force of their consumption is no longer just to meet practical needs. For them, the "emotional value", "emotional link" and "self-identity" of goods are more important. Functionality, brand, price, personalization and additional emotional value are indispensable. And this change in consumption values will be the dividing line between whether commercial enterprises can create profits in the future.

In addition to young people, "silver hair consumption" has also undergone new changes. A few days ago, China’s first programmatic document supporting the development of the silver-haired economy, Opinions on Developing the Silver-haired Economy and Improving the Welfare of the Elderly, was issued, and 2024 will be the first year of the development of the silver-haired economy.

The consumption trend in China is close to the "fourth consumption era". In the new year, only by "following the trend" can consumer brands successfully break through.

References:

2024 China Consumption Trend Report, Zhimeng Consulting.

Ten Trends of Retail Consumption in China in 2024, Jones Lang LaSalle.