Chinese consumer demand is evolving at an unprecedented rate, with up to 70% of new products failing to survive beyond 18 months. In urban areas, store turnover rates have reached 48%, reflecting a market where speed and adaptability are critical. While this rapid cycle increases the risk of launching products with insufficient market potential, it also presents opportunities for foreign SMEs. Consumers are becoming more selective, shifting their spending towards premium products and lifestyle experiences. The challenge for SMEs is to position their brand effectively in this dynamic landscape.

Takeaways

Brands that understand the multi-dimensional Chinese consumer and are able to engage people through identity articulation will have an advantage.

The buyer's journey is becoming more complex with multiple touch points. Each touch point should satisfy the consumer's freedom to choose the most convenient and appropriate way.

SMEs need to embrace the buyer's journey and the shift from physical retail entertainment to online shopping by investing in communicating with and serving consumers online.

The multi-dimensional consumer

Today's Chinese consumers, especially the post-90s generation, seek uniqueness and social recognition. Almost half aspire to become Key Opinion Leaders (KOLs), reflecting a society where individuality thrives within shared interests. Brands that act as sherpas, guiding consumers towards self-expression and social validation, will resonate deeply.

The drive for recognition extends to older generations, who now define success as a balance between professional achievement and personal fulfilment.

Brands that can be sherpas for the two-dimensional consumer will be very powerful

The drive to be unique is at odds with the 'individualism' of Western cultures, which encourages people to define themselves independently of society. It is also at odds with the Japanese sense of fitting in - the Chinese have always wanted to be recognised as different and special.

In all cases, people crave social recognition. This idea of sub-tribal identity and shared passion is (also) something that motivates a lot of today's social dynamics. People want to associate with people who share their interests.

Brands that lift people up by articulating identity are key: Brands that can be 'sherpas' will be very powerful.

From ‘place first’ to ‘people first’

The digital revolution has given consumers unprecedented control over their choices. They can fulfil their needs across multiple channels, choosing the most convenient and relevant way. This shift from place-first to people-first retailing presents both a challenge and an opportunity for brands. To succeed, SMEs must create seamless, personalised experiences that cater to this new reality.

Transformation of small businesses propositions

The decline of commoditised products has opened doors for SMEs. Big brands are losing market share as consumers turn to creative, personalised offerings. Small retail channels now account for almost 60% of sales, signalling a shift towards niche markets. But challenges remain. While online B2B platforms have penetrated traditional channels, their service quality still lags behind the offline experience. This gap is more pronounced in the conservative western regions than in the more rapidly developing east.

At the same time, the line between online and offline shopping is blurring. More than 75% of online shoppers visit physical stores before making a purchase, and retail entertainment - shopping as a form of family entertainment - is gaining traction. Two thirds of Chinese consumers see shopping as a way to bond with loved ones, underlining the enduring appeal of the in-store experience.

Seizing the opportunity in China’s dynamic market

China's consumer landscape is a mix of rapid change and immense opportunity. For SMEs, success lies in understanding the multi-dimensional consumer, embracing the shift from place-first to people-first retail, and leveraging digital transformation to create personalised, engaging experiences. By acting as sherpas for self-expression and social recognition, brands can build lasting connections with Chinese consumers.

The future belongs to those who adapt quickly, innovate boldly and prioritise the evolving needs of their audiences. In a market where 70% of new products fade within 18 months, agility and consumer centricity are not just strategies - they are necessities.