While in many areas foreign brands are still leading the market in China, it is not as it used to be.
Chinese consumers are gradually liking more and more local products. The competition in China in 2021 will be stronger on foreign brands. The reasons are diverse, and not every expert agrees on them.
Younger generations respect the Made in China
While the older generations are still attached to the quality of products made abroad, for example in Europe, America or Japan, younger consumers have ideas of their own.
Some consider this as a consequence of China’s growing influence worldwide, which is easier to impact younger people. Others think it is due to a growing patriotism that brings them to support the Made in China. We generally agree that both of these are factors. Still, we believe the biggest change comes from the actual effort being done by Chinese companies to outcompete foreign brands. Chinese producers are gradually starting to market their own brands – using marketing techniques that may be unique to China, too – livestreaming is a great example of that.
What is the competition in China in 2021 for the luxury market?
Many luxury consumers still believe that products coming from abroad are more expensive due to a higher quality. While this market seems unattackable by Chinese competitors, we believe things are just changing at a much slower pace. Furthermore, the luxury market is kind of a special case. Quality and price do not always go together.
Many shoppers worldwide would get these products simply because they can. For this reason, the luxury “bubble” will not change that quickly in China. There are some points worth to notice.
For example, Western companies rarely tried to engage in certain niches, which are dominated by local or Asian brands. An example are products related to traditional Asian jewelry. This balance of interests ensured a certain stability until now. As Chinese companies grow stronger, though, things may change. An example is the growth of local jewelry producers as Zbird.
Chinese producers are slowly being more confident, which means original Chinese products are getting more and more common. While abroad this is not easy to notice, the competition in China in 2021 is getting very different. It is important for foreign brands to care more about how to seize the Chinese market before the local competitors do. On the other side, for Chinese brands it is fundamental to press on their advantage while they still can.
In the end, the guaranteed winners of this struggle will be the Chinese consumers.