Winning China’s Generation Z

Winning China’s Generation Z: Building Brand Relevance Through Technology That Matters

Benoit Garbe

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When it comes to reaching China’s Generation Z–a fast-moving, demanding and incredibly influential group of 250 million–it’s easy for business leaders and marketers to rush to talk about technology. After all, we’ve heard so much about how these young digital natives have been liberated by tech, so it makes sense to think that the launch of innovations like augmented reality, superbots and facial recognition will make a difference to any business’ top and bottom lines.

But we think that’s missing the point. While it’s true that these young people respond to the creative use of digital as no generation ever before, our observations indicate that the fundamentals of marketing have not changed: This group, which many marketers have begun referring to as Gen Z, gravitates toward brands that are relevant to their lives.

Why Does Brand Relevance Resonate with China’s Gen Z?

These brands use the power of innovative technologies to solve deep consumer needs and address key tensions in their lives. It’s not the technology that wins them over, but the purpose it serves.

Most members of Gen Z, which refers to young adults born after 1995, are in their first job, and very much in their brand-formative years. Born into the Internet era, they’ve been exposed to the world in a way that’s made them open to new ideas. Not only are they financially capable, they are also culturally hungry. These consumers are eager to explore, travel and learn. They are cosmopolitan and embrace Chinese pride. They have powerful individual dreams–with entrepreneurship being No. 1–and believe in communal responsibility. Finally, they expect material progress, but increasingly place equal value on more harmonious growth—sustainable and spiritual.

With these unique traits of the Post ‘95 generation in mind, we can start mapping out four main insights that businesses have tapped to build and deploy meaningful technologies and more relevant brand experiences.

Four Key Areas to Build Relevance with China’s Gen Z

1. “I want to live well, with health, happiness and harmony”

They may love to shop, but this generation is genuinely less materialistic than those that have come before, eager to balance emotional and physical wellbeing. According to Mintel, 67 percent of them are willing to pay for services that provide relaxation and stress relief. As a result, wellness is a big business opportunity. In apparel, consumers have spent 27 percent more on running gear and 60 percent more on running shoes than they did in the previous year. There’s an almost endless stream of technologies tapping this insight, from wearables and GPS devices that track workouts to QR codes that identify food ingredients and calories.

Midea, the home appliance company, is infusing new IoT-based technologies and AI in its kitchen appliances, which will help consumers eat and cook healthier meals.

BOE, one of the fastest-growing Chinese companies and a leader in panel-display technology, has launched iGallery to meet the demand of the new generation. The service brings a sense of harmony, beauty and well-being at home, providing digital downloads of artwork from world-class museums, on picture-perfect quality screens.

2. “I live in the now. I want everything in an instant, and everything interactive”

Gen Z consumers want to enjoy the now. Their purpose in life is different than their parents, and they really want to make the present moment more interesting and happy.

They expect instant gratification from all the brands in their lives. They buy more impulsively and are more willing to pay a premium for faster delivery than others, with 34 percent of the Post-95 generation saying they want same-day delivery, according to a recent Accenture survey, and 27 percent saying they expect delivery within half a day.

They rely on technology to help them maximize their time, including conversational interfaces like Siri and Samsung’s newly launched Bixby. Similar to Amazon’s success with Alexa in the U.S., we can expect companies to roll out bots that will help these young consumers make the most of the here and now, saving time and experiencing instant gratification. The opportunity to move to conversational interfaces or chatbots is huge for firms like Dianping for food delivery, CTrip for travel, Didi for transportation and NetEase Cloud Music for entertainment.

Ikea (in our Top 50 China Brand Relevance Index) is exploring ways to adapt its store experience and model to remain relevant to the new generation. Ikea is testing new store concepts, smaller in size, closer to city centers, with fewer design concepts show-rooms.  Here our young-digital consumers can experience different lifestyles, snap photos and share in an instant.  Through QR scan, they can purchase directly on their mobile and have the product delivered and assembled.

3. “I live in a world of empowered women”

Gen Z women are steadily challenging gender stereotypes; at home, work, and in sports. They are even more open to experimentation and trying new things. And technology is turbo-charging this blossoming female empowerment.

Adidas, another top brand in our China Brand Relevance IndexTM, is capturing these young women with product lines, technology, digital apps and even physical stores that are inspired by and designed just for women. Its social-media campaign, #mygirls, spotlights the fun young women have bonding with each other in team workouts. Lastly, Meet You (美柚), an app that started as a menstrual cycle tracker, has evolved into a social network with tips about all kinds of women’s issues, from fashion to finance to pregnancy.

4. “I live purposefully. I want deeper meaning and engagement”

Gen Z expects the brands to act as a force for good, improving not only their lives but also helping communities around them.

Tencent QQ is tackling the sensitive “Gone Missing” issue, using facial recognition and AI-enabled age simulation to help desperate families locate lost children. The technology, which has reached an accuracy level of 99.8 percent, has taken on nearly 300 cases, with 176 people successfully recovered, and won widespread acclaim in the process.

These same Gen Z consumers who care about purpose, are also young employees, who care about making a difference through their work. By setting a higher purpose, corporate leaders can inspire their entire new-generation workforce, to create more meaningful technology and more innovative business models. The win-win?  Stimulated employees and higher productivity.

Final Thoughts

Harnessing innovation is important to Gen Z, but only when it makes brands more relevant to their daily lives. Brands that understand the aspirations and values of this rising Post-95 consumer power–and then use technology as new means to add value to their lives–will win the hearts and wallets of this generation. Brands that truly connect, build sustainable value and drive relentless relevance in consumers’ lives are the ones that:

• Anchor their technology – AI, VR, AR – on deep consumer insights, using these insights to create hyper-personal and highly relevant experiences across an expanding array of touchpoints.

• Articulate a deeper purpose and leverage technology as a means to deliver on this purpose to benefit society.

• Develop technology designed to provide immediate (and frictionless) solutions.

• Deploy technology which will improve people’s sense of well-being, making them healthier and eliminating stress.

Authored by Benoit Garbe, Senior Partner of Prophet who leads Prophet's China business