Functionality alone not enough to entice youthful consumers

As China grows to become the world's top consumption market, younger customers are looking for qualities beyond functionality when they make their purchasing decisions, according to a recent report.

Emotional resonance and social connections like loyalty and solidarity are key to informing people's brand impressions, with these trends on continuous upward trajectories, said a joint survey by consultancy Kantar and cosmetics giant L'Oreal Group.

Among the nine categories studied, emotional needs are most important by customers when they buy cosmetics and luxury goods, while food and beverages as well as home care products are perceived by consumers to carry more social responsibility than other categories.

"Good consumption is the ultimate pathway to foster a beautiful life, inclusive economy and healthy society," said Lan Zhenzhen, vice-president of L'Oreal North Asia Zone and China. She pointed to people's surging desire for healthy products, scenario-based shopping and the involvement of other companies in joint production.

"Good consumption represents the mega trend in this new consumption era," said Doreen Wang, CEO of Kantar China. "It is essential that brands allow customers to fulfill themselves when they use your products."

Luxury brands are dominated by international labels like Chanel and Dior, while popular lifestyle platforms are mainly domains of local players such as Alipay and WeChat.

Fabrice Megarbane, president of L'Oreal North Asia Zone and CEO of L'Oreal China, said the COVID-19 pandemic has allowed brands to realize that consumers expect more services beyond just products, and this has propelled the company to bring new services and new beauty tech applications in the Chinese market.

For instance, in the L'Oreal Paris inaugural global flagship store to be unveiled in downtown Shanghai, consumers seek to discover "what is inside the products, what technologies are being used, and to try makeups and understand the brand", Megarbane said.

Another case in point is smartphone maker Xiaomi, which has forged a loyal following through which it invites avid users to get-together meals ahead of Chinese Lunar New Year and seeks their advice on product feedback and improvement, said Chen Gaoming, general manager of the brand advertising division at Xiaomi's internet business department.

"Especially for the younger generation of consumers, they are anticipating 'experience' rather than the products per se," said Cally Sezto, urban revitalization force director of TX Huaihai Youth Power Cultural Center. TX Huaihai is an upscale mall in downtown Shanghai with multiple playful elements in installation and art design to entice trend-conscious young shoppers.

"As customers grow in sophistication, the decisive factors for purchase have shifted from checking prices to how brands manage to achieve certain technologies and functions," said Lydia Lee, president of public relations firm Weber Shandwick China.

Lee cited the example of China removing compulsory animal tests for cosmetics, which is a substantial boon to brands that have already adopted substitute materials to conduct the tests.

"Instead of boycotting brands that act irresponsibly, the younger generation of shoppers tends to 'buycott' brands who deliver positive social values," Lee said.

"As a result, offline commerce, after years of a slowing growth rate, will rebound in prominence as they allow people to socialize and connect emotionally," she said.