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Post-90s consumers are increasingly trusting domestic brands, and local brands are now reaching a new level of growth.
Recently, Kearney Consulting released a report stating that Chinese youth are more inclined to trust and favor domestic brands compared to overseas brands. Here, “youth” specifically refers to China’s Millennial generation—those born from the late 1980s to the early 1990s—as well as the Internet Generation, or those born after 1998.
This global consulting firm conducted surveys among consumers of different age groups in China, Japan, India, the United States, the United Kingdom, France, and Germany, and identified several trends that will drive the market in the future. The report shows that 71% of Chinese internet users are gradually increasing their trust in domestic major brands; however, 57% of Chinese netizens still place greater trust in overseas brands.
“Chinese consumers, especially the younger generation, are increasingly embracing leading domestic brands, which signals the rise of China’s indigenous brands,” said He Xiaoqing, Head of Consumer & Retail at Kearney China and a Partner. Compared to five years ago, it is now far more difficult for international brands to win and retain consumer trust by simply offering high‑quality products and services. Over the next 10 to 20 years, Chinese youth born in the digital age will become the largest consumer group.
Compared with the frenzied rush to snap up popular, trending brands, roughly 60% of young consumers are more inclined to purchase brands that contribute to social公益 initiatives—such as supporting environmental protection—and they also place greater value on brands with distinctive brand identities. This trend is particularly evident in the food industry. Surveys show that if a company’s products are environmentally friendly or if the company demonstrates a strong sense of social responsibility, 93% of Millennials and digital natives are willing to pay an additional 5% for those products. Beyond that, Chinese young consumers are increasingly focused on a brand’s historical heritage and cultural depth.
The report shows that the gradual erosion of customer trust in leading international brands is primarily occurring in the United Kingdom, France, the United States, and Germany. In contrast, in China and India, these brands can still retain consumers by playing the “cool” card and the “quality” card. However, over the next few decades, the situation in China will undergo some changes, as the younger generation exhibits lower levels of trust attachment than older generations, is more fickle, and demonstrates a lower degree of brand loyalty.
In today’s highly interconnected era, dominated by social networks, everyone’s voice can be amplified and used to influence the entire market. Any company faces the significant risk of losing its brand value in a short period of time—sometimes even just because of a single piece of public opinion.
“In the past, consumers were defined by their entire wealth, and companies could largely meet consumer needs through static business models and ‘one-size-fits-all’ marketing strategies,” He Xiaocheng said. However, times have changed—today, new business models demand highly differentiated strategies that rely heavily on individual KOLs and those who can instantly interpret consumer signals and turn them into action.
In this context, one of the most important steps is identifying the right KOLs. The report introduces the concept of “macro KOLs,” such as sports or pop music stars whose social media accounts boast massive followings. Meanwhile, KOLs operating in more niche fields are referred to as “micro KOLs,” including bloggers with a keen eye for fashion or gourmet cuisine. Although their follower base may not rival that of celebrities, their influence can actually be even greater—because they engage with their fans far more frequently and actively, making the trust‑building process far more efficient.
In 2017, China’s domestic brands all reached new heights. Jiangnan Buyi, through internal group incubation of niche brands, is building on its already solid fan base to craft a more comprehensive brand image. In fiscal year 2017, its net profit reached 332 million yuan, an increase of nearly 40%, while brands like Septwolves and GELISI have been expanding their brand portfolios by acquiring overseas labels.
The sweeping wave of consumption upgrading is prompting brands to engage in self‑reflection and innovation. For consumers right on their doorstep, local brands have the advantage of being closer to and better understanding them, giving them a stronger edge in competing against overseas brands vying for market share.
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