Foreign vs. Homegrown? Which Brands Are Winning Over Chinese Consumers in 2023?
Online sales data reveal's Chinese consumers' top picks in booming segments—Home Appliances, Sports&Outdoors, Diapers and Cosmetics
With more middle-class families and young adults becoming the new generation of consumers, their evolving preferences and tastes will continue to shape consumption in China. This article identifies specific markets with significant demand growth over the past three years and examines how foreign brands have fared. By analyzing success and failure stories of foreign brands in these markets, we provide insights on how other foreign brands can tap into these untapped goldmines and thrive in an increasingly competitive market.
The Booming Market That Foreign Brands OVERLOOKED—Home Appliances
Home appliances have become a must-have for young Chinese adults seeking a comfortable and convenient modern lifestyle. For example, Robot Mops, which only sold 1.8 billion RMB on Tmall and JD (China's two largest online shopping platforms) just three years ago, have grown by over 50x and now represent nearly a 100 billion RMB market through online channels
The younger generation's evolving lifestyle has created a growing market for home appliances, especially among young adults living fast-paced lives in metropolitan areas. They demand smart-home devices to make household tasks easier. In 2019, the top-selling home appliances were mostly foreign brands like Bissell and Dyson. However, local brands have taken over the market, especially in 2022 due to Covid restrictions. Why have foreign brands lost their position in the market?
Value for money may be the first factor that comes to mind, but it is certainly not the only one. When we compare the average selling price on JD and Tmall, we find that local brands are just as competitive as foreign brands. For instance, in the robot mop category, all of the best-selling brands, except for Bissell, are local. Many of these local brands sell at similar price points to Bissell
After analyzing social media and product reviews, we found that consumers mainly consider a product's cleaning ability, value for money, and suitability for pets and children when making purchasing decisions. The "Foreign vs Local" debate is not a major concern when it comes to purchasing home appliances. Modern Chinese families have busy lifestyles, with both parents working, and singles who migrate to metropolitan cities for career opportunities usually live in compact apartments. Therefore, consumers prefer products that can quickly clean every corner of their apartments and have features such as “self-cleaning”, which is well-received
Furthermore, household chores are no longer seen as mundane tasks, but as an opportunity to live in smart homes that enhance daily routines. According to discussions on Xiaohongshu, a popular social media platform among Chinese middle-class, many young Chinese consumers aspire to this "仪式感" or "ceremonious way of living". Purchasing home appliances is not only a way to avoid chores, but also a means of making their ordinary lives more interesting, exciting, or meaningful.
Younger generation’s preference for smart home devices is in stark contrast to their parents’ generation. It's interesting to note that many of the top-liked posts on Xiaohongshu, are about how young adults have had to persuade their parents, many of whom have never used dishwashers in their entire lives, that purchasing smart home appliances is not a waste of money and how it can actually improve their quality of life.
Therefore, the surge in home appliance consumption in China is not temporary; rather it is a structural change brought by the preferences and demand of the newer generation. With local brand’s ability to quickly develop and market new products to fit the evolving demands, we continue to see opportunities in home appliances categories, especially creative products developed by local brands.