Discover more from Baiguan - China Insights, Data, Context
Top hidden trends in China's consumer sector in 2023
Tapping into the post-pandemic consumer mindset
The post-pandemic consumption scene in China is changing. Many of our readers have an insatiable curiosity about these developments. People rely on tips, news, and conversations with friends to stay informed. However, at Baiguan, we utilize technology to systematically scan the entire public domain daily to identify emerging market trends.
Earlier this year, we published a post on the top consumer trends, which were identified from online sales data across major e-commerce platforms such as Tmall, JD, and Douyin. However, since March, we have observed a clear shift in consumer preferences. In today's post, we will provide you with an update on these changes.
Top 5 fastest-growing consumer categories in the past 3 months
We will identify the five fastest-growing product categories in the recent 3-month window, with average monthly online sales of more than RMB 10 million (~USD 1.4 million). By understanding these trending product categories, we will uncover the most important consumer trends and evolving psychology in the post-pandemic period.
No 5. Tone-up Cream (素颜霜）
Tone-up cream is a multi-functional cosmetic product that originated from South Korea. It was initially designed to soothe and recover post-surgery skin, but later became very popular and became part of the cosmetics market. Tone-up cream is usually used as a skincare step before or after makeup. The goal of tone-up cream is to provide light coverage that makes the skin look more natural, while also moisturizing and protecting the skin. It is usually not as heavy as traditional foundation products (such as foundation or BB cream) and focuses more on showcasing the skin's natural state. This type of product is widely used in Asia. Especially in South Korea. Because in South Korea, there has always been a trend of natural and translucent "dewy" skin. This is also the reason why this product was created. The rise in popularity of tone-up cream reflects an important trend: Chinese consumers are increasingly seeking a natural and "effortless" look, a trend we have observed in both fashion and makeup.
No 4. Zero-added seasonings
In September 2022, Video Blogger Xingi Fei discussed the "Double Standard Scandal" of Haitian in a series called "Technology and Hard Work" on the Chinese TikTok platform. The scandal exposed the differential treatment by Haitian, a Chinese public company that manufactures sauces and flavorings and is the largest manufacturer of soy sauce in the world. He mentioned that the ingredient list of Haitian soy sauce sold outside of China does not include additives (Japan requires the labeling of ingredients and additives, which proves that they are not added). In contrast, the ones sold in China contain more additives. This "double standard scandal" has caused the value of the Haitian company to plummet by billions in a short period.
After the scandal, seasoning merchants in China shifted their marketing focus to "zero additives." Within just one month of the product's launch, the sales of "zero additives" condiments in the entire industry multiplied several times. It's hard to say how long this trend will last. But 'zero additives' have higher prices and profits, so brands are naturally willing to make high-end products popular." The emergence of "zero additives condiments. can prompt food manufacturers to reexamine their product ingredients and production methods to provide healthier and more reliable food options. This trend may continue to develop in the food industry, especially in the health food and organic food sectors.
No 3. Colostrum
Colostrum, aka liquid gold, is the first form of milk produced by mammals, including humans, immediately after giving birth. It is a highly nutritious substance that is rich in antibodies, proteins, vitamins, and minerals, and it plays a crucial role in providing essential nutrients and immune protection to newborns. "Colostrum is rich in immune components such as secretory IgA, lactoferrin, and leukocytes, as well as developmental factors such as epidermal growth factor. Colostrum also contains relatively low concentrations of lactose, indicating that its main function is immune and nutritional rather than purely nutritional. The levels of sodium, chloride, and magnesium in colostrum are higher than in mature milk, while the levels of potassium and calcium are lower." [source]
Colostrum is so special that it's sold in supplement form for adults and has been prized for its health benefits by many cultures—primarily in India—for thousands of years. Regarding composition, colostrum actually has more in common with blood than it does with breast milk since it's chock-full of white blood cells and immune-boosting properties. Colostrum gained popularity among Chinese consumers as they perceive it as a better and more nutritious alternative to other dairy options.
No 2. Fish & Aquatic pets
Amidst a slow recovering economy, many Chinese consumers have found themselves embracing the mindset of "chillax". In the face of these financial hardships, a considerable number of people have begun recognizing the reality of the economic climate, adopting a more relaxed perspective towards it. Compared to cats and dogs, the cost of keeping fish and aquatic pets is much cheaper. In recent years, young people have faced increased work pressure. The industry has become highly competitive. Working people want to have pets but do not have a lot of time to take care of them. For example, pets like cats and dogs are relaxing and therapeutic but require a significant amount of time and care. Therefore, people have turned their attention to fish & aquatic pets.
We have observed a significant surge in online sales of fish and aquatic pet products in the recent 3 months, surpassing the pet industry average.
No 1. Collagen drinks
A collagen drink is an oral dietary supplement that is usually supplied in liquid or powder form. Its main ingredient is collagen, a protein that is one of the main components of the skin, joints, bones, hair, nails, and connective tissues. Collagen drink is widely used in the fields of beauty and health. Collagen protein drink is one of the popular types in the market. Collagen protein drinks have become popular in recent years for several reasons. Skincare and beauty benefits, healthy joints and bones, convenient intake methods, growth of the beauty industry, and positive consumer mindset. Especially for office workers. This is one of the timesaving, convenient beauty and health care methods.
What has changed?
In recent years, Chinese consumers’ attention to physical and mental health has gradually increased. The reasons include the impact of pandemics, the recognition of the importance of mental health, changes in lifestyle, emphasis on nutrition and diet, increased exercise and fitness, investments in health products and supplements, and the dissemination of health information.
Moreover, since early 2023, consumers' focus on consumption has shifted from medical devices such as oximeters to broad categories of personal care products that promote overall self-satisfaction and awareness.
Growing health awareness has led to a booming health supplements market
The growing concern for health among people has become a significant driving force behind the development of the health supplement market. In recent months, there has been a noticeable increase in people's focus on both physical and mental well-being. This shift is evident in their dietary habits and daily health practices. Healthy and nutritious products such as zero-added seasonings and Colostrum are experiencing rapid growth. Modern individuals are increasingly prioritizing their health and well-being, investing in healthy food, exercise, healthcare, and mental health to enhance their quality of life.
Consumption for pursuing self-satisfaction ("悦己消费")
The number of posts mentioning "悦己" or "self-satisfaction" has been trending up on Xiaohongshu, China's most popular lifestyle social media platform since 2023. This platform primarily focuses on beauty trends. Over the past two years, the "Chinese beauty and cosmetics market" has experienced rapid development, influenced by the star effect in livestreaming sessions on platforms like Xiaohongshu and TikTok. The popularity of the internet and e-commerce has made shopping more convenient, enabling people to satisfy their self-indulgent consumption needs by purchasing products and services anytime and anywhere. Social media and advertising consistently convey messages about the quality of life and happiness, which in turn stimulate interest in self-indulgent consumption. The images and posts on social media highlight the pursuit of a beautiful life experience, encouraging people to actively pursue these experiences.
Read our stories about Teresa Cheung, an influencer who gained incredible popularity on Xiaohongshu. She has shaped fashion trends and encouraged young consumers to pursue a high-quality and elegant lifestyle.
In the post-pandemic period, the anticipated "revenge consumption" did not materialize as China experienced a slow recovery. The debate on whether a "consumption downgrade" is occurring in China has been a prominent topic throughout 2023.
We have observed a shift in consumer behavior towards more practical purchases, particularly in utility products and daily essentials. However, consumers also demonstrate a willingness to pay a premium, especially for products related to healthcare, personal care, and those that provide mental health and emotional value, such as spending on pets and outdoor activities.
From marketing campaigns to product development, addressing health benefits and overall well-being has become a winning strategy for brands to thrive in the post-pandemic consumer market in China!
If you enjoy Baiguan, we encourage you to share it with friends, colleagues, or anyone who may find value in our content. Our most supportive friend can earn up to 1 year of free subscription ($150!) through our referral program. If you are already subscribed to the paid version of my newsletter, your subscription will be extended.