Consumption Trends China 2012

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This is the second consumption trends forecast published by MEC China.

China is changing at a dizzying pace. The ability to grasp the implications of new and upward growing trends will give marketers an edge in tackling the market. The goal of Consumption Trends China 2012 is to be a springboard to inspire marketers, and assist them to come up with new business concepts, new products/services and new experiences for consumers.

12 Consumption Trends are: Me Consumption; Eco-Friendly; Hybrid Economy; Tech 360; Virtual & Physical Worlds Seeping into Each Other; Free??Free!!; Lazy Consumption; Grass Roots Decision Makers; Alternative Sensory Experience; “Com”plex Consumption; World of Gamification; Zhai

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Consumption Trends China 2012

  1. Consumption Trends China 2012 Jin Wu & Theresa Loo
  2. Consumption Trends China 2012
  3. Introduction• China is changing at a dizzying pace. For some marketers, these changes will unlock significant competitive advantages. For others, dealing with their impact will be a major challenge. As change accelerates across the country, the odds of missing a beat rise significantly. It‟s important therefore to have your finger on the pulse – via the consumers.• This is the second consumption trends forecast published by MEC China. Some of the trends discussed in last year‟s report have become very prominent this year. Others, such as Cluster-Oriented Consumption and Sensory Experience Consumption, have evolved into other trends in this new report.• The ability to grasp the implications of new and upward growing trends will give marketers an edge in tackling the market. The goal of Consumption Trends China 2012 is to be a springboard to inspire marketers, and assist them to come up with new business concepts, new products/services and new experiences for consumers.
  4. MethodologyImprovements have been made to the methodology in this round of trends forecast.Similar to last year, we gathered input from over 50 trend scouts from different parts ofChina. What has been improved was that we took the most frequently mentioned trendsand asked 565 consumers from 7 cities to rank them in an online survey. We then data-mined a number of syndicated tracking studies on Chinese consumption and media habitsto find quantitative evidence to validate the top 12 trends. 50+ trend scouts 565 consumers from from all over China Picked out the most 7 cities ranked the provided information mentioned trends trends in an online on trends survey Data-mined a Conduced desk number of syndicated Write up of report research for the top tracking studies for 12 ranking trends validation
  5. Ranking of 2012 Consumption Trends Ranking Trend #1 Me Consumption #2 Eco-Friendly #3 Hybrid Economy #4 Tech 360 #5 Virtual & Physical Worlds Seeping into Each Other #6 Free??Free!! #7 Lazy Consumption #8 Grass Roots Decision Makers #9 Alternative Sensory Experience #10 “Com”plex Consumption #11 World of Gamification #12 ZhaiSource: MEC Trends Research 2011, 7 cities, N = 565
  6. TREND 1 Me Consumption Cluster-Oriented Me 2011 Consumption 2012 Consumption The Chinese used to see „individualism‟ as a word with bad connotations, applicable to people who only cared about themselves but not others. However, the Chinese of today have come to see individualism as something to be pursued and developed. They no longer live by the principle of “the bird that shows its head gets shot.” Instead their unspoken slogan is “I have my own perspective”. They are more eager to share themselves with other people and put themselves in the limelight. The rise of personal media, including blogs, microblogs, and personal pages, are good examples of this trend. An ordinary individual can now have his or her own broadcasting platform. Each person is a source of information, becoming the hub of his or her sphere of influence.
  7. Personal Media Enthusiasm for platforms like blogs and microblogs is greater in China than in most other countries. The Chinese, generally considered reserved and rather private, ‟careful in word and cautious in deed‟, have taken to the age of self- expression with alacrity. This is because the internet allows one to express oneself under a pseudonym. This sense of anonymity, and thus safety from repercussion, lets out a long pent up desire for self-expression. Blogging/Blog Browsing Rate of Usage of Sina Weibo % %Source: CC08S~CC11SUScope of survey: web users aged 15-40 in 30 cities2011S = Spring 2011 data; 2011SU = Summer 2011 data
  8. Show Thyself! You in The Chinese have moved from expressing Writing themselves freely in words on the internet to appearing under the shai spotlight as they really are. This is yet another breakthrough in self- You in expression. Person For the second season of “China‟s Got Talent”, there were more than 50,000 entrants. From the airing of the first episode, it was the most viewed programme in Shanghai and the second most viewed nationwide. Although in this respect, it was similar to the first season, viewing figures this year grew by more than 50% both regionally and nationwide. It is evident that China‟s passion for self-expression is on the increase.
  9. Everyone Chinese do not just want self- expression. They carry this into dailyGoes consumption too and want to be‘Custom Made’ unique in every way. “I try to modify products I bought from “I am willing to spend a bit more to buy the shelf to make them fit my taste” things that I believe are % % original or one of its kind” “I like to dress to be unique; to show that I am different from others” %Source: CNRS2006~CNRS2010 Scope of Survey: 30 cities
  10. TREND 2 Eco-FriendlyAs the concept of environmental protection starts to get through toconsumers, isolated, random environmental initiatives are seen asinadequate. Consumers now focus more and more on the concept of thetotal environment. This means connecting together all the links of life intoa complete ecological chain, and deriving from this a whole environmentalway of living, rather than just a series of short-term initiatives. Greenactivities are integrated into the surrounding environment to arrive at a“complete” natural ecological system. For example, if you take thedecision to put a plant in a room, you also have to provide decenttreatment for the insects which it attracts, since the plant and the insectstogether constitute an ecosphere.
  11. 58.5% of respondents stated that they would be willing to change their lifestyle to protect the environment. Environmental protection no longer consists only of isolated, random initiatives. More and more it is finding its way into every fabric of consumers‟ lives and becoming a way of living.Source: CNRS 2011 Scope of survey: 36 cities
  12. No Pollution Caused byEnvironmental ProtectionThere is an environmental product called „zeropackaging plant‟. It comes in beautiful packaging,with a soil and a plant. The reason it is called „zeropackaging plant‟ is because the beautiful packagingcan supply nutrients to the soil. This avoidsincreasing pollutants in the course of buying greenproducts. The outcome is truly zero pollution. The Shanghai Eco-House was a Best Practice at the 2010 World Expo. Its design integrated five major ecological principles (wind, light, shadow, green and waste) in its structure and technical installations. It is a showcase of what a „LOHAS‟ house, which is conducive to a lifestyle of health and sustainability, is like.
  13. Architecture with a lifeThe Shanghai Oriental Sports Center, opened in July 2011, was designed withan eco-friendly concept in mind. A complete aquatic eco-system was built intothe man-made lake surrounding the sports center. It has put in phytoplankton,zooplankton, shrimps, fish and decomposers etc. to make up a complete foodchain, so that the lake has the ability to self-cleaned.
  14. TREND 3 The Hybrid Economy• As the economy develops and the internet spreads, focusing exclusively on one’s own development is no longer a safe policy for marketers. More and more brands and categories are breaking out of their own protective cocoons and experimenting with new forms of joint ventures: cars team up with luggage, pension schemes with daily consumption. There is also the development of social TV, combining TV with mobile devices and social networking sites. It’s not just a question of one brand partnering with other brands, but the different approaches of wholly unrelated categories are now being coupled to meet consumers’ various needs.
  15. Vualla is an application based on the iPad which fuses theHybrid characteristics of TV, mobile devices and social networking to create a completely new media form, referred to as „social TV‟.Media Users can watch TV when and where they want, and also share related information with friends at the same time. social mobile social TV TV networking devices smart TV sites Vualla
  16. Hybrid Economic Modes Spending EarningPension + consumption = ‘consumption pension’• According to the „consumption pension‟ scheme launched by the Chongqing government, the people of Chongqing can collect points on a card. When they spend at designated shops, supermarkets, restaurants and hotels, these businesses will reserve a certain amount and transfer it back to the consumers‟ bank accounts to be paid into a pension scheme.• So „spending‟ is not simply an outgoing transaction, it is also „earning‟ for the future.
  17. CrossoverIt has become quite a craze for brands indifferent fields to cooperate in creating newproducts. Cars join with real estates, luxurygoods with cars, and luxury goods with leisureproducts. When such ventures are successful,it‟s a win-win situation for both parties. Eachpartner gains in consumer base and anincrease in awareness & preference.
  18. TREND 4 Tech 360Changes in lifestyles today make people more dependent on science andtechnology. Individuals have around them a battery of hi-tech products, eachperforming a different function. Yet there are all kinds of indications thattechnology integration is becoming a major trend. The various technologies arebecoming invisibly linked, so that mobile phones can control TVs, or electriclights can modulate audio effects. In future, consumers will not be dealing withstand-alone high-tech devices, but will find science and technology penetratingevery facet of their lives. It will be an environment that is surrounded bytechnology 360 degree.
  19. Android@HomeBy the end of 2011, Lighting Science plans tolaunch its first „intelligent LED light-bulb‟.Mobile devices which have Google Android(mobile phones, tablet PCs, palm-tops) will beable to control these bulbs through a newopen source Wi-Fi protocol, so users will beable to put their Android mobile devices towork to adjust the lighting remotely at thetouch of a button -- easy, convenient, andenergy-efficient. Gadgetnet As the name suggests, the “gadgetnet” is a network that links gadget to gadget. Its core and foundation is the internet, but has extended to linking up gadgets to exchange and communicate information. The individual gadgets are more strongly interlinked than ever before.
  20. The Omnimedia Age Cloud computing is a major driving force towards integration of the media environment. Invisible bridges appear between all the different channels, and they link up with and act on each other. Information picked up in one medium can then be followed up in another medium. Different media can also interact in real time, allowing for the creation of truly collaborative content. Shanghai Media Group has a new entertainment program, “Date on Saturday,” which has come up with an App that allows mobile phones & tablet PCs to interact with the TV program. Viewers can sign in using QR-codes and interact with the celebrities on the show. They can also look for like-minded individuals via LBS technology. In this way, there is seamless integration of the big and small screens, providing an omnimedia experience to consumers.
  21. TREND 5Virtual & Physical WorldsSeeping into Each OtherIt is becoming more difficult to make acompletely clear distinction between thevirtual world and physical world, andconsumers can shuttle between them atwill. Relationships, experiences andemotional exchanges in the virtual worldinevitably have a direct or indirect effecton consumer behaviour and purchasedecisions in the real world. Similarly,experiences in the real world willdetermine consumers‟ opinions, attitudesand influence in the virtual world. Thevirtual and the physical worlds affect andchange each other, and the boundarybetween them becomes ever moretenuous. The growth of the O2O (Onlineto Offline) mode cannot be ignored.
  22. The Virtual The virtual world is acting more and more as a guide to real life, and is„Lights Up‟ the Real having an enormous effect on actual consumer behaviour. “When I need information, the first thing I % think of is to search on the internet” “Virtual Buying Guide” QQ Show, which lets consumer try out clothing on a virtual image, also displays at the bottom of the page garments and shops on Taobao which match the clothes consumers are trying on. This makes it easier for consumers to buy. % “Websites usually visited on the internet are related to information on lifestyle”Source: CMMS2003S~CMMS2011SU Scope of survey: 15-40y.o. in 30 cities
  23. Consumption OfflineOffline Creates Online + Posting Online Chinese love to comment and share online. For more and more restaurant diners, the first thing is not to eat but to tweet. They instantly publish their reactions to the food on the internet, sharing them with other people.Experience Offline + Action OnlineTaobao Mall in Beijing set up the first offline experience centre for home decoration, bringingtogether e-shopping and offline sampling. This is to facilitate consumers to make better choiceswhen they buy online. When consumers have finished looking at the products in the physicalworld, they can go straight to the service terminals provided, log on to Taobao, and place orders.
  24. Mobile phone QR-code scanning involves applying theQR-Code mobile’s image-recording ability to the scanning of QR- codes and retrieving the information stored there. This isShopping followed by further steps such as going online, sending a text message, dialing a number, exchanging information, or entering text automatically. E-shopping is no longer just an online activity. It is increasingly penetrating consumers‟ real lives, becoming available at any time or place. Yihaodian, the famous online supermarket, offers QR-code shopping in every big Shanghai metro station. Each product shown in giant LED advertisements has its own QR-code, which consumers can scan with their mobile phones. The product then goes into their Yihaodian virtual trolley and consumers can proceed to check- out online.
  25. AR Online Dress Show Using the latest augmented reality (AR) digital technology, the Yishion clothing brand has launched its “AR online fitting”. After consumers buy a Yishion product they will be invited to take part in this activity digitally. With a web-cam, they can try out different outfits with AR-codes, take photo shots and make them into a video at the same time. This video is then combined with Han Geng into an advertisement for the product, with the consumer becoming the star of the ad. This is not just a fusion of offline with online. This mode is great for promoting sales in stores.
  26. TREND 6 Free??Free!!In times when almost every product/servicegoes into a price hike, the appeal of “free” asa marketing concept is obvious. Nowadays,there are opportunities for consumers toobtain products/services without having topay.More and more brands are deploying a freestrategy in their marketing campaigns. Withlittle or no perceived differences betweenproducts these days, the ability to induceconsumers to try a product, albeit by a freestrategy, is already a foot in the door formarketers.In some cases, “free” has gone from its initialrole as a promotional tool to a long termbusiness model. “Free” can come in verydifferent formats, such as barter, consumersparticipating in a promotional activity orpaying for products by performing services forthe marketer.
  27. More and More Acceptance of Free Trials Willing to Try % Sayings like “the sky doesn‟t rain pie” and “there‟s no such thing as a free lunch” represent a traditional way of thinking which used to have enormous influence. However, Chinese nowadays are more willing to give new things, such as free trials, a try. Barter Bartering goods was the way people used to trade before the invention of money, and now it‟s making a comeback. However, Consumption nowadays, barter is no longer confined to material things, but intellectual and artistic goods are also included. People exchange not just physical objects but experiences, feelings, information and skills. At emotional give-and-take parties, for example, everyone who takes part gets to hear other people‟s riveting stories, but is also expected to share his/her stories in return. The old saying is right: “The talk of money hurts (people‟s) feelings”. This new barter consumption, which is rich in interest and excitement, has become a new medium of emotional exchange and entertainment.Source: CMMS2004S~CMMS2011SU Scope of survey: 15-40 age group in 30 cities
  28. Free virtual $$ for watching ads Noisey was a joint event organized by Dell and Intel in 2011. This event was targeted at Chinese young adults, and involved a “FREE” crossover platform. It utilized the 17bi (a virtual coin) of InGameAd Interactive. It embedded Noisey video footages into a number of social games, working like the YouTube for gamers. When the gamers watched Noisey ads, they were rewarded with virtual money in the form of 17bi, which they could then use in social games across different platforms to redeem props, or as currency. This is a win-win situation: advertisers get their ads watched while gamers can earn virtual points. Number of fans jumped from 118 to 9901!!
  29. VANCL Star VANCL Star is a promotional activity launched by VANCL to enable consumers „to get fame and economic benefit from their fashion sense‟. Individuals can upload their own „Vancl ensemble‟ on to the internet, and other users can check them out and vote on them.How many VANCL products are sold due to aconsumer‟s clothes matching sense will be acriterion for whether the consumer will beranked as a „Star‟. The sales ranking thenputs on record how much influence each„Star‟ has. The more influence the Star hason VANCL sales, the greater the personalcommission that s/he is given. Gettingsomething back without paying anything outis a dream investment model for consumers.For VANCL, the influence of their „Stars‟ isthe basis on which to sell more apparels.
  30. Comments = Money Influence = OpportunityBeing able to buy with no effort at all isone of the ways in which the web- This is another versionbased “free” strategy currently of the “free” strategy:manifests itself. Consumers‟ your influence in theparticipation in promotions becomes a virtual world determinesway to earn (virtual) money. your probability of success, since the more“Follow + Comment”= $ people you bring in the more chances you get to“Follow + Participate”= $ draw a prize.“Follow + Forward”= $ Promotion such as this “groupon for nothing” scheme organized by dianping.com involves utilizing consumer‟s influence and rewarding them for flexing that influence.
  31. TREND 7 Lazy Consumption As the pace of life heats up, consumers are too busy to make a proper responseto all sorts of things, and they begin to feel that there are not enough hours in theday. So people dream of taking on a „servant‟, someone to help them filterinformation, make exact plans and put forward good recommendations. In answerto this surging demand, all sorts of intermediary and pooling services have sprungup, like Douban Same City: dates, places and services or activities are all set out ina table. All the consumer has to do is to pick the one he wants from the manyexcellent choices on offer.
  32. Aggregation Websites Activity Managers As the intellectual and artistic life of Aggregation sites like qunar.com the Chinese become richer, various allow consumers to get from a single websites dedicated to arranging site information which they would leisure activities have sprung up and otherwise have to search for in many attracted attention. Sites like Douban different places. Same City, Gewara and Shanghai Specialist aggregation sites, like Culture Information Center help “Frontiers of Science”, keep people up consumers sort through what‟s on or to date on news and new directions in what‟s going to be on (movies, plays, different fields. concerts etc.) in different cities and also offer special deals on tickets.
  33. @TaobaoForTheLazy Has this ever happened to you? You are walking on the street or browsing online and you see something that takes your fancy, but you have no idea what brand it is or where to buy it. However, going off on a search to find out about it is going to be quite an undertaking, far too troublesome for the efficiency-conscious modern consumer in you.. It is at this point that the arrival of @TaobaoForTheLazy is greeted with cheers. @TaobaoForTheLazy, as the name suggests, is a service targeted at lazy people. If you publish here a photo of the product you are looking for, all sorts of experts will quickly give you the information you want, saving you time and effort.
  34. TREND 8 Grass Roots Decision Makers There‟s an ancient Chinese saying which gets it right: “When everybodyadds fuel the flames rise high.” This is exactly how to succeed in theinternet age, by deploying the wisdom and strength of the general public tothe greatest possible extent. A single move or pronouncement from amarketer can quickly get a massive response, and can end up making bigwaves. The invitation to “tell me your ideal dessert” appeared on amicroblog, and despite its simplicity was answered by a vast number ofnetizens. Since it is so easy and convenient to get involved like this,consumers do not need to think too much. If, by lifting a finger, consumerscan change the world, why not do it?
  35. Popular Participation Have made comments on the internet %Is on the RiseThe proportion of Chinese who havecommented online has risen from 2.8% in2009 to 9.4% in 2011. Things they havecommented on include community affairs,entertainment gossip and shared items fromfriends. Popular participation in China is on therise. Instead of just following instructions fromothers, people are now becoming aware of therole they themselves can play. Grass-Roots Detectives When the Guo Meimei story was exposed, the public‟s craving for the real truth made them intensely interested. Huge numbers of netizens tried to unearth and piece together the facts. Fooling the public is becoming less and less easy, as more and more people are aware of their powers and rights. People will get together and assert their authority.Source: CMMS2009A~CMMS2011SU Scope of survey:30 cities
  36. Xiaomi mobile phone – a live OS This year, while most people around the world are waiting for the launch of a new version of the iPhone, another mobile phone was enthusiastically awaited for by the Chinese consumers. This is the Xiaomi mobile phone. One of the characteristics of the Xiaomi mobile phone is that it uses an original designed operating system called MIUI. It is the first Chinese designed OS that allows zealots to participate in the improvement of the original design. Every zealot of Xiaomi can contribute to the betterment of the mobile phone and is a designer of the product. Upgrades are carried out on every Friday. MIUI is a live operating system, allowing consumers to continuously experience a better version of the mobile phone. Xiaomi was very well received and got 300,000 orders within the first 34 hours of its launch in October 2011.
  37. Buyers CreatorsThe VW „People‟s Car Project‟ is an interactive creative platform which invitesconsumers into a dialogue. Consumers can join the process of creation. VW stimulatestheir creative imagination. In return, consumers with their innovative and creative ideasinject new inspiration into VW‟s brand creativity.VW is completely committed to listening to what Chinese consumers want, and „ThePeople‟s Car Project‟ is an extremely interactive and engaging way into consumers‟hearts. Consumers can vote on all the original design features, and those which getthe most votes will end up being used by VW in the production of the final product.This is surely the formula for producing a winning product which is completely in linewith what consumers want.
  38. TREND 9Alternative Sensory Experience Sensory Alternative 2011 ExperienceConsumption 2012 Sensory Experience Traditional sensory experience involving a single sense, however powerful it may be, is becoming less and less able to grab consumers‟ attention.There is a better chance of their interest being aroused if they have experiences, in more than one of their senses, which go beyond conventional expectations. Sometimes this means switching to another sense, such as voice-controlled instead of touchscreen games, or food being played instead of simply eaten. Sometimes different senses are combined – for example 4D movies exploit the linked activation of different senses. These new-style novelty experiences act powerfully on consumers to persuade them to try new products and brands.
  39. % Consider the product’s outlook when buying a camera For hi-tech products like mobile Consider the product’s outlook when buying a mobile phones and cameras, high phone performance is not enough. For Chinese consumers, they are not just communication or imaging tools, they are also fashion accessories. For this reason, how they look visually is getting more and more attention, and can even be the deciding factor when a purchase is made. % Interest in touchscreen in the ChinaTouch-screen mobile phones are one of the % mobile phone marketgreat technical breakthroughs of the past fewyears, and are becoming more and morepopular with consumers.The sense of touch is now one of the thingspeople care about most in a mobile phone.Just a couple of years ago, who would haveasked: “How does the phone feel?” Source:CC03S~CC11SU Base: 30 cities S=Spring, SU=Summer, A=Autumn, WI=Winter Internet Consumer Research Centre (ZDC), 2010-2011
  40. Voice-Controlled Games Do you remember when you were young, there were „hands and feet‟ games, and you twisted yourself into strange shapes to use hands and feet together? Nowadays, some games require „no hands, no feet‟. Voice-controlled games have appeared, changing all our assumptions about how games can be played. They have been greeted with astonishment and great enthusiasm.The game Pah! for the iOS platform involvesusing a voice-controlled spaceship toeliminate obstacles. As the player‟s voicegoes up or down, the spaceship heads Pah!skywards or earthwards to dodge theasteroids heading towards it. With a short,sharp “pah” sound you can launch a missile.
  41. Handsets Not Just for HandsA transparent mobile that can “change faces”: the Window Phone.With the Window Phone, when you touch the „weather report‟, information aredelivered in multi-sensory form. This completely overturns what we usually dowith our mobiles, and so has aroused a lot of interest in the market.
  42. TREND 10 “Com”plex Consumption As today‟s consumers get more sophisticated and have more money in their pockets, they no longer consume just to fit in with other people‟s taste. They also no longer confine themselves to practical products and services. Buying for interest is becoming the consumption focus of more and more Chinese, and in consequence the „complexes‟ have arrived: cartoon character complex, travel complex, IT complex. On the things they are especially interested in, those who have a complex will spend their money without stint. What kind of „complex‟ do you have?
  43. Bye Bye, Rationality The Chinese have always been thrifty, so they like to buy things that are functional. “I will buy things that I do not need and are not practical, so long as I like it” When you buy something the first question % you get asked is: “What are you going to use it for?” But these days, with the development of the economy & society, we find that Chinese are more and more ready to act on their interests and enthusiasms. If they like something they may be prepared to buy it even if it has no practical use. Whether you like something or not, instead of its usefulness, has become the main criterion for buying. As the Chinese craze for virtual products Badge Fanatics gathers momentum, some people are prepared to spend a lot of money and time getting badges from QQ or Weibo or jiepang.com, even though they are of no practical use and cannot be touched.Source: CNRS2006~CNRS2010 Scope of survey: 30 cities
  44. The FoodieThere are some people who have only one interest. Theylove to taste all kinds of fine food. These are the „foodies‟,and they have recently been on the rise. They let nodifficulty stand in their way and they overcome allobstacles just to eat. Apple hairstyle The Apple Fan As Apple becomes more popular in the Chinese market, a group known as „Apple fans‟ has come into existence. They are passionately loyal Apple enthusiasts who own every kind of Apple products and would like “Apple Family Portrait” from an Apple fan their lives to become all Apple. This is one of the reasons why last year one eighth of Apple‟sEat hotpot while on IV drip profits came from China.
  45. The Media “Com”plexWith the growing importance of the various media in consumers‟ lives, the mediahave joined products and brands as a target of “com”plex consumption. Theseconsumers use all kinds of media many times a day, and they cannot stopthemselves. Phrases like „microblog complex‟, „Xiaonei complex‟, and „TV complex‟are on everybody‟s lips these days.
  46. TREND 11 World of Gamification „Be serious!‟ is a phrase which has echoed across many generations, giving voice to the respect Chinese have for sobriety. However, playfulness is an ancient characteristic that is written into the human genes, and it will never be completely stamped out. „Amusing yourself to death‟ is back on the scene, but this time consumers are not simply after the entertainment or amusement, but have developed an interest in some basic game mechanics inherent in game-playing, such as fun, competition, rewards and levels. One example is game- based teaching known as „edutainment‟. Nowadays, more and more game mechanics are being applied to commercial practice, attracting consumers to participate and rewarding them as they move to ever higher levels. %As far as the Chinese are concerned, the days of belt-tightening poverty have faded from view, and enjoyingthe present moment is the new theme. For this veryreason, game mechanics are welcomed by consumers.It is like the line which crops up often in martial artsfiction: “Time is something I‟m not short of; so there‟s noreason not to have a bit of fun.” Source: CMMS2003S~CMMS2011SU Scope of survey: 30 cities
  47. Comparison of What Chinese & Americans Do Onlineinstant messaging As has been shown in many research, Chineseon-line music are keener on gamesnews-reading than other people. Manyon-line video people in China havesearch engines been deeply influenced by these games, noton-line games China least the new generationemail USA of young people, whoblogs have been immersed insocial networking them throughout their upbringing. The gamee-commerce mechanics on whichon-line banking games are built play andiscussion forums important role in makingjob-seeking the games addictive.Source: China‟s Digital Generations 2.0, BCG
  48. Games for AdultsAgainst the claim that games are the specialpreserve of kids, the success of Angry Birds andFruit Ninja in the adult world reminds us thatperhaps adults need games even more. Adultsare under lots of pressure in their daily lives, butthey cannot let off steam the way children do.Games have become one of the ways in whichthey relax and let off steam. This provides thebasis for gamification, in which marketers employgame mechanics to attract consumers.
  49. “Class” SocietyIf somebody introduces himself by saying“Hi, I‟m the Laird of the Oriental PearlTower”, do not think he is crazy, becausethat is who he really is. Or rather, that iswho he is in the virtual worldBadges, titles, certification…… the virtualposition and status conferred by thesevirtual objects encourage active Lairdparticipation. The reason is that every onewants to prove that s/he is “a person ofstatus!”
  50. A Sense of CompetitionWith the rise of social network sites such asRenren and Weibo, statistics such as thenumber of „fans‟ (like Twitter „followers‟) and thenumber of times a person‟s Weibo post hasbeen forwarded or commented on, havebecome a measure of personal influence.When the need for emulation kicks in, theChinese tend to pit themselves against othersin the virtual world. There is actually a marketfor selling „fans‟. Nike+ uses „community‟ concepts to appeal to consumers‟ natural competitiveness, setting up head to head competitions in sporting activities and thus encouraging people to do sport. In the Nike+ online community, users can issue all kinds of challenges, daring their friends & colleagues to trials of strength. Let‟s see who‟s the better sportsman?!
  51. They Can Play TogetherThere is an often heard sentence, “They canplay together,” which brings out the socialfunction of gaming.Famous sports brands like Nike, Puma and LiNing have all taken to promoting „nightrunning‟, which, as the name suggests, isgoing running after dark.As people run, others begin to tag along, andthe group gradually swells in number. Throughsport you get to know other people with thesame interest, and your social needs are met.
  52. TREND 12 Zhai
  53. The „cocooning‟ man or woman is not a novelty. Faith Popcorn, thefamous US trend forecaster, first proposed „Cocooning‟ as a trend in1992. In recent years, this trend has gained critical mass and isbecoming more prominent in China. Cocooners are called Zhais inChinese. The proliferation of the Zhai lifestyle brings with it an entireZhai economy, such as home delivery service, E-shopping, increasedneed for communication and technology products etc. Furthermore,Zhais come in different varieties. They are no longer just the stay-at-home type. With the maturity of mobile technologies, many Zhais goout and get around. However, they morph into IT Zhais. Despitebeing and hanging around with people, their main focus is their mobiledevice instead of people.
  54. From 2004 to 2010 saw a general upward trend in the proportion of consumers whose lifestyle fitted the definition of Zhais %Source: CMMS05S~CMMS11S Scope of survey: 30 cities
  55. 76% of respondents agreed with the statement:“The Zhaithe future. likely to be adopted by more and more lifestyle ispeople in ” 81.2% of respondents agreed that:“E-shopping is replacing traditional shopping, becoming my main means of consumption. ” Source: The Zhai Lifestyle, MEC proprietary research, 2011
  56. The Rise of A wall covered with take-out menus and a Favorites folder crammed full of various e-the Zhai Economy shopping web-sites have become an indispensable part of life for more and more consumers. These forms of economic activities are part and parcel of the Zhai lifestyle. As the Zhai community grows bigger, such services are more in demand.Source: Numbers of Users in the Chinese Online Market , iResearch Consulting 2010
  57. New Pleasures for the Zhai Lifestyle October 09, 2011Shortly before the Mid-Autumn Festival, Baidu Encyclopaedia made a change to itsentry under the word „Moon‟. The site visitor‟s IP address and server time wereused to establish which city they were in, and the web page showed a real timeimage of the moon as it appeared where the user was. In this way, even peoplewho were lounging about indoors and had no intention of going out were able tofollow and enjoy the changes of the beautiful mid-autumn moon.As Zhais grow in number, they will look with greater favour on brands or productswhich let them enjoy indoors the beauties of the outside world without having tophysically go out.
  58. The „IT Zhais‟The development of mobile technology enables Zhaisto go outdoors.Even when they actually go out, more and more peopleremain in their own small world. They do notcommunicate much with the outside world, or ratherthey do not communicate face to face. It is in the virtualworld that they have built for themselves that theysocialize and interact with others. Two people sittingside by side, not saying a word to each other, butabsorb in surfing on their mobiles – this has become acommon scene. These are the IT Zhais.
  59. Implications and Recommendations
  60. Implications & recommendations - 1• With the continuous integration of technology and media (T3: Hybrid Economy and T4: Tech 360), brands should have a core idea that can be expanded and content that is liquid enough to flow from one channel to another. Conversely, each channel can carry different pieces of information about the brand, inviting consumers to participate in piecing together the brand content or using the bits and pieces of information to create their own UGC (user generated content).• With the development of T1: Me Consumption and T8: Grass Roots Decision Makers, how to leverage the power of grass roots decision makers is the next Mount Everest that marketers have to climb. Marketers do not just have to invite consumers into their brand communications, but also to tap into their creativity and innovativeness by letting them participate in the development of products and services.
  61. Implications & recommendations - 2• The boundaries of „new media‟ will continue to broaden. With the development of T1: Me Consumption and T8: Grass Roots Decision Makers, every consumer can potentially be a new channel for a brand to communicate through. At the same time, with T6: Free??Free!!, the “free strategy” is an effective means to enroll consumers to communicate the brand message in exchange for goods and services.• In order to ride on the continuously growing trend of T12: Zhai, there are three things that a brand can do: • 1) Become a friend of the consumer in the digital world, and help them to lead a healthy and exciting Zhai lifestyle; • 2) Build a positive, forward looking brand personality and host events that entice Zhais to leave their homes and go into the physical world to socialize with others; • 3) Act as a bridge to assist Zhais to traverse the virtual and physical worlds seamlessly.
  62. Implications & recommendations - 3• Given its huge gamer base, China will probably progress from gaming to T11: World of Gamification faster than most other countries. Gamification is a wildcard and lends fun and excitement to anything that it is associated with: • 1) Deploying games in brand communication, or building game mechanics into the purchasing process to move consumers along the purchase funnel, are great ways for brands to engage with consumers. • 2) Gamification can also breath new life into loyalty programs. Accumulation of loyalty points for a consumer can be made more competitive and more social by tying the consumer‟s progress to others for competition. If both the participants and their friends/competitors can see the results in real time, the process create an immediate feedback loop and can drive a sense of urgency to accumulate more loyalty points.• Applying T6: Free??Free!! to T11: World of Gamification, games can be designed in such a way that gamers get free gifts, points or virtual coins when they get their friends to sign up, complete tasks with their friends‟ help and post their accomplishments on social media websites. This gets more people to participate, creating an endless loop of cooperative play.
  63. Implications & recommendations - 4• T4: Tech 360 is changing consumers‟ usage and preference for products. A brand needs to incorporate new technology into its products and services, so that the product and technology become one and the same in consumers‟ minds. When consumers think of the new technology, they think of the brand. Technology is also at the heart of enabling creativity and delivery of T9: Alternative Sensory Experience and T5: Virtual & Physical Worlds Seeping into Each Other.• With the acceleration of pace of life, increasing pressure, and T7: Lazy Consumption, consumer demands begin to polarize. On the one end, products, services and technology that are simple and intuitive are welcomed. On the other end of the scale, packaged solutions that bundles complicated steps into a one-stop solution will also be well-received, as they cut down on the time and resources that consumers have to put in.
  64. For more information, please contact:Theresa LooNational Director – Strategic Planning, Analytics & InsightMEC China29/F, The Center989 Changle RoadShanghai China 200031Direct line: +86 21 2307 7790Switchboard: +86 21 2307 7800theresa.loo@mecglobal.comProject Manager & Editor: Wu Jin (Mandy)Project Consultant: Amanda SongTrends Researcher: Liu Jie (Jane) , Stephanie Chai, Anita Wang, Cai Jing

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