The 6th China International Import Expo (CIIE) is set to take place from November 5th to 10th, 2023 at the National Exhibition and Convention Center in Shanghai, with participation from over 3,400 companies representing more than 120 countries and regions. 

This year’s CIIE will cover 7 key industries. In anticipation of the event, Labbrand has chosen 3 categories against which to share our latest insights on customer trends and brand-building best practices. Together, these insights can help foreign brands gain a richer understanding of how to succeed in the Chinese market of today and tomorrow. 

Food and beverage: localization of tastes and consumption choices 

In recent years, a remarkable shift has taken place in the Chinese F&B sector. According to the 2023 Global Food and Beverage Industry Development Trends and Data Insights Report, consumer demand is trending in the direction of ‘sensible eating’. This attitude emphasizes health, nutrition and quality. Under this general trend, concepts like ‘zero additives’ or ‘low fat’ have fueled the growth of many new brands and products.  

In many categories, Chinese consumers, once enamored with foreign products and brands, are turning to local alternatives. We believe several factors explain this shift. First, the general progress of China’s supply chain and food safety standards means that a new generation of consumers is raised without the memories of past food safety scandals and showing full confidence in local brands. In short: foreign brands can no longer command a ‘safety premium’ and need to work harder to cater to local customer preferences. 

Meanwhile, a new generation of Chinese brands, such as Genki Forest 元气森林 or Chocoday 每日黑巧,  is coming to maturity. These brands have been early to capitalize on the ‘sensible eating’ trend, pushing healthy alternatives in many categories and outflanking foreign brands in terms of pace of product innovation. They have also proved adept at using new marketing and sales tactics to supercharge their growth. They have applied considerable budget and know how to connect with their audiences, especially through digital channels. Having found initial success through single-product niche strategies, many of these brands are now competing with established FMCG giants across larger product ranges. 

​Through our experience working with both established global F&B groups such as Coca-Cola or Pernod Ricard and local upstarts such as the instant noodle brand Baixiang, we see this trend from both angles. While local brands rise steadily, foreign players  are rushing to localize their brand and experience on a deeper level. Beyond a Chinese name, many brands are seeking to enrich their local identity through Chinese nicknames, new packaging, or new made-for-China SKUs with new recipes. The Chinese market without a doubt still offers many opportunities for new brands, especially in nascent categories, but in-depth localization must be baked into the strategy from day 1. 

Customer goods: from manifesting status to showcasing taste 

With the pandemic behind us, high-end consumer brands have resumed their growth in China. However, in this new ‘experience economy’, young Chinese customers have become more thoughtful and discerning when purchasing high-end products. How can luxury brands re-interpret themselves with modernity to attract Chinese consumers nowadays?

In the past, luxury brands emphasized service and status. Today, premium brands are exploring new paths. Through our experience working with a variety of industries within the luxury sector, such as auto, travel, retail, beauty, and fragrance, we have identified 4 types of experiences that represent the future of luxury consumption in China. 

• Tech-futurism Apocalypse 

It re-evaluates the relationship between humans, nature, and technology in an unprecedented way, going beyond the anthropocentric stance and into the cosmos. It drives consumers to adopt a forward-thinking outlook through mind-blowing and somewhat unsettling experiences. 

• Heritage Revitalization 

The traditional heritage is revitalized through the infusion of modern elements with striking and impactful contrast. It catches the eyes of consumers and satisfies their yearning for innovation and modernization of established heritage. 

• Tao Hua Yuan – Utopia 

It creates an exceptional reverie that values deep emotional relationships, higher spiritual aspirations and inner being, a calling for the return to the essence of life. 

Consumers seek to transcend their lives beyond material possessions by engaging in a community with higher spiritual pursuits. 

• Zen Purity 

The profound emotional experience, deep wisdom, and inner abundance are manifested in a modern and understated way – reduction & minimalism. It enables consumers to cultivate a heightened sense of self-awareness and spiritual enlightenment. Emptiness allows inner fullness. 

Looking ahead to the next years and the next decade, Labbrand believes that brands should embrace these trends to connect with progressive youngsters through experiences, while simultaneously maximizing brand impact through community building and occupying aspirational dreams in the growth categories. 

Services: the rise of hybrid, culture-infused, participation-driven services 

What is commonly referred to as the ’Eat, Drink and Have Fun’ industry is driving customer demand post COVID. While spending has been more cautious in traditional categories such as apparel, auto or durable goods; Chinese consumers across all demographics are making services and experiences a bigger part of their lifestyle and spending behavior. A few data points bear out this observation: travel data from major holiday periods shows that domestic travel has already surpassed pre-pandemic levels, hotel rates in Q3 2023 are 6% over Q3 2019, consumer spending in the ‘Sports and Entertainment’ category is at over 180% of 2019 and hospitality group Accor has signed a record 125 new hotel deals in China this year, demonstrating remarkable confidence about future demand growth.  

In addition to growing, the service sector also constitutes a new area for innovation in brand and experience design. Based on our work with leading local and foreign players such as IHG, Jinjiang or Hilton; we see 3 major trends at play in this space that will shape both customer demand and future brand offerings:  

• Convergence: the frontiers between different categories of services are becoming more porous. Sports, arts, entertainment, hospitality, well-being, etc. are being integrated as part of new hybrid models that combine different types of experiences within a single location. Examples of this trend include The Drama Hotel, a collaboration between the hotel group Atour and the immersive theatre company Sleep No More, and Anaya, a new resort town famous for its combination of vacation and cultural amenities and its yearly theatre festival. Enterprising brands should think about ways to capitalize on this trend to create new experiences that transcend traditional categories and cater to customers’ desire for 360 immersion. 

• Culture: behind the so-called ‘service and experience economy’ we find a desire not just for entertainment but for culture. Customers seek greater meaning in their consumption, they wish for new experiences to elevate them in terms of knowledge and spirituality, to connect them with meaningful stories. The past years have seen a great flourishing in new IP development based on traditional Chinese culture, such as the Dunhuang(敦煌) IP that translated a tourism boom to Dunhuang(敦煌) and to similar cultural destinations. This desire for quality cultural experience also extends to foreign IPs such as the Jazz Montreux Festival, which held its first China edition in 2021, and Puys Du Fou which is bringing its approach to immersive history storytelling to China. We foresee many more opportunities for niche foreign culture IP to make their mark in the Chinese market in the years to come. 

• Participation: to speak about ‘service consumption’ only tells half of the story. What we witness is Chinese customers taking an active role as participants or even creators of their cultural and entertainment experiences. 2023’s ‘City Walk’ craze might on the surface look like a passing social media fad but really constitutes a desire to re-appropriate urban spaces as part of communal experiences. ‘City Walk’ has formed the basis of a new eco-system including everything from ‘City walk guides’ to bars, restaurants and ‘City walk friendly’ outdoor wear. This topic was the focus of a recent collaboration between Labbrand and Chunyue, a brand of packaged drinking water and flavored beverages under the Coca-Cola Company. We initiated ‘City Walk’ urban exploration activities, centered around the theme of ‘participation,’ and integrated the unique cultures of 29 cities in China for Chunyue. This project was a telling example of how even non-service brands can capitalize on increased spending on services and experiences to create new use cases and insert themselves into new settings. 

In general, consumer preferences are constantly changing. Brands should keep a firm grip on the shifting consumption patterns of Chinese consumers, employ multifaceted perspectives, gain insight into alterations in Chinese consumers’ lifestyles and purchasing behaviors. This includes exploring the underlying reasons for the changes and anticipating future trends to achieve consistent and high-quality growth in the Chinese market.