Taking market pulse of China's youth tribes

Illustration by Zhou Tao

Photo by Zhou Tao

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LIKE the sequel to a Hollywood blockbuster, future ad campaigns by online apparel retailer Vancl will have a lot to live up to.

Will they ever be able replicate the sensation created by its series of offline ads last year - plastering buses, subways and billboards and hitting TV screens - which swiftly went viral across China as countless "netizens" designed their own versions of the ad?

It's not an easy call - at least not among China's fickle urban youth whom Vancl's ads want to reach with their simple, down-to-earth appeal and whose list of celebrity endorsements includes that of Han Han, the country's wildly popular speed racer and writer appearing in simple jeans and a T-shirt alongside his quote listing what he loves (including food stalls at night and car racing) and what he stands for ("I represent myself. I'm like you ... I am Vancl.")

Vancl's 2010 campaign has raised the bar for youth marketers in China. "The genius of the campaign seems to be the very personal resonance with the mindset and emotions of Chinese youth," says Wharton marketing professor David Bell. "This occurs not through the use of iconic figures, but through a conversational style and an ability to ... reflect on what it means to be young and Chinese [today]."

With that, Vancl has joined a growing number of companies in China that are becoming "very good at building a community" with young consumers.

There's good reason for that quest. China's youth "will become the core driver of consumer spending in China," predicts Allison Luong, managing director of Pearl Research, a San Francisco-based firm analyzing the interactive games and entertainment industry. Pearl estimates there are more than 300 million Chinese between the ages of 16 and 30 with some US$136 billion to spend.

Purchasing power

According to Starcom China, a division of Paris-based advertising and communications firm Publicis Groupe, these consumers - most of whom have grown up as only children under China's family planning policy - directly or indirectly account for 50 percent of all household spending in China.

That gives them unprecedented purchasing power, says Angie Chan, China senior research manager at Starcom China. Although relatively new to the shopping malls and boutiques that have helped global brands in the West thrive for years, China's young consumers are already making a mark.

But winning their loyalty today requires going beyond the cash register, say corporate marketing strategists. As in other countries, China's new generation of consumers seek out brands that they feel reflect who they are, and are "a quick way to express something ... or compensate for things that aren't there," says Wharton marketing professor Keisha M. Cutright.

But arguably unlike in other countries, what's beginning to emerge now in China is that its youth are also receptive to brands that can improve - or even radically change - how they lead their lives.

Figuring out how to do that is a big conundrum for corporate marketers - both local and foreign - not least because the values and identities that China's youth say they uphold often change just as fast as a fashion season.

"The kids in China now can decide what they want," says Qiaowei Shen, a Wharton marketing professor born in Hangzhou and educated in Beijing before moving to the US. "When I was young, you would accept what your parents chose for you. We weren't rich. There wasn't a lot of money to spend."

Today, youth are more focused on their own needs, and "more than ever before want to define themselves in a different way," she says. "They want to be unique... I think there's an awakening sense of self."

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