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China Premiumisation of Local Brands Before and After COVID-19 Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Premiumisation of Local Brands Before and After COVID-19 - China market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

Consumers’ consumption has become more cautious as a result of the uncertainty following the COVID-19 outbreak. However, despite this uncertainty, Mintel’s tracker data monitoring Chinese consumer attitudes post COVID-19 shows that trading down into cheaper brands is the least-preferred option for consumers looking to control their budgets. The increasing awareness of service value, holistic wellbeing and localism also create opportunities for premium domestic brands to strengthen connections with consumers via new channels and advocates.

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Expert analysis from a specialist in the field

Written by Keiyou Wang, a leading analyst in the Consumer sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Despite the short-term disruption, COVID-19 has brought a brighter spotlight on Chinese premium brands that many consumers’ purchasing has shifted to domestic products and services, as a result of reduced outbound travel and the concerns of after-service and warranty deepened. Keiyou Wang
Research Director

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What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Report Scope
        • Executive Summary

            • Impact of COVID-19 on the premiumisation of local brands
              • Chinese premium brands gain more attention after short-term disruption
                • Figure 1: Short, medium and long term impact of COVID-19 on premiumisation of local brands, April 2020
              • The consumer
                • Digital products take the lead in purchase experience
                  • Figure 2: Purchase of premium domestic products, February 2020
                • Price advantage is no longer a must for premium domestic products
                  • Figure 3: Price acceptance, February 2020
                • Chinese premium brands benefit from a combination of cultural contribution and social responsibility
                  • Figure 4: Perception of premium domestic brands vs foreign brands, February 2020
                • High-income consumers give more emotional credits to domestic brands while post-90s have more faith in their quality
                  • Figure 5: Perception of premium domestic brands vs foreign brands, by income level and generation, February 2020
                • Mixing Chinese classic elements with trendy culture aids differentiation
                  • Figure 6: Preferences in design, February 2020
                • “Less is more” aesthetic appeals to young consumers
                  • Figure 7: Preferences in design, by generation and city tier, February 2020
                • Raw material quality and technology marketing remain core concepts to win competitiveness
                  • Figure 8: Marketing of premiumisation, February 2020
                • Purchase premium domestic product to express patriotic sentiments
                  • Figure 9: Attitude towards premiumisation of domestic products, February 2020
                • What we think
                • The Impact of COVID-19 on Premiumisation of Local Brands

                    • Figure 10: Short, medium and long term impact of COVID-19 on premiumisation of local brands, April 2020
                  • Key trends/shifts after COVID-19
                    • Trend 1: Spending control is more about cautious consumption rather than trading down by brand
                      • Figure 11: Consideration towards control spending, first choice, December 2019
                    • Trend 2: Purchases shift to domestic as a result of reduced outbound travel
                      • Figure 12: Grocery shopping platforms – social e-commerce, by age, March to May 2020
                    • Trend 3: Rising awareness of after-sales services and warranty in a time of uncertainty
                      • Trend 4: Strengthened community function and trust in neighbourhood
                        • Figure 13: Agreement on “people become closer to their local communities”, by city tier, March 2020
                      • Trend 5: Increasing patriotic sentiments and the pursuit of cultural value engagements
                        • Trend 6: Less focus on appearance but more on holistic wellbeing
                          • Figure 14: Priority changes, May 2020
                        • Implications on the marketing mix
                          • Agility in pricing tactics while balancing with premium image
                            • Digitalisation for data-enabled customer relationship management and digital collaboration
                              • Neighbourhood engagement in Omni-channel building
                                • Ethical consideration in demonstration of authenticity
                                  • Marketing of holistic wellbeing with less anxiety but a peace of mind
                                    • COVID-19: China context
                                      • Figure 15: Accumulative confirmed cases of COVID-19 in China, January to April 2020
                                      • Figure 16: Status of returning to work, China, March and April 2020
                                  • Issues and Insights

                                    • Activated awareness of corporate social responsibility by COVID-19
                                      • The facts
                                        • The implications
                                          • Figure 17: “Employee sharing” scheme initiated by Hema Fresh Grocery, 2020
                                        • Increasing opportunities of engaging consumers with Chinese cultural values after COVID-19
                                          • The facts
                                            • The implications
                                              • Figure 18: White Rabbit x Godiva, February 2020
                                            • Potential of experiential advantages to unlock the market in lower tier cities
                                              • The facts
                                                • The implications
                                                  • Figure 19: Tmall smart nursery room, 2018
                                              • The Consumer – What You Need to Know

                                                • Acceptance of premium domestic digital devices ranks first
                                                  • Aggregate identification of cultural contribution and social responsibility
                                                    • Price advantage is no longer a must for premium domestic products
                                                      • Adding Chinese elements in design is seen as a way to differentiate
                                                        • Young generation expect brands to be more socially responsible
                                                          • Patriotic sentiments are highly associated with premium domestic product purchase
                                                          • Purchase of Premium Domestic Products

                                                            • Acceptance of premium domestic digital devices ranks first among other categories
                                                              • Figure 20: Purchase of premium domestic products, February 2020
                                                            • Consumers with higher income purchase more premium domestic products
                                                              • Figure 21: Purchase of premium domestic products, by income level, February 2020
                                                            • Usage of premium cosmetic products from domestic brands is high among women in their late 20s and 30s
                                                              • Figure 22: Purchase of premium domestic cosmetics and skincare, by gender and age, February 2020
                                                            • Gaps between men and women in acceptance of premium domestic fashion and bag brands are narrowing
                                                              • Figure 23: Purchase of premium domestic clothing and bags, by gender and age, February 2020
                                                            • Premium domestic food and drinks have potential in the kids market
                                                              • Figure 24: Purchase of premium domestic food and drinks, by family structure, February 2020
                                                          • Perception of Premium Domestic Brands vs. Foreign Brands

                                                            • Design and quality are still perceived as inferior to foreign brands
                                                              • Figure 25: Perception of premium domestic brands vs. foreign brands, February 2020
                                                            • Experiential advantages of premium domestic brands lure high-income consumers
                                                              • Figure 26: Perception of premium domestic brands vs. foreign brands, % saying premium domestic brands do better, by income level, February 2020
                                                            • Younger generation have more faith in premium domestic products’ quality
                                                              • Figure 27: Perception of premium domestic brands vs. foreign brands, % saying premium domestic brands do better, by generation, February 2020
                                                            • Purchase experience is a driving power for premium domestic brands in large home appliances
                                                              • Figure 28: Perception of premium domestic brands vs. foreign brands, by buyer segment, February 2020
                                                          • Price Acceptance

                                                            • Price advantage is no longer a must for premium domestic products
                                                              • Figure 29: Price acceptance, February 2020
                                                            • Strong support from post-90s for all categories
                                                              • Figure 30: Price acceptance, by generation, February 2020
                                                            • Recognition and expectations towards premium domestic daily necessities are higher in tier two cities
                                                              • Figure 31: Price acceptance, by city tier, February 2020
                                                            • High satisfaction towards mother and baby products and cosmetic/skincare products from premium domestic brands
                                                              • Figure 32: Price acceptance, by premium domestic buyer of the category, February 2020
                                                          • Preferences in Design

                                                            • Adding Chinese elements in design is seen as a way of differentiation
                                                              • Figure 33: Preferences in design, by generation and city tier, February 2020
                                                              • Figure 34: Preferences in design, by generation and city tier, February 2020
                                                            • “Less is more” aesthetic appeals to young consumers
                                                              • Figure 35: Preferences in design, by generation and city tier, February 2020
                                                              • Figure 36: Preferences in design, by generation and city tier, February 2020
                                                            • Product portfolio diversification could be another opportunity
                                                              • Figure 37: Preferences in design, by generation and city tier, February 2020
                                                              • Figure 38: Preferences in design, by generation and city tier, February 2020
                                                          • Marketing of Premiumisation

                                                            • Raw material quality and technology marketing remain core concepts to win competitiveness
                                                              • Figure 39: Factors that drive the purchase of premium domestic brands, February 2020
                                                            • Younger generation expect more emotional ties with premium domestic brands
                                                              • Figure 40: Factors that drive the purchase of premium domestic brands, by generation, February 2020
                                                            • Local cultural features are highlighted by consumers in lower tier cities
                                                              • Figure 41: Factors that drive the purchase of premium domestic brands, by tier, February 2020
                                                            • Collaboration is still effective but no longer a shortcut to premiumisation
                                                              • Figure 42: Factors that drive the purchase of premium domestic brands, by education, February 2020
                                                          • Attitudes towards Premiumisation of Domestic Products

                                                            • Social and personal emotions are associated with premium domestic product purchase
                                                              • Figure 43: Attitudes towards premiumisation of domestic products, February 2020
                                                            • Patriotic sentiments increasingly rise during the outbreak of COVID-19
                                                              • Figure 44: Life values, April 2020
                                                            • Affluent consumers show stronger sense of local identity
                                                              • Figure 45: Attitudes towards premiumisation of domestic products, by income level, February 2020
                                                            • Originality matters among younger generation
                                                              • Figure 46: Attitudes towards premiumisation of domestic products, by generation, February 2020
                                                          • Meet the Mintropolitans

                                                            • Acceptance of premium domestic brands among MinTs much higher than non-MinTs
                                                              • Figure 47: Purchase of premium domestic products, by consumer classification, February 2020
                                                            • Social responsibility influences purchase decisions of MinTs
                                                              • Figure 48: Marketing of premiumisation, by consumer classification, February 2020
                                                            • MinTs feel strong emotional connection with premium domestic brands
                                                              • Figure 49: Attitudes towards domestic products, by consumer classification, February 2020
                                                          • Appendix – Methodology and Abbreviations

                                                            • Methodology
                                                              • Abbreviations

                                                              About the report

                                                              This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                              • The Consumer

                                                                What They Want. Why They Want It.

                                                              • The Competitors

                                                                Who’s Winning. How To Stay Ahead.

                                                              • The Market

                                                                Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                              • The Innovations

                                                                New Ideas. New Products. New Potential.

                                                              • The Opportunities

                                                                Where The White Space Is. How To Make It Yours.

                                                              • The Trends

                                                                What’s Shaping Demand – Today And Tomorrow.

                                                              Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

                                                              Description