Show Notes
Topics Discussed and Key Points:
● What brands can do if they want to succeed in China among the millennial and Gen-Z cohort
● Major events that have impacted Chinese millennials similar to the Great Recession in the U.S.
● What are the differences between millennials who grew up in the Mainland and those who studied abroad?
● How prevalent is conspicuous consumption in the life of the average 25-to-30-year-old Chinese individual?
● What makes a good brand in China?
● How environmentally conscious and focused on diversity and inclusion are Chinese millennials?
Episode Summary:
Today on The Negotiation, we continue our conversation with Zak Dychtwald, Founder and CEO of Young China Group, a think tank and consultancy with a focus on the emerging influence of China’s millennial generation on the marketplace, workplace, and international politics.
Asked about what separates the winning foreign brands from the rest of the pack when it comes to finding millennial and Gen-Z fans in China, Zak says that it comes down to “empowering your local Chinese team to drive strategy.”
However, the difficult task for local teams when working with multinationals is that they will almost always work slower than native Chinese teams with native Chinese executives who understand, intuitively, what the Chinese market looks like.
Another point is to “stop creating products and thinking about marketing to Tier 1 cities.” Trends do not necessarily trickle down from Beijing or Shanghai to Hangzhou or Chongqin. Recognizing trends that do not originate in Tier 1 cities will give a company a head-start over other global brands whose thinking is still mired in that Shanghai bubble.
Zak goes on to peel back the curtain into the mind of the Chinese youth, from how a restructured education system in the post-Tiananmen era divided generations around how they perceive history, to how the 2008 Beijing Olympics created a newfound sense of national pride and modernization for China, and finally to how Xi Jinping’s anti-corruption campaign in 2012 served as a huge pivot towards meritocracy for the whole country.
He then explains why Chinese students who study abroad now have greater incentives to return to China after graduating; why conspicuous consumption has moved from a need to look wealthy to a need to develop an identity; and current attitudes toward environmental friendliness, diversity, and inclusion.
Key Quotes:
“Empower the heck out of your local China team and do it so that they can be fast enough to compete with local brands.”
“The problem with the city tier visual is we imagine trends cascading downwards from Tier 1. [...] That’s not necessarily the case, and I think it’s a little bit of linguistic determinism. I think that’s the fault of the tiered idea.”
“[Conspicuous consumption back then] was a way to posture, particularly around the wealthy class. What you have now is conspicuous consumption oriented toward brand tribes and identity.”
“A lot of our definitions of what it means to be ‘Chinese’, even within China, are based on the past. No longer. This generation is deciding what it means to be Chinese in modernity and going into the future.”