This document discusses how success is viewed in China and how that is changing across generations. Traditionally, success was seen as being determined by factors like family background, money and connections ("guanxi"). However, the study found that while hard work was still the top factor for success, money, family background and connections were also highly important. Younger generations, especially those in tier 1 cities, place less emphasis on these traditional factors and more on personal achievements like education, intelligence, mindset and integrity. So the view of success in China is evolving from being based on who you are to also incorporating what you achieve through your own efforts.

2. THE PEOPLE’S
REPUBLIC
OF CHANGE

3. FOREWORD
China’s story of metamorphosis has captured
the imagination of the world. In past 15 years,
an ascendant China has seen their middle class
explode, poverty rates decline considerably,
technology flourish and their local brands move
from laggards to leaders. China’s narrative is now
changing. Its story is no longer just about boom
years, but rather a maturing society whose
successes are breeding new tensions: income
inequality, a slowing economy, an aging population,
and pollution.
OMD set out to understand the rapid
transformations changing the country and its
people through our new study: The Future of China.
We spoke to more than 2,500 people and
uncovered profound insights into their hopes,
fears, and dreams.
While change has altered every part of life in China,
perhaps the most tectonic shift has been the speed
of digitalization. With 564 million Internet users and
420 million Mobile Internet users, China has swiftly
tumbled into the digital age. E-Commerce already
accounts for one-quarter of discretionary spending;
for those born after 1990, it is 39%. Chinese
consumers not only embrace innovation, they
demand it. Local brands have risen to the challenge
by iterating products, consistently releasing new
functionality for sites and services and continuously
refining their offerings.
However, these breakneck changes have revealed
new anxieties. Health, work, housing prices: all
these contribute to the sense that Chinese people
are consistently catching up with their peers. For
many, contentment is still tied to material
possessions and traditional goals, making
happiness an elusive goal.
There are signs this is changing. A growing number of
Chinese young people are breaking with tradition
and thinking differently about happiness, wealth and
success, all while grappling with what it means to be
“Chinese.” For them, the car, the house,
the career, no longer define their identities.
The future is unpredictable. A phantom. A wisp
of an idea. However, with The Future of China,
we have a strong sense of where things will head.
China has gone through two decades of brisk
transformation and the next ten years looks to
be just as transformative. Of course, the people
of China have already proven they are not only
resilient to change but embrace it with open arms
despite their anxiety.
Jeanette Phang,
Director,
Business Intellegence

4. IN-DEPTH HOME INTERVIEWS
We conducted 16 face-to-face home interviews
across 4 city tiers and 4 generations to get a
deep understanding of consumers’ outlook for the future.
CITIES COVERED
Shanghai, Wuhan, Quanzhou, Yichuan
QUANTITATIVE SURVEY
Working with IFOP, our quantitative research included
surveys of 2,500 consumers in 8 cities (Tier 1-4)
from all age groups, millennials to greys.
CITIES COVERED
Beijing, Shanghai, Wuhan, Shenyang,
Quanzhou, Guiyang, Luzhai, Yichuan
06 ANXIETY SOCIETY
Despite quality-of-life improvements, Chinese people remain
deeply anxious about basic day-to-day issues.
10 THE HAPPINESS PARADOX
As goal posts shift, happiness is becoming an unattainable goal
for many Chinese people.
16 INHERITING SUCCESS
Success in China is still influenced by who you are rather than
what you do. But younger generations are challenging this idea.
22 THE NEXT PRESTIGE
What’s the new currency for status and prestige in China? It’s not
cars, big house or luxury bags. Welcome to the new age of luxury
experiences.
28 CITIZEN E-COMMERCE
E-commerce is a key part of everyday life in China, and is changing
how consumers buy, what they buy, and how businesses are run.
32 MADE IN CHINA 2.0
No longer satisfied with being copy cats, local Chinese companies
are innovating at a breakneck rate, creating a new threat to MNCs.
38 VOICES ACROSS THE GENERATIONS
Meet real Chinese consumers from post 60’s to post 90’s.
CONTENT

5. ANXIETY SOCIETY
This unease goes hand in hand with the changes
that China has undergone in the past decade.
In short: the more change experienced, the more
stressed. Constant adaptation to new normals and
new regulations have left people with little sense
of security. There is also a pervasive fear of falling
behind inside a swiftly changing environment.
% PEOPLE WHO
BELIEVE THERE
HAS BEEN A LOT OF
CHANGE AND
HOW STRESSED
THEY FEEL
Walk on any street in China and you are likely to
experience this: cars honking, impatient drivers
changing lines every 10 seconds, pedestrians
walking into traffic, electric bikes nearly hitting
people, and countless quarrels over the smallest
issues. Experience this, and you get a sense of the
tension and anxiety pervading China. No surprise
that of the Chinese consumers we interviewed,
45% feel stressed — an inevitable emotional
byproduct of China’s rapid growth.
Stress scale from 0-10, 0 being not stressed at all and 10
extremely stressed
Source: Future of China
CHANGE STRESS
50 —
60 —
70 —
80 —
— 5
— 6
— 7
— 8
Tier 1 Tier 2 Tier 3 Tier 4
TOP CONCERNS
Source: Future of China
What drives stress in China is still the fulfilment
day-to-day life worries: health, work pressure,
and housing prices dominate the minds of people
across all tiers. Living costs and pollution are also
significant concerns. Though China’s GDP has more
than tripled in the past ten years, social resource
scarcity has not been resolved but exacerbated.
People compete intensively for limited hospital
beds, school seats, jobs and even seats on
public transport.

6. Of those surveyed, health is the number one concern
— 50% worried about pollution, and 55% were
concerned about food safety.
More and more Chinese people are proactively taking
action to protect their wellbeing. By the end of 2015,
the air purifier market was expected to reach
RMB 75 billion; time spent on health and fitness
apps doubled in the first six months of 20151
. 20% of
Tier 1 respondents prefer buying organic products,
and 43% of Chinese consumers check manufacturing
dates before purchasing products.
1. http://technode.com/2014/12/09/internet-companies-air-purifier/ , http://www.slideshare.net/ssuserf0a14c/trend-review-of-chinas-
mobile-internet-industry-in-2015
CONCERN VS ACTION TAKEN TO
LESSEN THE EFFECT OF POLLUTION
CONCERNED ABOUT
POLLUTION
TAKE ACTION
AGAINST POLLUTION
TIER 1
58%
77%
45%
75%
TIER 2
TIER 3
23%
56%
36%
76%
TIER 4
These behaviors are especially common in top
tier cities where consumers have higher levels of
education and disposable income. In fact, people
in Tier 1 are 1.7 times more likely to take action
against pollution than the rest of China.
With health being at the forefront of concerns for
China the next year will see an explosion in innovation
in the health sector: whether it is technology to
control pollution, solutions to manage individual
health or products to help save for medical
inevitabilities. Everyone wants a salve for his or
her worries. Brands and companies that can
assuage fears will solidify their positions in our
anxiety driven world.

7. THE
HAPPINESS
PARADOX
While middle-aged Chinese people still remember
the Great Chinese Famine of the early-1960s, their
daughters and sons are more accustomed to excess
than deficiency. Despite drastic changes in living
standards, there hasn’t been a corresponding drastic
increase in happiness. It is clear that in China,
contentment is still very much linked to the
attainment of physical and traditional goals.
The Future of China
found that good
personal and family
health is the number
one factor influencing
happiness (78%),
followed by career
success (40%) and
money (40%).
40%CAREER
SUCCESS
40%MONEY
78%GOOD
HEALTH
40%CAREER
SUCCESS
40%MONEY
78%GOOD
HEALTH
40%CAREER
SUCCESS
40%MONEY
78%GOOD
HEALTH

8. SOURCES OF HAPPINESS
Source: Future of China
1.IMF
2.Happiness: A History, Darrin M. McMahon
For most people, the factors that govern their
happiness are readily achievable. With GDP growing
by 140 times in the past 10-15 years, life expectancy
increasing by 3.2 years, single child policies lifted,
why then is happiness such a struggle1
?
GDP
LIFE
EXPECTANCY
IN THE PAST 10-15 YEARS
140
TIMES
3.2
YEARS
In modern China, tensions exist between
traditional signals of contentment and actual factors
of happiness. There is an assumption that happiness
is a calculus of pleasure: deduct pain, multiply joy
and you’ll be happy.
Psychologists have shown that better jobs, more
money, and bigger homes only bring momentary
happiness2
. The crux of the issue for future
generations of China is balancing the attainment
of practical happiness that are socially acceptable
with the pursuit of fewer material things.
Changqing Wang,
Male, 22, Quanzhou
“I don’t think I am someone who pursues
material things. I want to have my own child, and
have a happy family. That’s enough. Also enough
money to spend, that’s OK. I am not going to keep up
with the Joneses. Based on what is happening now,
I just need 100,000 to 200,000 a year. I’ll even be
able to save. What I mean is, if you are rich then live
like a rich man, but if you don’t have money just
live according to your means — you won’t die.
There is not much difference between having
money or not having money, I guess you just live
slightly better.”
“Happiness in my life means my husband
cares about me. At my age, I can say everything
is quite good, we have enough money, and you
can never earn ‘enough’ anyway. During times
when you don’t have enough, just hang on and
it will pass. A fulfilled life isn’t bought. You have
to rely on your hard work to achieve it.”
Weiming Chen,
Female, 30, Quanzhou
GOOD
HEALTH
FOR THE
FAMILY
78%
CAREER
SUCCESS
40%
MONEY
39%
HAVING
A CHILD
27%
DOING
WHAT
I LIKE
24%
STABLE
LIFE
22%
WITH
PEOPLE
WHO
I LOVE
18%
HAVING
MANY
FRIENDS
17%
GOOD
PARENTS
12%
ENOUGH
SLEEP
6%
MENTAL
PEACE
5%
GOOD
LUCK
5%
GOOD
FIGURE
4%
A
BEAUTIFUL
FACE
2%
MEETING
MY IDOL
1%

9. Highlighted items have an Index over 100
HAVING A GOOD FIGURE
ENOUGH SLEEP
GOOD PARENTS
GOOD LUCK
MEETING MY IDOL
STABLE LIFE
MONEY
HAVING A CHILD
GOOD HEALTH FOR
THE FAMILY
SUCCESS OF MY CAREER
HAVING MANY FRIENDS
DOING WHAT I LIKE
A BEAUTIFUL FACE
WITH PEOPLE WHO I LOVE
MENTAL PEACE
5 3 4 3
5 5 6 8
16 15 8 9
5 5 5 5
1 0 0 1
18 19 22 27
37 36 40 43
13 28 35 31
76 76 77 81
44 46 41 32
25 15 16 13
33 24 20 20
3 2 1 2
17 20 18 18
4 4 5 8
SOURCES OF HAPPINESS BY GENERATION (%) For younger generations
— especially those born
after China’s explosive
growth and reinvention
— there is a shift away
from the traditional
focus on money, health,
and children.
Moreover, while career and money remain relevant
goals, self-worth for those born after 1990 is more
independent of finances and professional status
compared to older generations.
As the post-90s generation fully embraces non-
materialism, China’s happiness index is
likely to improve. As this generation become the
leaders, workers and consumers of China’s future,
the country’s overall goals may continue to evolve
beyond consumerism.
If material things and traditional signals no longer
dictate happiness, then brands that have pushed
aspirational, product-led strategies will struggle
to be relevant. Brands will need to work at fostering
emotional links beyond product features, create
opportunities for people build better connections
with their core social groups and provide consumers
a sense of brand ownership.
Source: Future of China

10. 28%
LUCK
HARD WORK
66% 27%
INTEGRITY
47%
FAMILY BACKGROUND
24%
IQ
41%
EDUCATION BACKGROUND
17%
EQ
49%
MONEY
26%
EXPERIENCE
42%
CONNECTIONS/GUANXI
19%
MINDSET
The old Chinese saying goes like this: the Dragon
gives birth to a Dragon, and the Phoenix gives birth
to a Phoenix. People of China have always believed
that one’s success is largely determined by who he
or she is. In modern China, this adage still seems
to stand. Our study revealed that even though hard
work (66%) was the number one reason for success,
right behind it was: money (49%), family background
(46%), and connections (42%). Clearly in China,
who you are still matters.
WHAT CONTRIBUTES TO SUCCESS
INHERITING
SUCCESS
Source: Future of China
China is still a society where people are deeply
interconnected, and a network of mutually beneficial
relationships are essential for personal and business
success. In a fiercely competitive society such as
China, lacking a helping hand from your societal
connections means success is much harder to attain.
These relationships are difficult to acquire if
you do not already have them. This cycle is self-
perpetuating: to build a network, you need resources
that others want. Challenging to achieve when you
do not have money, the right family background
and education from a top tier school — all of which
need the right guanxi.

11. MONEY
EDUCATION BACKGROUND
HARD WORK
FAMILY BACKGROUND
CONNECTIONS / GUANXI
IQ
EQ
LUCK
MINDSET
INTEGRITY
EXPERIENCE
TIER 1
93
131
95
93
110
129
164
143
147
105
91
TIER 2
135
110
99
117
85
84
84
73
63
68
80
TIER 3
87
77
104
95
102
91
70
88
91
113
115
Source: Future of China
FACTORS OF SUCCESS BY CITY TIER (INDEX)
“Success to me is having certain social
status and social capital. It’s more about
being recognized by people around you
rather than having a certain amount
of money. For myself, I hope that I can
successfully run a company and have the
respect of other people.”
Lifeng Yang,
Male, 32, Wuhan
However, findings from our study suggest that this
reliance on social capital is changing. In Tier 1 cities,
for example, where traditional bonds of society are
less intimate, success requires more than guanxi —
education, IQ, EQ, luck, your mindset, and integrity
all play a part. In Tier 1 to be truly outstanding,
you have to outperform your peers in almost all social
and personal aspects. Perhaps, also, why people in
Tier 1 are so stressed.
Generational expectations also impact perceptions
of success. Chinese born in the 1960s and 1970s
are more likely to tie success to the ‘who you are’
factors of money and connections, as well as the
‘what you do’ elements of integrity and experience.
Those born in the 1980s and 1990s, however,
are less likely to have faith in family backgrounds
and connections. They possess more of a ‘can do’
attitude and assign greater importance to personal
achievements — IQ, EQ, education, the right mindset.
Highlighted items have an Index over 100

12. MONEY
EDUCATION
BACKGROUND
HARD WORK
FAMILY
BACKGROUND
CONNECTIONS
/ GUANXI
IQ
EQ
LUCK
MINDSET
INTEGRITY
EXPERIENCE
POST
90’S
90
115
105
95
94
102
122
95
109
91
98
POST
80’S
98
91
101
95
100
102
105
103
99
98
96
POST
70’S
104
93
99
108
103
111
94
102
102
96
103
POST
60’S
108
100
95
102
103
87
80
101
91
113
103
Source: Future of China
FACTORS OF SUCCESS BY GENERATION (INDEX) It would be premature to say that ‘who you are’ no
longer impacts success in China. More realistically,
it is not be all and end of success. Moreover, in
the China of tomorrow, it may matter even less.
The younger generation is more likely to be self-
reliant and less connected to the wider community,
contributing to a greater sense of meritocracy.
Brands’ communications must embrace this new
view of success, showcasing the personal merits
and hard work as signifiers of success.
“I think guanxi is utilitarian but essential.
It means that I will offer you something
beneficial and you will give something back
in return, like a favor exchange. Building
connections with people are important to
your standing in society. Having one more
friend is always good for you.”
Ke Xu,
Female, 21, Wuhan
Highlighted items have an Index over 100

13. THE NEXT
PRESTIGE
The status of a Chinese person is still predominantly
determined by what he owns. Not surprisingly, The
Future of China discovered luxury cars (66%), and big
houses (66%) remain the ultimate status symbols.
These items are so societally important that across
China without either a car or home, a man can
struggle to find a wife.
The thirst for automobiles and property has fueled
the continued growth in the luxury auto market and
rising real estate prices. Despite the slowing Chinese
economy, SUV unit sales in the first half of 2015
surged 48% compared to the same time in 20141
.
New home prices in Beijing and Shanghai
are up by 6.5% and 10.9% from 20142
.
1.http://autonews.gasgoo.com/commentary/summary-chinese-suv-market-from-january-to-june-o-150720.shtml
2.http://www.reuters.com/article/2015/11/18/china-economy-realestate-idUSENNFB30ST20151118#0dV4mRsYFHmxYySv.97
41%LUXURY
PRODUCTS
66%LUXURY
HOUSE
66%LUXURY
CAR
41%LUXURY
PRODUCTS
66%LUXURY
HOUSE
66%LUXURY
CAR
41%LUXURY
PRODUCTS
66%LUXURY
HOUSE
66%LUXURY
CAR

14. ATTITUDES TOWARDS PEOPLE
WHO OWN LUXURY GOODS BY TIER
The market in China for luxury brands remains so
sizeable that when the Chinese stock market
tumbles, so does the global sales of brands such
as LVMH and Burberry. Despite the government
crackdown on corruption and excessive spending the
majority of Chinese consumers continue to express
positive feelings towards luxury goods. While 27% of
respondents have negative feelings toward people
who use luxury items to show off, 36% say luxury
brands are a good look, reinforcing these products as
potent signifiers of wealth and prestige.
Tier 2 consumers are even more focused on keeping
up with the Joneses, with 27% wanting to own luxury
goods when they see someone else having them. By
contrast, consumers in lower tier cities were much
more concerned about practicality; luxury products
are often not noticed in these markets.
60
50
40
30
20
10
0
60%
%
50
40
30
20
10
0
HE / SHE
IS RICH
HE / SHE JUST
WANTS TO
SHOWOFF
I WANT
SOMETHING
SIMILAR
IT’S PROBABLY
FAKE
IT’S STUPID
TO BUY SOMETHING
THAT EXPENSIVE
IT LOOKS
GOOD
I DON’T
NOTICE IT
TIER 1
TIER 2
TIER 3
TIER 4
Source: Future of China

15. The reign of material luxury may soon be at an end.
For the many people under 30 we spoke to, physical
appearances, digital products, and social attention
were far more important signifiers of their social
status. For them, wealth and status mean more
than materialism.
Mirroring the West, the new social currency in
China is experiences. Unique experiences already
fuel social media — travel videos, parties, selfies, live
Source: Future of China
OVERALL
PERCENTAGE
%
PEOPLE
UNDER 30
INDEX
PEOPLE
OVER 30
INDEX
LUXURY PRODUCT
(E.G.BAGS,WATCH,
CLOTHING ETC.)
103 9841
LUXURY CARS 99 10066
A BEAUTIFUL/
HANDSOME PARTNER 126 8310
A HUGE HOUSE 96 10366
TRENDY DIGITAL
PRODUCT 116 8914
EXPENSIVE JEWELRY 91 10620
SOCIAL ATTENTION 117 8910
OVERALL
PERCENTAGE
%
PEOPLE
UNDER 30
INDEX
PEOPLE
OVER 30
INDEX
LUXURY PRODUCT
(E.G.BAGS,WATCH,
CLOTHING ETC.)
103 9841
LUXURY CARS 99 10066
A BEAUTIFUL/
HANDSOME PARTNER 126 8310
A HUGE HOUSE 96 10366
TRENDY DIGITAL
PRODUCT 116 8914
EXPENSIVE JEWELRY 91 10620
SOCIAL ATTENTION 117 8910
TOP STATUS SYMBOLS
1.http://socialbrandwatch.com/6-reasons-why-rich-chinese-should-go-to-burning-man/
broadcasts; people love the social attention
these bring. Consequently for the wealthy in China,
owning luxury products is no longer enough.
Like their Western counterparts, they too want
adventures to set themselves apart from their peers.
Last year at Burning Man — an alternative culture
festival in Nevada, USA — a Chinese billionaire
complained that there were too many people
there for her to post any unique contend
on WeChat1
.
Chinese materialism is here to stay, but the idea
of ‘prestige’ is evolving. The car, the house?
Those still matter. However, for brands to succeed,
they need to give consumers unique, ‘show-off’
experiences. Brands need to offer opportunities
to build social currency. Status — for the Chinese
consumer — remains one of the most compelling
reasons to buy in Chinese society.
For luxury and aspirational brands, future growth will
come from Tier 2 cities, where people have the
strongest sense of ‘I also want that’. Meanwhile,
to cater to the more sophisticated Tier 1 consumers,
brands should offer exclusive holistic luxury
experiences to make customers feel truly special.
Whether it is learning from experts at the L’Ecole Van
Cleef & Arpels on how to sketch designs, identify
gemstones, polish gold or set a stone, or traveling
to South America to see vicuna and production of
highest quality cashmere, luxury experiences are
becoming the new status for the wealthy in China.
With an evolving perspective of what denotes wealth,
brands need to find more ways to make consumers
feel ‘rich.’ Companies that keep social currency in
mind have a better chance of staying meaningful
and relevant.

16. 27 37 25 30 16
TOTAL T1 T2 T3 T4
POST 90’S POST 80’S POST 70’S POST 60’S
32 24 1539
% OF ONLINE SPENDING OF
TOTAL SPENDING - BY GENERATION
% OF ONLINE SPENDING OF
TOTAL SPENDING - BY TIER
The simple fact is that e-commerce platforms
have reshaped the way Chinese people shop.
Using smartphones, consumers can buy anytime,
anywhere. Chinese consumers now have access
to more products than ever and are supposedly
saving time shopping from their devices rather
than in retail outlets.
The Future of China found that online shopping
in China accounts for 27% of total spending (vs.
10.1% in APAC and 7.3% globally1
). This number
1.eMarketer
Source: Future of China
rises to 37% in Tier 1 cities and 39% amongst
Post-90’s. Also, savers are finding online bargains:
at least 1/3rd of respondents who saved significant
amounts of their income spend 50% or more of
their money online.
Online shopping, though, is not without its flaws.
Consumers know that the trade off for convenience
and discounts is the possibility of fake goods or
mismatched expectations.
CITIZEN
E-COMMERCE

17. Yongliang Wu,
Male, 35, Shanghai
“I usually online shop about twice a week.
I will buy shoes and electronic products online.
I’ve now started to buy more expensive electronic
products online. Online shopping is playing an
increasingly important role in my life. Compared to
the offline stores, online shopping is cheaper and
I don’t have to waste so much time…But online
shopping also has its weakness, like fake products
or having to return products…The influence of
online shopping on our society is really immense,
so many offline stores are now closed, our own
offline shop is going to close soon.
The growth of online shopping has changed my life
a lot. For business owners, your pricing has to be
transparent, everyone knows the price and you can’t
have margins that are too high. Now, my business is
reliant on old customers introducing new customers.
My customer service has to be better than other
people, I am relying on this: that my service
is better than others.”
“Most of my stuff has been bought online. I purchase
things online several times a week. I would say on
average, I will buy something online every week.
Things like my TV I will go to Suning or the Jindong
mall to check it out in real life and then buy it online.
Online shopping means I am not limited by my
location. For example in Quanzhou, we only have
styles that we see, but online I can get clothes
from Korea, Hong Kong, and everywhere. I get to buy
whatever I want, but the only problem is that I can’t
try the clothes.
I usually use Taobao, Tmall, Jingdong...I don’t like
products that are poor quality, so I like buying on
Tmall. Most of my products I buy on Tmall, because
Taobao has fake goods…I buy stuff online from my
PC or mobile. All my cosmetics are bought online,
actually, I used to buy cosmetics online very regularly.
But I don’t really use make-up, but I’ll still go online
once in a while to buy some. If we talk about skincare
and the like, on Taobao there seems to be
a lot more fake goods now.”
Weiming Chen,
Female, 30, Quanzhou
Outside of selling products, services are increasingly
being processed and bought online. We are only at
the nascent stage of O2O service e-commerce. In
2014, investment in O2O related transactions made
by Chinese-listed companies totaled US$4.8 billion,
including Alibaba’s acquisition of AutoNavi and
Tencent’s investment in cab booking APP Didi Taxi1
.
Apps like ‘24Tidy’ allow users to make an
appointment online for home-delivered laundry
service or ‘AnHao’ where users can consult a
community doctor about any discomfort or illness,
and make an online reservation at a nearby
hospital. Already, 46% of us book door-to-door
services online, and we expect this number to grow
rapidly and expansively in the next year2
.
E-commerce is already an important retail channel for
brands, allowing them to reach consumers anytime,
anywhere. More importantly, it is changing
consumers’ thoughts and expectations: they are
beginning to think of goods and services in digital
terms. Consumers now have greater expectations of
quality and convenience when it comes to service. In
top-tier cities — where service e-commerce has the
highest penetration and time is the most precious —
will be driving the e-commerce evolution.
An e-commerce strategy is crucial to winning in
today’s market, purely being present
is far from enough. Brands can help ensure sales by
leveraging their media resources and search engine
optimization on e-commerce sites. With increasing
share of wallet going online, brands need to think of
innovative ways of fulfilling consumers’ needs.
1. Credit Suiss: China Internet sector O2O report 2015
2. Mintel China Consumer Trends 2016

18. In the past decade, China has undergone the
transformation from imitator to innovator. They’ve led
patent filings globally for the previous three years and
are set to outspend the US on R&D for the first time
in 20191
. This push for innovation comes from two
ends: the government and consumers. The Chinese
government has provided incentives to Chinese
companies filing patents hoping to find new growth
drivers through technology. And Chinese consumers
continue to have a relentless appetite for new
products, new brands, new communications, new
media, new technology.
Local Chinese brands are leading this innovation
revolution by focusing on business results and
emphasis on consumer needs. In one of the world’s
biggest and most dynamic consumer markets, local
companies are always tweaking and adapting new
technology and products to meet the needs of their
customers. New business models are continuously
being launched and tested based on user feedback.
As a result, unique Chinese goods and services are
created to solve specific, localized consumer
problems.
MADE IN
CHINA 2.0
1. http://www.theguardian.com/business/economics-blog/2014/nov/12/china-surpass-united-states-r-and-d-spending-role-west

19. PREFERENCE OF DOMESTIC
VS FOREIGN BRANDS
40%I relatively prefer
domestic brands,
the quality is getting
better
25%I always buy
domestic brands,
the quality is good
20%I relatively prefer
foreign brands
9%I always buy foreign
brands, the quality
is much better
6%
I always buy
domestic brands,
there are no foreign
brands available
ATTITUDE BY CITY TIER (%)
5
18
48
16
13
T3
3
22
33
32
10
T2
4
18
40
25
13
T1
6
25
40
20
9
TOTAL
10
42
39
8
T4
1
I always buy
domestic brands,
there are no foreign
brands available
I always buy
domestic brands,
the quality is good
I relatively prefer
foreign brands
I always buy foreign
brands, the quality is
much better
I relatively prefer
domestic brands,
the quality is
getting better
This focus on meeting customer needs has led to a
shift in how consumers perceive local brands. 20%
of the people we talked to always chose domestic
brands because they believe in the quality of their
products. Another 40% prefer local brands and agree
that product quality is getting better. This means that
the majority of Chinese consumers are not only ready
to purchase local but prefer to do so.
Preference does shift across different city tiers. In Tier
3 and 4 markets where many foreign brands either
lack presence, awareness or distribution, domestic
bands have absolute dominance. Interestingly,
it is Tier 2 cities that show the highest preference for
international brands. As foreign companies expand
their marketing and distribution footprint, consumers
are exposed to a large number of new brands and are
attracted by their novelty. Tier 1 consumers, who
experienced this influx of foreign products years ago,
are more discerning and no longer blindly buy into the
aspirational dream so many international brands seem
to sell — we can only expect other cities to follow
this trend.
Source: Future of China Source: Future of China

20. PREFERENCE OF DOMESTIC
VS FOREIGN BRANDS BY CATEGORY
19%
39%
15%
33%
16%
32%
14%
25%
10%
24%
12%
23%
9%
12%
7%
9%
3%
8%
8%
7%
2%
2%
1%
2%
Domestic
Foreign
GENERIC BABY PRODUCTS
AUTOMOBILE
PREMIUM SKINCARE
TOYS FOR CHILDREN
COSMETICS
FAST FASHION
ENERGY DRINK
HOME APPLIANCES
MASS SKINCARE
BODY WASH
DAIRY PRODUCTS
QUICK SERVICE RESTAURANT
Source: Future of China
Preference for local brands transcends almost
all product categories. In mass categories like
quick service restaurants, body wash, and home
appliances, this inclination towards local brands
is close to two times stronger than for their foreign
counterparts.
The age of blindly buying foreign products is over.
Today, categories where foreign brands still
dominate are limited to the luxury categories like
premium skincare. This buy-local trend has caused
foreign brands to lose market share in many
categories. Core FMCG products like laundry and
skincare have seen years of explosive growth
begin to subside.
Chinese brands are not only winning at home;
they are winning globally. Xiaomi, Haier, and
Alibaba started their journey as “value” brands,
but they’ve moved on. Let’s not forget that
Sony and Samsung were once too “challenger
brands” with perceived substandard products.
To maintain growth under economic, market and
consumer pressures, foreign brands must rapidly
adapt and evolve their brands and products
to suit shifting consumer desires. The struggle
for many multinational behemoths, though, will
be to implement — like their Chinese counterparts
— nimble structures and processes to respond
quickly to changes. Korean beauty brands have
seen continued success in China due to their
obsession with creating new and innovative products.
For consumers, the heating up of competition for
their RMBs from both domestic and international
players can only mean good things — better quality
products from local brands and more locally
customized creations from foreign brands.
Local brands cannot rest on their laurels. A large
number of Chinese brands still rely on low pricing
as their main selling point, which is not sustainable
in the long term. As Chinese consumers become
more and more discerning, domestic companies
will need to invest in building their brands to
compete beyond pricing.
Despite gains in innovation and local consumer
spending, Chinese brands still struggle to not only
differentiate themselves domestically but prove
themselves globally. Their short-term focus is to
maximize profit by delivering on consumers needs.
Many Chinese companies still rely on mimicry of
global tech companies for cutting edge innovation.
Without long-term investment into technological
innovation for innovation’s sake, it may be some time
before China produces a cutting-edge product that
the world has never seen.
http://www.nielsen.com/hk/en/press-room/2015/six_out_of_ten_korean_beauty_brands_shoppers_consider_korean_
products_as_innovative_and_adapted_to_their_skin.html

21. VOICES ACROSS
THE GENERATIONS

22. ““
““
21-year-old Ke Xu lives with her parents
in Wuhan. As a 3rd year student in
Huazhong University of Science and
Technology, she spends most of her
spare time going shopping, trying out
new restaurants and exercising.
She does not particularly enjoy sports,
but she plays badminton every Saturday
to stay in shape. Ke is not quite sure
what the future holds for her.
But she thinks about the possibilities:
opening a Taobao shop, joining the
marketing team of a big company,
or being a simultaneous interpreter.
Ke’s parents want the best for their
daughter, but they are leaving the final
choice to her. Her main goal at the
moment is to pass the College English
Test Band 4.
I majored in e-commerce because the Internet is
becoming so indispensable to almost every
aspect of our lives. I think e-commerce will be
where future growth comes from. I hope I will be
working in related fields after graduating. I also
think English is also very important. Buying
imported goods, traveling abroad, surfing the
Internet all require one to speak English. If I
learn English well, I want to become a
simultaneous interpreter.
— Ke Xu
MORE VOICES
I feel that I do not have too much trouble or worries. When I finish my
college entrance exam and have fun with friends that I haven’t seen for
a long time, I feel truly happy. Also, when I learned that I would have
time to play drums after working full-time, I was really happy as well.
— Sijia Li (18), Yi Chuan
I like to collect figurines from Japanese manga such as One Piece and
Fairy Tail. The limited editions are really hard to find. I usually buy them
through online auctions or from offline stores in big cities. I also like
playing video games with my friends. We sometimes organize team
competitions. It’s really fun!
— Changqing Wang (20), Quanzhou
90’S
ONLINE
SPENDING
THEIR
SAVINGS RATE
FOR MARRIAGE
THEIR WANTS
THEIR WORRIES
FINANCIAL GOALS
REASONS FOR SAVING
FINANCIALS
PURSUE ADVANCED STUDIES
TO TRAVEL
SALARY
INCREASE
64%
3.3YEARS TO
ACHIEVE IT
15%
39%
POST 90’S
♦ Doing what I like
♦ I like to be surrounded by friends
♦ I want to look good
♦ I need career success to prove myself
♦ It’s difficult to manage
work-life balance
♦ My job/school is giving me lots
of pressure
♦ Living cost is high
♦ Heavy pollution is affecting my health

23. “
“
“
“
In her early 30’s, Jiayi is married
and living with her husband in a
two bedroom apartment in Shanghai.
She and her husband have clear
plan and life goals – a bigger house,
a more comfortable life, and a baby.
Two years ago after a surgery,
Jiayi quit her job and became a
fulltime housewife. This was to help
her recover and prepare to have a
baby. With lots of free time, Jiayi
actively participates in a Han
costume ( ) club. In spring when
cherry blossoms bloom, she and her
friends gather in Gucun Park, all
dressed up in colorful Chinese
traditional costumes. When she’s at
home, she is always on WeChat or
browsing Internet, which is her
primary information source.
Technology has helped me to live a better life.
Even though I spend most of my time at home,
I’m still in close contact with my old friends at
work or from school through WeChat. At home,
I have wireless vacuum cleaner, blender, yogurt
machine, which I can use to improve my life with
without much effort. Being a housewife in this
day and age means I am not chained to tedious
housework everyday. When I don’t feel like
cooking, I always order food delivery from
a mobile APP. I want to use my free time to
think and travel, instead of living the way
other people tell me to.
— Jiayi Wang
MORE VOICES
80’S
ONLINE
SPENDING
THEIR
SAVINGS RATE
FOR MARRIAGE
THEIR WANTS
THEIR WORRIES
FINANCIAL GOALS
REASONS FOR SAVING
FINANCIALS
PURSUE ADVANCED STUDIES
SALARY
INCREASE
78%
3.4YEARS TO
ACHIEVE IT
POST 80’S
KID’S EDUCATION
BUY A HOUSE
32%
26%
Working in a logistics company, I always feel a lot of pressure during
weekdays. That’s why when I’m on holiday, I go hiking with my friends
in the mountains to be at ease. I’ve been to Tibet. It was an
unforgettable trip. You can see the most beautiful scenery without any
human touches, like what we used to see when we were children. But
Wuhan now is very polluted. We can no longer see the blue sky.
— Lifeng Yang (33), Wuhan
When I visit friends in small cities, I feel their whole life is planned by
people around them. Other people tell you what you should do in your
20’s and 30’s. If you do not follow that, everybody thinks you are a
loser. For instance, you should buy a house in order to start your
family. This is really sad.
— Weiming Chen (32), Quanzhou
♦ I need career success to prove myself
♦ I like to be surrounded by people I love
♦ I would love to have children
♦ I want to look good
♦ I worry about my child’s education
♦ Housing price is too high to afford
♦ I am stressed in my job
♦ I worry about food security

24. “
“
“
“
Ten years after moving from Huai’an,
a small city in Jiangsu, to Shanghai,
Yongliang (38) finally feels at home
in this mega-city. He is now married
and has a 9-year-old boy. Adapting to
big changes was difficult for him and
most of his post-70 peers. Going
through China’s opening up, property
prices soaring, technology advancing,
Yongliang feels he is always a half a
step behind and a bit lost in all these
changes. After years of working hard
in different jobs, he is now the owner
of a shop selling cellphone-related
products. At the moment, he is also
learning about insurance and trying
to get into that business in the next
few years.
Compared to my hometown, Shanghai offers
more opportunities to people. If one is willing to
make an effort, he can get what he wants in this
big city. With more money in the pocket, you will
definitely get more recognition and respect from
people. In my spare time, I try to learn more about
the overall economy and policy so that I can catch
up the tide. I do not need too much money, but
having 500-600k in the bank and owning an
apartment is necessary in my opinion. I’m still
working hard towards that goal. I also urge
my son to study hard. I hope he’ll have an easier
life than I do.
— Yongliang Wu
MORE VOICES
I send my son to after-school classes because everyone else is doing it.
If he does not go, he will fall behind. Now he’s doing pretty well in class.
His teacher says if he tries, he can get into a very good middle school.
We are also considering the option of sending him abroad for better
education. If he does well in school and would like to study abroad,
we would certainly support him.
— Yan Bi (38), Wuhan
My classmates and I had a discussion about what makes us happy.
During my last reunion with my classmates, I saw a lot of people driving
BMWs or Mercedes Benzes. But I don’t think driving which car has
anything to do with happiness, no matter if its worth 100,000 or
500,000. The pursuit of materialism doesn’t really buy happiness.
I don’t need luxury stuff. Something practical is enough.
— Xuetao Du (37), Yichuan
70’S
ONLINE
SPENDING
THEIR
SAVINGS RATE
THEIR WANTS
THEIR WORRIES
FINANCIAL GOALS
REASONS FOR SAVING
FINANCIALS
SALARY
INCREASE
71%
3.8YEARS TO
ACHIEVE IT
POST 70’S
29%
24%
KID’S EDUCATION
FURTHER INVESTMENT
FOR KID’S MARRIAGE
FOR DISEASE
♦ It is hard to send my child to
a good school
♦ It is hard to manage the relationship
with my children
♦ I am stressed in my job
♦ I worry about my pension
♦ I would love to have children
♦ I want to be rich
♦ I need career success to prove myself
♦ I want a stable life

25. ““
“
“
Born in the 1960s, Yueli (54) is enjoying
her life after retiring from a chemical
factory four years ago. Before her
grandson was born, she liked playing
mahjong with her friends and traveling.
She has visited Hong Kong a few times
and bought a lot of jewelry and clothes.
After the birth of her grandson last year,
Yueli’s started focusing most of her
attention on taking care of him. With
everything she wants already in place,
Yueli has few worries. She thought about
moving to a better apartment, but
hesitated because she does not want
to lose all the neighbors she knows so
well. Now, the only thing on her mind is
her health. She’s enthusiastic about
finding healthy diet tips on WeChat
for herself and the whole family.
After retirement, I feel very relaxed.
Sometimes, my neighbors or friends would
call me and say, let’s go to visit Nongjiale
(restaurant in the countryside). Then we’d go
right away. I enjoy it very much. I also enjoy
seeing my grandson growing up everyday,
from a tiny baby to a small child who can
smile and talk. Of course there are annoying
moments being with the child, but most of
time, it brings happiness.
— Yueli Cheng
MORE VOICES
I feel happy and content with my life. In the past I worried about buying
an apartment, raising children. Now, my first son is already married
and has become independent. My second son will finish college soon.
Within a few years, he will find a job and get married, and all my tasks
will be finished. I worked very hard in the past. Now I feel very relaxed.
My biggest wish is that the whole family stays in good health. My second
wish is that we would always have sufficient money. I can buy whatever
I want without thinking about money.
— Xiuqing Lian (48), Quanzhou
My son works in a logistics company. Even though he didn’t become
a business man or a government official, we still love him. As long as we
all stay safe and healthy, I feel happy.
— Tao Li (47), Wuhan
60’S
ONLINE
SPENDING
THEIR
SAVINGS RATE
THEIR WANTS
THEIR WORRIES
FINANCIAL GOALS
REASONS FOR SAVING
FINANCIALS
SALARY
INCREASE
61%
3.4YEARS TO
ACHIEVE IT
POST 60’S
27%
15%
FOR KID’S MARRIAGE
PENSION
FOR DISEASE
FOR RAINY DAYS
♦ I worry about my pension
♦ Medical insurance bill is high
♦ I am concerned about my
health condition
♦ It is hard to manage the relationship
with my children
♦ I want to have good health
♦ I want to be rich
♦ I need enough sleep everyday
♦ I want to have mental peace

26. It is our belief that research needs to live beyond
just a document: these findings and data exist
to be used, to be discussed and expanded.
This is why the entire Future of China dataset
is available on the desktops of everyone in OMD
China. Not only did we make the data accessible,
but OMD also partnered with Telmar to integrate
our study with one of China’s largest consumer
and media databases — China National Resident
Survey (CNRS). This data fusion provides a new
layer of understanding, allowing us to map media
habits, consumer category usage,
brand awareness to our deep insights,
ensuring the impact of Future of China goes
further than these pages.
We’ve covered a lot, but inevitably there is always
more. If you’d like to find out more about
the research, feel free to reach out.
A project of this scale requires a lot of helping
hands. We’d like to thank Mark Goh, Lynn Ding,
Windy Wang, Yuki Xi, Hellen Yu, Joe Bao,
Robert Paschen, Helen Xie and Yan Xu for
their support.
BHASKER JAISWAL
Managing Partner
Business Intelligence
Bhasker.Jaiswal@omd.com
JEANETTE PHANG
Director
Business Intelligence
Jeanette.Phang@omd.com
RACHEL FAN
Manager
Business Intelligence
Rachel.Fan@omd.com
ENRICHING
FUTURE OF
CHINA
FIND OUT MORE
THANK YOU