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With a growing middle class in China, consumption patterns are rapidly changing. Bruno Lannes, a partner with Bain’s Consumer Products practice, and Keith Weed, chief marketing & communications officer at Unilever, discuss how technology is affecting consumption in China, as well as consumers’ growing concerns over privacy.
Read the Bain Brief: Future of Consumption in Fast-Growth Consumer Markets—China
BRUNO LANNES: To predict Chinese consumption over the next 10 years, we looked at four major forces. The first two are rather obvious. They are about economic growth and demographics -- easy to forecast, or relatively easy to forecast.
The third one was a lot more complicated, because it has to do with technology and how multiple effects of technology are impacting consumption. And as you know, there are many technologies in play, from artificial intelligence, autonomous vehicles and also augmented reality, virtual reality, 3D printing, etcetera.
And last but not least, we also looked at Chinese characteristics. We looked at Chinese behaviors and attitudes when it comes to consumption and how that could evolve over the next 10 years.
KEITH WEED: I think one of the most exciting things you see in China is the impact of the whole technological revolution. Of course, we see this around the world, and the fact that your consumers are hyper-connected, they are hyper-empowered and they're looking for hyper-convenience. It's seen everywhere.
But what's unique about China? Well firstly, of course, the use of mobile, mobile pay, QR codes. But more profoundly than that, it's the horizontal Z of the big digital companies. And what they have done is joined up the likes of social and e-comm. So they really can get much better data play than we see elsewhere.
And of course, you know, the Googles and the Facebooks aren't in China.
So this leads to a couple of things. Firstly and most importantly, the ability to have personalized offers is much more profound. The leverage of data and how you use data to be able to give real good user experience and to be able to serve customers better. And last but not least, the implication on all that for how companies compete right the way through to the talent they need and the talent pipeline to build.
BRUNO LANNES: So we came up with 10 insights, and they will be too long to summarize here, and I encourage everybody to read the report. But if I can summarize them, there is some very good news around, of course, growth. Consumption is going to grow.
Models of consumption will also evolve. I think we're going to see a lot more, for example, sharing of consumption in the future. It's already starting in China, as you know. We're going to see a lot more convergence between channels, online and offline. We already see that. We're going to see a lot more personalization of products enabled by data.
KEITH WEED: Right now consumers are really happy and excited about all the advances they can get out of data, and all the services they get out of data. But as that builds with smart homes and voice, etcetera, you can see a point where data unintentionally has a negative impact.
And in that, then, the consumers start challenging what is all this data being used for. So we discussed a lot about codes, policies, how can we start really leading for the right way to handle data, so there aren't any unintended consequences. I think, like always, the most important thing to do is to be very close to consumers.
Technology is changing incredibly rapidly. It's the consumer behavior change and attitudes that are driven by that technology change that are much harder to understand. We talk a lot about the technology change, a lot less about the impact on how consumers are changing.
BRUNO LANNES: There are also some questions that still need to be debated. One is, of course, the impact on urbanization and how consumption is going to impact the fact that there's going to be more people moving to large, already very large cities in China.
Other questions, of course, are on data privacy. Data in China is in the hands of an oligopoly. And the way they can interpret this and use that data could be troubling for the society and for the consumers. There are also questions about the environment. And so we are raising all of those issues in our report.
First published in 1월 2018