Generation Z refers to people born between 1995–2009. According to QuestMobile data, as of November 2020, the number of internet active users of Gen Z after 1995 and 00 has reached 320 million. Generation Z grew up in an era of unprecedented technological change. They were born with the commercialization of the Internet. They are true “the first generation of Internet aborigines”. Since the growth of this group of people is greatly influenced by the Internet, and the economic conditions are generally better than those of their parents, the online consumption of Generation Z presents different characteristics from the previous generations: preference for sociality, daring to try new things, delighting themselves, etc. The philosophy that Generation Z pursues is “everyone is unique and should be accepted.” This is reflected in their way of consumption: Generation Z has very strong individual needs and they have spending power. According to the 2020 statistics of Tencent Licaitong, the average monthly salary of the post-95s generation was almost over 10,000 yuan.
Gen Z and KOL
Generation Z’s initiative in socializing with acquaintances is decreasing and is more inclined to social networking. The majority of their purchase intentions come from sharing of friends and KOL. Social media circles and social culture trigger consumer behavior. Social media and social circles have greatly influenced the purchase decision of Generation Z, making them keener to buy idol endorsements and accept by KOLs, forming a unique “fan economy” phenomenon.
Generation Z does not follow blindly or follow the crowd, but they are willing to follow idols. According to Suning Financial Research Institute’s “Generation Z Group Consumer Trend Research Report”, nearly 20% of Generation Z respondents will buy idol products, and 14.6% are willing to buy the same products of their idols. The report also believes that the idols considered by the Z era are not specifically what we call celebrities, for Gen Z “As long as they have a good vision and personality” they can be followed. Virtual characters included.
Gen Z and Social Media
Generation Z’s access to brand information is becoming more and more “decentralized” (Douyin, Kuaishou, Xiaohongshu, Vlog, etc., not one single channel). These young people receive more information every day than other generations. There are countless Internet celebrities and Vlog bloggers on mobile phones every day telling them how to dress and match, how to make up to look better, and what kind of bags to choose. Therefore, Generation Z will accept new brands quickly.
BiliBili and TapTap have gathered a large number of Gen Z users, thanks also to the huge online entertainment consumer demand of Gen Z. 71.1% of Gen Z people spend more than 3 hours of online entertainment a day, while 61.3% of Gen Z people spend less than 1 hour of offline entertainment. People under the age of 24 account for 78.67% and 40.32% respectively of the users of BiliBili and TapTap, and they are distributed in the first and second-tier coastal areas. As the age of Generation Z grows, and some users of BiliBili and TapTap enter the workplace, the consumption level of Generation Z will further increase.
BiliBili and TapTap meet the Gen Z consumer needs for socializing and self-pleasure.
Social needs: BiliBili and TapTap are currently building a complete social ecology to provide exclusive “circles of interest” for Z-generation users.
Self-pleasure needs: Generation Z is willing to pay a higher premium for interests and enjoy instant happiness. In BiliBili the number of paid members (for dramas) has reached 17.9 million. TapTap has high-quality self-developed and agency games.
Gen Z and Beauty
Compared with other cosmetics, the consumption ratio of Gen Z in base makeup has increased significantly. Professional, safe, and effective skincare are the three major demands of Gen Z skincare in the post-epidemic era. Online social media platforms are the first choice for Gen Z to learn about beauty information, while offline stores attract Gen Z with a strong experience on beauty. The structure of purchasing channels is diversified. Although online shopping is already the main purchasing mode, offline venues drive Gen Z consumption with their irreplaceable experience and social advantages. 62.3% of Gen Z have purchased on e-commerce platforms in the past year, and 57.8% of Gen Z will purchase offline. Product efficacy and ingredients are the primary considerations when purchasing. 75% of Generation Z will share products on social media because of the good user experience. Nearly half of Generation Z will actively share products because of their high-value products.
In small towns, Gen Z still prefers big names. The skincare brands they follow are almost all international big names. However, domestic products have gradually attracted their attention. In the report, 《下沉市场美妆人群细分洞察报告》it is mentioned that among the top 10 makeup brands that women in small towns pay attention to, 4 of them are domestic products.
Gen Z and Fashion
Generation Z is keen to buy trendy brands, also once a month. However, Gen Z is actually more rational in the consumption of fashion brands. They believe that if fashion brands are hyped and their value is overestimated, the product will not be cost-effective. The top five categories with the highest penetration of national fashion brands among post-95s are sneakers, sports down jackets, basketball shoes, sweaters, and casual shoes. As per luxury and light luxury brands, domestic products are preferred of Gen Z. According to “Generation Z Fashion Consumption Insight Report”, the average frequency of Gen Z buying domestic products reached 13.6 times per year, and only 8% of Gen Z have not bought domestic products within a year. To buy fashion products the first three factors Gen Z will consider are cost-effectiveness, unique design, and fabrics.
Gen Z and pets
Gen Z, who pays attention to their own beauty, also takes care of their pets. Nowadays, around the needs of Generation Z, shops that provide tailor-made collars and clothing for pets continue to rise. According to the “2020 Z Generation Consumer Attitudes Insight Report”, consumption in online pet original design stores continues to increase.
Gen Z and cross-border products
Generation Z is the main force of cross-border joint consumption. They account for more than all other intergenerational consumers in the consumption of joint products. The post-90s and post-95s together contribute to more than 70% of sales. Among them, the favorite products of Generation Z are clothing and sports shoes.
Gen Z and Food & Beverage
According to Penguin survey data, food consumption has a central role for Gen Z, because the majority of Gen Z are still in the school life stage and they generally choose to dine in the canteen or at home. 76.4% of the “Gen Z” choose to eat out because of the restaurant’s taste/freshness; the “Gen Z” who eat out are affected by the restaurant’s service attitude. Other important factors are the location, the decoration, and the hygienic environment.
The “2020 Youth Group Drink Consumption Insights” showed the increase in alcohol consumption in 2020 and that the post-90s and post- 95s are the two important consumer groups. Fruit wines and mixed liquors are growing very fast. The drinking concept of young consumer groups is changing, and the alcohol consumption scene is changing rapidly. Drinking and socializing are gradually turning to drink for fun. Tmall data shows that fruit wine and pre-mixed wine are the fastest-growing wine category on Tmall, with a rapid growth of around 300% in 2020. Gen Z in small towns began to pursue quality food. Snacks are still the largest food consumer category for young people in small towns, but in terms of growth rate, the growth rate of fresh food, tea, and healthy meals is much higher than that of people in first- and second-tier cities.
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Sources: "Z世代美妆护肤消费洞察报告", "Z 世代线上消费专题报告", cbndata, 蓝鲸浑水, “Generation Z Fashion Consumption Insight Report”, “2020Z Generation Consumer Attitudes Insight Report”, "2020 Youth Group Drink Consumption Insights", 《下沉市场美妆人群细分洞察报告》