Forget about generation X, Y or Z - Generation C is your new customer

Generation X, Y (millennials), Z are all characterized by their age group and behaviors. We view them as tech savvy, belonging to a specific work culture and with specific communication-...

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May 16, 2019

Servicing generation C is all about speed

For a country led by a communist party, it is surprising how customer-oriented modern China has become. Private companies in China understand like no other the importance of keeping customers sweet. Chinese customers will switch suppliers faster, not because they are less loyal, but because the other brands are far more competitive to win someone over as a customer. Chinese connected consumers expect instant responses and feedback. Generation C is very impatient.

For example, at CTRIP, the largest online travel platform in China, they promise to pick up the phone within 20 seconds — and it is a promise they keep. As Chinese traveller in Europe, when you have a question or problem, CTRIP is leveraging its thousands of other Chinese visitors in the same city through its platform to resolve your problem in real-time. If I phone my bank or credit card company in Europe, I often have to wait for several long minutes before I finally get someone on the other side of the line. If it’s a Sunday, I even have to wait for a day. A company like Didi, the Uber of China, predicts 15 minutes in advance when people will need a car and dispatches the car ahead of time. When I call the taxi service in my hometown (as Uber is banned in Belgium), they tell me the driver should arrive within 30 minutes. Western companies now seem to trust chatbots, free returns and all-in-one mobile apps to resolve customer service. Think again. Generation China expects more than an efficient process, they expect swiftness.

Of course, there are also companies in the West that are highly customer-oriented, like Zalando or Amazon, but they tend to be the exception, rather than the rule. In China, customer service takes precedence over product innovation. This is seldom the case in Europe and America, although in recent years increasing attention has been devoted to customer-centricity. This focus on the customer is unquestionably the greatest strength of the Chinese brands, especially since product innovation is no longer primarily the preserve of the West and can just as often comes from China itself. He who owns the trusts, owns the customer. A trust that has to be earned one customer at a time. It’s hard work and technology is there to support the task, not to magically replace it.

Generation C has powerful friends

Chinese consumers born after 1990 differ very little from western millennials: they want to have a good time, share experiences, live in the 'here and now', be unique, etc. Even so, traditions continue to play a prominent role in China, especially if you wish to manifest yourself as an individual. This field of tension that exists between the cultural social regulation and the desire to move up the social ladder makes every purchase in China a curious mix of social confirmation and an expression of powerful individualism. The two things are not mutually exclusive. This social context can either completely suffocate the individual objectives of consumers or, alternatively, give them wings. The Chinese want to achieve personal advancement, but not at the expense of the team or what they have already built together in the past. The greatest difference between western and Chinese consumers can therefore be reduced in its essence to the difference between a 'me' identity and an 'us' identity. Brands in China appreciate all communication to reflect on the ‘us’ or thousands of friend-customers.

These netizens can break or make a brand overnight. Companies like Dolce and Gabbana figured this out the hard way when they released a video widely seen as racist, pandering to old stereotypes (they featured a Chinese model being taught to eat spaghetti, pizza and a cannoli with chopsticks). Some Chinese fans started burning their D&G clothes streaming it online. D&G had to apologize online to save their brand image. When catering to generation C, you are talking to many millions, not that one customer. Chinese consumers are constantly searching for confirmation, for which they usually turn to social media. As a result, they are typically better informed, very demanding and more sophisticated shoppers than westerners and share all their experiences – good and bad – within their circle of trust. Brands will become ever more vulnerable and need to check communication, claims and stories for authenticity, personal and cultural sensitivities beforehand. Every brand will need a Chief Reputation Officer.

An application that has become extremely popular in recent years is the purchase advice site RED (xiǎohóngshū 小红书). It started in 2013 as a social media platform to share personal shopping experiences online. The site makes it possible for you to easily share and recommend products and brands that match your lifestyle, but also offers more general information about new and future product innovations. In just four years, the platform grew to become one of the largest e-commerce sites in China, with more than 100 million users. What sets these media apart are the close communities that develop spontaneously, thanks to the original content of the users. Consumers never feel that RED is trying to push products on to them, but instead is genuinely concerned to provide them with authentic shared experiences and sound advice. RED's success can be attributed to the idea that on this site (unlike many others) the Chinese feel able to make their own choices, which automatically increases their belief in the reliability of the information. RED does almost no marketing, believing that its sharing of genuine content and highly relevant purchase tips is marketing enough. Their clear objective is to improve their consumers' lives. In this sense, their site visitors are more trend followers than buying customers. Authentic social validation is what sells well to generation C. Those brands who help netizens create more relevant lifestyle content will come out as winners.

Generation C trusts people over brands

Key Opinion Leaders (KOL) play a central role in communication and trust between the consumer and the brand. KOLs in China are very different from their western counterparts, the 'influencers' with whom we have become familiar through YouTube or Instagram. Chinese KOLs focus primarily on lifestyle and offer a strong educational content. They generally have expertise on a specific theme and have frequently built up a relationship with their public over a long period. Chinese KOLs have a much wider impact than western influencers. To a large extent, the KOL trend has been able to blossom in China because the country's censored state television and press has been unable to provide young people with answers to many of the questions that most interest them. Nowadays, tens of thousands of KOLs are ready and willing to offer these answers. They are top entertainers, who, like their influencer colleagues in the West, know how to keep their followers on a string.

It has been calculated that a KOL only needs 1,000 fans who share content, trust the KOL implicitly and buy regularly what he/she recommends in order to generate the same turnover as an online influencer in the West (like a YouTube star) with 1 million followers. 70 percent of the Chinese consumers born after 1995 feel wholly comfortable with buying via social media, in comparison with just 44 percent in the rest of the world in the same age category. Consumer brands are constantly searching for the right formula to create and keep loyal customers. In China, the KOLs have the almost automatic loyalty of their followers, which Western brands are now trying to exploit by investing in KOLs on a large scale. It is no longer possible to optimally reach Chinese consumers without a viable KOL strategy. At the present time, there is no question that the KOL trend is turning the advertising world in China on its head — a phenomenon that is making its way to the West, through the trend of micro-influencers. And perhaps this is not so surprising: at the end of the day, people prefer to interact with other people rather than with brands. It is this human element that is the real strength of the KOLs, who have now, in effect, become their own brand.

To market successful to the next generation of consumers, learn from China. Generation C expects brands to offer a seamless instant butler-style service, embedded in a social and localized context, and include the human authenticity factor to validate every lifestyle purchase. For non-emotional purchases, Generation C will be more than happy to let an algorithm or platform decide on their behalf what to buy. Brands today have sales people selling to business clients (wholesale, retail, Amazons) and increasingly use algorithms to sell and service to end customers. It should be the other way around. People (KOLs or social platforms like RED) is how to sell to and service customers, and brands will have to use technology to convince algorithms (in voice speakers, connected IoT devices, cars) to repurchase their brand. We should all rethink how we deploy technology and people to reach Generation C.

This article is an adapted excerpt from my new book China's New Normal that is out now in Dutch and will be released in English by September.

Pascal Coppens
Pascal Coppens
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May 16, 2019