After being “released”, young people have really changed

After experiencing the uncertainties of the pandemic for three years, young people have begun to learn to be thrifty in their consumption. The change in the consumption concept of the younger generation has also enabled e-commerce platforms to truly enter the stage of high-quality development from rapid expansion. In the face of new consumption concepts, what should e-commerce platforms compete for?

After the adjustment of epidemic prevention and control policies, revitalizing consumption has become the keyword for the new year.

However, as today's main consumer group, this generation of young people, after experiencing the uncertainties of the three years of the epidemic, no longer blindly "retaliate with consumption", but are more "thrifty".

Judging from actual purchasing power and consumption preferences, the new generation's careful budgeting cannot be simply equated with "stinginess" or "consumption downgrade", but rather hides a new consumption philosophy that pursues "quality-price ratio" - both good quality and cost-effectiveness.

The pursuit of good quality is the inertia and mentality accumulated in the pursuit of high-quality life and rich experience in the past few years. After experiencing the baptism of new consumption, it is more reflected in the trust and recognition of good brands; and the emphasis on cost performance is the rationality and pragmatism reflected after the online shopping craze has cooled down. It does not necessarily have to be cheap but must be worth the money. In general, today's young people no longer satisfy their shopping desires by buying new products in large quantities and frequently, but improve their quality of life through more reasonable and accurate consumption.

Under this consumption trend, they not only pay more attention to the brand, quality and price of products, but also pay more attention to the services of shopping channels. They want to buy not only at a good price, but also to be happy. For example, direct and affordable promotions, complete product displays, stable express logistics, and perfect after-sales services are all plus points for them when choosing e-commerce platforms for shopping.

The change in the consumption attitude of the younger generation has also enabled e-commerce platforms to truly enter a stage of high-quality development from rapid expansion. Focusing on young consumers and starting from new consumption attitudes is the certainty of their future operations.

01 This generation of young people should learn to be thrifty

Reviewing her recent shopping list, Xiao Xiao found that she has "grown up".

In the past few years, post-90s like her, who have gradually become financially independent, have increasingly pursued quality of life and consumer experience. They are impressed by more diverse scene applications, more scientific product designs, and higher-end quality upgrades, and are more willing to pay for good and big brands. But at the same time, the rampant Internet traffic marketing has also created many products of impulsive consumption. It was not until the post-epidemic era with increasing uncertainty that the younger generation began to return to rationality in consumption.

In the past, Xiao Xiao always spent a lot of money in big sales such as 618 and Double 11, but many of the things she bought were not practical, such as drawers full of skin care product samples, snacks that were not finished until they expired, and massagers that were idle and gathering dust.

But this year, she began to streamline her consumption and only bought essential products that suited her lifestyle. For example, on Singles' Day, in addition to some daily consumables and cat food, she only bought a coffee machine, a floor scrubber and a down jacket. "During my work from home, I used the coffee machine very frequently, and I made two cups of coffee almost every day. I have a serious mysophobia, and I just moved recently, so the floor scrubber came in handy. Down jackets are also a must-have for going out in winter."

Although the number of shopping orders has dropped significantly, Xiao Xiao's demand for quality life has not declined. These "large purchases" all come from good brands and classic items that she carefully selected. Therefore, her spending amount has increased instead of decreased compared with last year's Double 11, but she thinks it is worth it. In her words, " You can buy expensive things, but you can't buy more expensive things ."

Since the adjustment of epidemic prevention and control at the end of this year, revitalizing consumption has become the main theme of the economy and society, but more young people have not rushed into "retaliatory consumption". Instead, they have been rational and pragmatic to the end.

Zhou Qing, born in 1995, likes to shop for clothes online. In the past, her first criterion for buying clothes was whether they looked good. After a year, her wardrobe is filled with all kinds of items, but there are few that are truly versatile and often worn.

"When I saw a closet full of clothes but still didn't know what to wear, I suddenly felt that I could no longer satisfy and stimulate myself by buying new things all the time, but should complete the consumption advancement through matching." Zhou Qing said that this winter, she no longer "buys one by one", but only picks things that are versatile, of good quality and can stand the test of time, such as cashmere sweaters and wool coats.

"Of course, big brands and good quality are more expensive, so you have to choose carefully, fully compare the product's materials, style design and price, and choose the one that's the best value," she added.

Today’s young people are pursuing a new consumption philosophy: both good quality and cost-effectiveness.

The research report on the development trend of new youth fashion consumption by the Beijing Normal University research team shows that nearly 70% of young people consider cost performance first when shopping. The 2022 Generation Z Insight Report released by QuestMobile shows that more than 60% of young people put quality first.

In Zhou Qing's view, the two are not contradictory. "Cost-effectiveness does not necessarily mean cheapness or parity. For example, a good brand and good quality may not be cheap, but it can maximize its functional value in appropriate life scenarios."

As a result, they are becoming more and more "calculating" when consuming. PwC's "2022 Global Consumer Insights Survey" pointed out that Chinese consumers will be selective in their consumption under uncertain economic prospects, but they have not lowered their requirements for quality or abandoned their personal preferences to choose substitutes. On the contrary, they want to get better products at every price point to ensure that every purchase is correct and reasonable.

In the post-epidemic era, young people have a stronger pursuit of quality consumption and yearning for a better life, but "careful budgeting" has also been deeply rooted in people's minds. When it comes to consumption, their strategy is: don't buy or buy less of things that are not needed, have low utilization rates, do not conform to living habits, or are tempted by discounts and group buying; and things that are just needed, good value for money, and can improve the quality of life must also be bought at good value for money.

02 How do young people who “want both” shop online?

In the past, many people had a preconceived inertial perception of the main categories of different e-commerce platforms. For example, when buying skin care products, they would look for Tmall flagship stores and live broadcast rooms of big anchors; when buying digital home appliances, they would go to JD.com; when buying big-brand shoes and clothing, they would go to Vipshop.

Now, brand merchants generally choose to operate on multiple platforms, and major e-commerce platforms continue to expand their sales categories and their self-operated systems are becoming more mature. Consumers have more shopping channel choices, but the preferential mechanisms and strengths of different platforms are different, and the prices they get are also different.

Driven by rationality and pragmatism, this generation of young people is willing to spend more time and energy to compare prices of the same product on different platforms and channels.

Chen Yu, a post-90s consumer, is used to searching for the target products on her shopping list on e-commerce platforms such as Tmall, JD.com, and Vipshop, recording their respective discount mechanisms and prices, and then choosing the most cost-effective one to place an order. It was after a thorough comparison that she discovered that e-commerce platforms are now expanding the breadth of categories and brands, and there are far more selectable and more affordable shopping channels than she thought.

"In December, I bought a Bosideng down jacket for each of my family members at Vipshop, because they were all in stock and the discounts were huge. I originally planned to buy a TV in a store on Double 11, but later found that it was several hundred yuan cheaper after the discount on JD.com, and they also provided door-to-door installation, so I decisively switched to JD.com's flagship store," Chen Yu shared.

In some Douban shopping groups, more young people are committed to searching and sharing the most favorable shopping channels on the entire network. Of course, the premise is that the source is reliable and the quality is guaranteed.

In addition to price, service, efficiency and experience also influence consumer decisions.

For example, logistics services have the most direct impact on consumer experience. Due to the optimization and adjustment of epidemic prevention and control measures, coupled with the strong consumption during the Chinese New Year, "not receiving express delivery" has become a pain point for many consumers recently.

"I took advantage of the Double 12 discount to buy a pair of brand-name boots, but when I received them, the size didn't fit and I needed to exchange them. However, the merchant required that the exchange be sent out only after receiving the returned product. Now a week has passed, and the return courier is still stuck on the way." Zhou Qing said that she has been much more cautious when shopping for New Year's goods recently. Before placing an order, she would ask about the delivery time, whether there is freight insurance, whether it is possible to return or exchange within 7 days without reason, etc., so as to reduce the cost of trial use as much as possible.

Xiao Xiao also said that after experiencing several experiences of stockpiling goods at home but encountering logistics obstructions this year, she would prefer shopping channels with stable logistics and guaranteed timeliness.

For example, the shopping efficiency is most obvious during the promotion period. The complicated deposit, final payment, cross-store discount, category coupons, product coupons, red envelopes, how to prepay, receive coupons, and make orders to enjoy the greatest discounts are enough to give consumers a headache when comparing prices.

When the final promotion intensity is approaching, the platform that can directly offer discounts and sell off-the-shelf products, allowing consumers to directly feel the cost-effectiveness of the products rather than doing math problems over and over again, will have a better chance of winning the favor of young people.

In addition, when faced with a wide range of goods, young people are becoming more rational and cautious, and they are more concerned about whether e-commerce platforms can improve the consumer decision-making process and help consumers shorten their decision-making time.

"For example, can e-commerce platforms launch some selected lists and high-quality buyer shows based on the trends of different consumer categories, which is equivalent to a built-in 'planting grass' function to help consumers screen high-quality products in advance?" Chen Yu believes that this will greatly save the time of going to other platforms to "do homework" and enhance consumer trust.

Consumers' intuitive feelings also show that for today's young groups, online shopping is not just a one-time transaction, but also an experiential consumption. From product selection, to quality, price, logistics, and after-sales service, each link in the consumption chain is a plus or minus point, which comprehensively determines their final shopping channel choice.

03 In the face of new consumption concepts, what are e-commerce platforms competing for?

The change in young people's consumption concepts and preferences has also put e-commerce platforms at a new starting line, from focusing on GMV and pursuing rapid development in the past to now focusing on consumer experience and pursuing high-quality development.

In the new round of industry competition, service competition centered on the needs and experiences of the new generation of consumers has been given a more important position.

For example, logistics and after-sales service are one of the areas where e-commerce platforms such as Tmall, JD.com, and Vipshop continue to focus their efforts.

During this year's Double 11, Tmall extended the price guarantee period from 15 days to 27 days. All Tmall orders come with free shipping insurance and free return shipping, and door-to-door delivery is supported in 30 cities across the country.

JD.com also continues to strengthen its logistics advantages, utilizing eight major warehouses across the country to prepare goods in multiple locations in advance, ship goods from multiple warehouses, and provide differentiated pre-sale services in the last mile, initiating delivery immediately after the final payment is made.

Vipshop insists on cooperating with SF Express to provide users with free door-to-door return and exchange services. When the courier comes to pick up the goods, he can bring the replacement goods at the same time, which greatly improves the shopping efficiency of consumers.

The promotion and decision-making at the front end of the consumer chain, which used to be a major pain point for shelf e-commerce, are now also highly valued by various e-commerce platforms. It is an important way to build consumer trust and enhance consumer experience.

Taobao has created an in-site community called "Guangguang" where users can view pictures, texts, short videos and live broadcasts related to products, and quickly search for related or similar products for comparison or purchase. In addition, Taobao Live has vigorously promoted content, introduced content-oriented anchors, and provided traffic support to live broadcast rooms with good content.

JD.com has launched different strategies for promoting products in different categories. For example, for beauty products, before the big sale, it distributes trial packs of domestic brands to allow consumers to try before buying. For digital appliances, there is also a professional buyer team that explains new products to consumers and provides professional purchasing suggestions on the "JD Little Magic Cube" channel.

Vipshop keeps up with consumer trends and during the 12.8 sale, it not only created a winter warm goods festival to meet consumers' needs for warmth in the cold winter, but also launched an annual trend award, including selected products under various consumer trends such as self-pleasure economy, appearance economy, fashion economy, and health economy.

With more precise and efficient consumer services, Tmall, JD.com, and Vipshop complemented each other's strengths and weaknesses, and ultimately achieved explosion in multiple categories.

Data shows that during the Double 11 period, JD.com's new department store had a total of 589 categories with a year-on-year sales growth of more than 100%, and the sales of JD.com's new department store offline stores increased by 262% month-on-month; Tmall's emerging industries performed well, with categories such as mountaineering and camping growing by more than 100% year-on-year. During Vipshop's Double 12 year-end sale, the platform's sales of men's and women's down jackets increased by more than 50% year-on-year, sales of children's down jackets doubled year-on-year, and sales of thermal underwear increased by more than 120% year-on-year.

For these e-commerce platforms, this is not only a satisfactory answer in a year full of uncertainty, but also a starting point for gaining new growth in the coming year.

In the view of Cui Lili, director of the E-Commerce Research Institute of Shanghai University of Finance and Economics, at this moment, e-commerce platforms need to dynamically adjust each link based on the external environment and time nodes. For example, when logistics capacity is tight, logistics services with better resilience should be tilted towards products with rigid demand; based on the platform's main user positioning, different products/combinations should be launched to adapt to the preferences of the people gathered on the platform.

She believes that integrating platform resources to provide intensive and cost-effective services to end consumers will not only benefit users, but will also greatly increase merchants' attention to the platform.

With consumers at the core, e-commerce platforms will lay a solid foundation, seize new trends, and make predictions in advance. Under the general trend of adjusting epidemic policies and revitalizing consumption, they may have another opportunity to reshape their value and positioning.

*At the request of the interviewees, Xiao Xiao, Zhou Qing and Chen Yu are pseudonyms in this article.

Author: Wu Jiaoying; Editor: Jin Yufan

Source: WeChat public account "Shenran (ID: shenrancaijing)"