Babytree CEO Allen Wang spoke at Greater China Forum of University of Chicago: Four Leading Trends in China's Consumption Upgrade

University of Chicago is one of the leading research universities in the world, paying close attention to global economic development. President Zimmer led the Forum with a keynote speech on China's role in leading worldwide economic growth. The University of Chicago forum aimed to better understand China's new economy through extensive discussions about new trends, among which consumption upgrade was a key topic.

Wang, together with other four fellow panelists consisting of entrepreneurs and investors, expressed different views on a range of topics including China's consumption upgrade, Chinese entrepreneurship and corporate leadership. 

Wang Cen, a Sequoia Capital China partner, talked about his anxieties as an investor with a focus on the ever-escalating complexities of understanding the verticalized Chinese consumption areas. While Allen Wang who has started and been running Babytree for 10 years, stressed that Chinese entrepreneurs should seize the once-in-a-lifetime opportunities created by macro-economic and social changes happening in China. He called for entrepreneurs to make a lasting imprint effecting these changes in China. "The capability to keep pace with societal transformation as well as to extend one's imagination boundaries are crucial for the ambitious entrepreneurs who aim to affect changes in China," Mr. Wang added. 

Reaching 200 million unique users on a monthly basis, Babytree has accumulated a vast amount of user data and verbal and behavioral insights into the Chinese parents and young families. Based on systematic analysis of those insights of parents born in the 70s, 80s and particularly now 90s, Mr. Wang concluded that the concept of consumption upgrade in China is clearly spelled out in four key dimensions. 

Four Leading Trends in China's Consumption Upgrade

The essence of consumption upgrade is to meet consumers' upgrading demands. Through long-run tracking and analysis of data reflecting consumer behaviors, Wang shared the following four leading trends that point to consumer mindset shifts from outward appearance to inward care, from broad stroke to more individualized solution seeking, from going out and away to find ostentatious fulfillment to convenience-driven close-to-home shopping habits and from appreciating product diversity to pursuing high-quality products with a relatively good price.

From outward appearance to inward care

Chinese people become more concerned about the inner care of themselves including both body care and spiritual richness, due to the unceasing promotion of income as well as living standards.

Americans spend 60% of their expenses on facial products and 40% on body care, while in China the data respectively display as 95% and 5%. According to our recent big data tracking, however, Chinese consumers show much more concern than before on body care and are vigorously converting the mindset shift into action.

The new generation of moms, moreover, care more about the richness of their spiritual world by spending money on sinology studies, flower arrangements, tea ceremonies and other activities nourishing their inner mind. For that Babytree is now setting up a series of both free and paid courses online to help Chinese moms better upgrade themselves.

From broad stroke to more individualized solution seeking

Over 64% of household consumers feel unsatisfied with current product classification according to our research based on Babytree big data. The rest who show no obvious dissatisfaction claim that they are willing to pay for products or services that meet their specific needs.

The practice of creating one single product or brand to meet as many demands as possible has seen its day. The market share of multifunctional products is shrinking, while products or brands designed to meet personal demands of a handful of people are springing up. Catering to the trend, Babytree has launched a C2M (Customer-to-Manufacturer) project which develops specific products to meet particular consumer needs, by leveraging precise consumer insight and collaborating with experts in various fields.

From going out and away to find ostentatious fulfillment to convenience-driven close-to-home shopping habits

For certain products or services might account for a relatively large proportion of household expenditure in the past, consumers were once willing to go out and away to obtain those services for ostentatious fulfillment. When it comes to early education, for instance, parents used to drive their kids to take "classes" in shopping malls miles away.

While such expense nowadays for parents in China's first-tier and second-tier cities has no longer been a burden. People began to care more about convenience. Community economy booms along with this trend and early education for communities comes into our sight. This year, Babytree joined with Mattel, a global learning, development and play company, setting up a joint venture to explore early education in community.

From appreciating product diversity to pursuing high quality product with a relatively good price

Chinese consumers tend to pursue product or service with high quality and good reputation in recent years, while the variety of products has no longer been their main concern. The evolution from Wal-Mart to Costco presents a good example. Inspired by the trend, Babytree's e-commerce platform Meitun.com, is actively adjusting its category of both goods and brands - to provide high-quality products that precisely meet customer needs.

Babytree aims at building a member club with consumption upgrade of young families at the core, accurately catering to Chinese young families' needs. Hopefully we'll finally realize our vision of new early education, new retail and new social by leveraging the four trends above.

SOURCE Babytree