Recently, China's young people have unleashed a frenzy of "reverse consumption", pushing away materialism and extravagance in favor of practicality and cost-effectiveness. This approach has directly overwhelmed the business giants who used to rely on high prices and luxury marketing, leaving them scrambling to cope with the changes.
The rise of the phenomenon of "reverse consumption" and its causes
The so-called "reverse consumption" is an emerging trend that runs counter to traditional consumption habits. Instead of blindly chasing luxury brands, young people now value the practical value and high cost performance of goods. It's better to choose a generic but value-for-money product than to pay a premium for a brand.
This emerging concept of consumption originates from multiple changes in the current social environment:
First, the economic downturn and declining income are important reasons. In recent years, the domestic economic growth has slowed down, the profits of many industries have declined, and the income of young people has naturally been affected, and luxury consumption has gradually become "luxury".
Second, the intensification of social competition has increased the pressure on life day by day. With fewer jobs and a dire employment situation, young people are no longer able to splurge as much as they used to, and instead prefer to live a budget-conscious lifestyle.
Third, the continued rise in prices and shrinking wages have also left young people helpless to make trade-offs. At a time when food and clothing are struggling, luxury goods naturally have no time to take care of.
Fourth, the Internet has promoted the upgrading of consumption concepts. The rapid circulation of high-quality and low-cost products online, making it more convenient for young people to obtain relevant information, and the pursuit of cost-effective consumption has become the tide of the times.
Traditional business giants have been hit
In the face of this wave of "reverse consumption", the traditional business giants that focus on luxury marketing are the first to bear the brunt and feel the unprecedented pressure and impact.
In the past, they successfully attracted a large number of high-spending people with their high prices and luxury packaging, and luxury goods, high-end hotels, luxury cruise ships, and jewelry can be said to be their money bags. However, now, young consumers have turned away from those products that are over-packaged and have a premium price. On the contrary, low-cost airlines, special hotel chains, online shopping fashion and other low-end products are very popular.
This has put a lot of pressure on traditional giants, including InterContinental Hotels Group, AccorHotels and other hotel chains. The "special forces-style poor travel" that young people have turned to pursue has put the entire luxury travel industry in a difficult situation. The rise of e-commerce channels and the acceleration of younger consumer groups have greatly reduced the competitiveness of high-end brands in the previous luxury marketing model, and their dominance has been greatly threatened.
In the face of the trend of young consumers becoming dominant, how to deal with the traditional business giants, how to reshape their brand image and marketing strategies to win the favor of this emerging group, has become their most pressing issue.
Industry tycoons are at a loss to meet the tide of "reverse consumption".
In the face of the prevalence of "reverse consumption", countless traditional giants in the industry have felt unprecedented pressure and crisis. Their old marketing model is very weak among young consumer groups, and the rapid rise of new consumption concepts has made these former industry hegemons at a loss.
Tourism is arguably one of the hardest hit sectors. The large hotel chain and travel group that once focused on luxury routes is now a long-standing staple. The high-end cruise tours and top hotel packages they spent a lot of money on were all "dissed" by the younger generation.
In stark contrast, it is the new model of "special forces-style poor travel", which is highly sought after by young tourists. They traveled thousands of miles just to experience local life and taste authentic folk food, often spending hundreds of yuan. High-end products such as luxury cruise ships and luxury hotels have become the object of "everyone shouting at rats crossing the street".
The same is true for the high-end beverage market. Freshly ground hand-poured coffee and high-quality black tea with a price of nearly 100 yuan were once sought after as the "third coffee revolution", and countless capitals flocked to it. But now, young people only identify with the "nine pieces of nine" level of Internet celebrity milk tea and pure coffee, and scoff at the word "high-end".
In line with this trend, a large number of convenience stores have sprung up like mushrooms after a rain, quietly occupying the market. On the other hand, those old chain stores that make money by selling expensive coffee and tea can only watch themselves lose their young consumer groups, and their lives are getting more and more difficult day by day.
Even the diamond and jewellery industry, once the strongest luxury sector, is now failing. Young people are "slaughtered" by traditional brands at high premiums, and they only recognize niche brands or second-hand trading platforms that are cost-effective and value-for-money. Millennials, who have been unable to conquer for a long time, have become a permanent fear in this industry.
A "revolutionary" revolution is reshaping China's consumer market, and materialism and ostentatism are rapidly declining. I have to say that this "reverse consumption" has sounded a heavy alarm bell for the market giants, who are still complacent and conformist, and are destined to be abandoned in the torrent of the times.
Instead of sticking to the old advantages, it is better to face the trend of change and take the initiative to embrace the market. Only by keeping pace with the times and always keeping up with the pace of young people's pursuit of high cost performance can brands win attention and popularity among emerging consumer groups.