Gen Z consumers are transitioning into adulthood in a time of a global pandemic, forming a unique set of needs and challenges.
Born in the late 1990s to early 2010s, Gen Zs are one of the most important consumer segments. According to a McKinsey and Company article on differentiating values of Gen Z consumers, Gen Zs would make up a quarter of Asia Pacific’s (APAC) population by 2025.
Globally, Gen Zs have never been an easy consumer group to target due to their unique characteristics and diversities. As such, there was never a one-size-fits-all solution to engaging them. Unfortunately, since the COVID-19 pandemic, these challenges have been heightened as more of them experience worsening education, employment, and income disparity—consequently leading to a rise in stress and anxiety.
With these unique challenges in mind, it creates a new or slightly altered set of needs that businesses everywhere have to adapt to. Here are five of the latest consumer trends among Gen Zs in Asia Pacific.
1. Research Before Purchase
It is not much of a surprise that Gen Zs do tons of research before making a purchase. Interestingly, despite trusting friends and family more than any other source, this information alone is not enough to convince them to convert to a customer.
So while word-of-mouth and peer recommendations play a role in influencing their purchasing decisions, Gen Zs still choose to conduct their own research to fact-check and analyze the product’s suitability to their needs.
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What exactly do they search for online, you ask?
Besides searching for the hard facts of the specific products, Gen Z consumers are very interested in finding deals. A study by McKinsey & Co reveals that Gen Zs are more likely to say that they always or almost always look for discounts compared to millennials and Gen Xs.
A possible reason for the behavior mentioned above could be that fewer young consumers are likely working full-time. According to another McKinsey & Co survey, 58% of Gen Zs from 17 to 23 years old are not gainfully employed in either full- or part-time jobs or as freelance workers.
Since most Gen Zs are unemployed, it would explain why they would generally have less buying power than the older generations. However, despite possessing this deal-hunting behavior, it is worth noting that price is not the only factor to consider as they are not willing to sacrifice quality just for a cheaper value.
2. Personalization Is Key
Getting in the good books of these Gen Zs may be your first step to gaining their trust and loyalty. Gen Zs seem to prefer brands that showcase their personality and uniqueness. In fact, 40% of them tend to look for brands that are popular with their peers. So, it’s safe to say that brand recognition is a worthy factor in winning them over.
Gaining their recognition is not easy but it’s also not impossible. Compared to Gen Xs and millennials in APAC, Gen Zs are more likely to say that they want brands that set them apart. There is a general consensus to gravitate towards brands that help them highlight their individuality. Who better to help them do that than the labels that embrace their own identities?
Apart from uniqueness in the brand image, Gen Zs expect personalization in their range of services and features offered. In these products, they tend to look for qualities like personalization, customization, exclusive or limited edition products, and brand collaborations like the BTS collaboration with McDonald’s. According to a recent McCann Worldgroup study, 69% of Gen Zs from APAC say they are always 'looking for the next cool thing' versus 60% globally.
All these data suggest that Gen Zs expect brands to fuel their creativity, as they feel their way and try things, mixing genres, styles, and local references. In line with this, they are more attracted to brands that embrace their unique identities. Doing so helps these brands maintain a sense of relevance and distinctness to connect better with Gen Zs.
3. Online > Offline Shopping
According to AlJazeera, 76% of the surveyed Gen Zs in APAC are comfortable shopping online and 73% use their phones for online shopping.
Given the socio-economic situation in the past year, we have all been observing an acceleration in digital transformation. For instance, the COVID-19 pandemic resulted in the average share of digital customer interactions increasing from 32% to 53% between 2019 and 2020 in APAC.
This is no different for e-commerce.
With the new stay-at-home lifestyle, it is no wonder that unique consumer needs have emerged, resulting in a shift in their shopping habits. Bain’s 2020 report shows that 47% of digital consumers have decreased their offline purchases and 30% increased their online shopping since the pandemic started.
Bonus: Wanna find out what else is trending in Asia? Check out these other consumer behaviors that are driving growth in APAC!
Gen Zs in APAC prefer to make online purchases as they believe that it is more efficient than buying offline. Based on PwC’s 2021 Consumer Insights report, on a global scale, Gen Z shoppers are more likely to shop daily or weekly using their mobile devices compared to their older counterparts—a trend predicted to likely carry on in the foreseeable future.
4. Influence of Video Content
In this age of social media, we all spend quite an extensive amount of time online. However, Gen Zs’ screen time can go up to approximately 6 hours or more daily, which is a considerably higher share than millennials and Gen X.
Gen Zs are arguably influenced the most by video content among the large variety of online content freely available. They view a significant amount of video media, and this consumption impacts their choice of brands and products.
McKinsey & Co’s study reveals that 70% of their surveyees learn about new brands via video-based social media at least once a month. They found that Gen Zs are also more likely to cite video as one of the top three sources influencing their choice. Video content does not only influence brand awareness but also impacts their audiences’ purchasing decisions.
Gen Zs in South Korea, Japan, and Thailand are the top respondents agreeing that video content is their top 3 influencers of brand and product choice.
As expected, social media is a vital part of the marketing funnel, and it can impact consumer decisions at every stage. It is essential to note the role of each platform in the eyes of these young consumers.
For example, Think With Google reveals that Gen Zs identify sites like Facebook (37%), Google (33%), and YouTube (31%) as their preferred channels to catch trending news. They also follow specific news publications like CNA, Kompas, and Mothership on Telegram to stay updated.
Gen Zs view social media as a way to maintain fun in their lives. This has become even more fundamental since they weren’t able to interact with their friends in person during the COVID-19 pandemic.
5. Environmentally Conscious
Sustainability has been increasingly top of mind in APAC, especially among the Gen Zs. This is evident across markets based on Sandpiper Communications’ survey results where 90% of surveyees from China, 87% from Hong Kong, 81% from Australia and Singapore say that sustainable development is a significant concern to them.
Beyond that, 60-80% of the Gen Zs surveyed by McKinsey and Co think that brands should be held accountable for their actions. However, it is important to note that among the six countries surveyed (Australia, China, Indonesia, Japan, South Korea, and Thailand), only the Australians are willing to pay more for environmentally responsible products.
This could be due to the fact that sustainable alternatives are not always the most affordable options. As such, Gen Zs resort to e-wallets and “buy now, pay later” services to help them sustain this new lifestyle. In India and Southeast Asia, 12% of Gen Z are currently using e-wallets. This number is higher in more established e-commerce markets like Singapore (18%).
Despite sustainability being a major concern for Gen Zs, they are not willing to spend extra for these alternatives. This means that still, brands have to offer competitive pricing to attract Gen Z customers.
Price and quality are Gen Z’s top priorities across the globe.
Staying Woke With Gen Zs
Similar to other generations, Gen Z has its own set of unique needs and qualities. Understanding the complexities of their consumer behaviors is the first step in engaging them.
With social listening, identifying online conversations about specific topics such as your branded campaigns, trending movements, key influencers can easily be achieved to help you understand your consumer behavior better. As Gen Zs have an entirely unique set of customer profiles, it’s important to build brand messaging and products according to your customer’s needs in real time.
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