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EP 30: Grace Mou unravels the current consumer attitude and "money religion" in China
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Grace Mou joins host John Stech on this week’s Auto Ethnographer Podcast for the first of a four-part series on the Chinese market, marketing, branding, and trend forecasting. She helps to unravel the current consumer sentiment in China, the world’s largest consumer market.
With a background in marketing and branding as a strategist and researcher, Grace Mou has honed her forecasting skills to determine which trends lie ahead in the Chinese consumer market. Currently working as an independent brand strategy consultant, she has worked at several marketing and branding agencies including Dongdao Brand Design & Consulting, Yang Design, Cowan, Kantar Millward Brown, and Agility Research & Strategy.
In this episode we address the following: Which sectors of goods will prevail? Are consumers prepared to pay for quality goods? Will future market develop remain in mega-cities or transition to rural China? These are questions that Grace studies and she shares her thoughts on today’s episode.
She explains the current hesitancy of consumers to spend money, favoring instead to save their earnings during uncertain times. Grace also identifies a trend of consumers shifting preference to services and experiences, as opposed to physical goods. Travel is currently a hot ticket item for the consumer.
Grace also explains the “religion of money” which she compares to being “money gene” in Chinese consumers. There is a focus on wealth and prosperity, something which has helped fuel the rapid rise of the Chinese consumer economy over the past twenty years.
But something is different now. Grace dives into these topics and more during the conversation.
You can read Grace Mou’s weekly blog with further culture insights here https://www.grace-creativity.com/blog.
You can also follow Grace Mou on Substack at https://substack.com/@trendculturebrand
To learn more about The Auto Ethnographer, visit the homepage at https://www.auto-ethnographer.com
Follow on Instagram for a daily dose of unusual cars in unusual places at https://www.instagram.com/auto.ethnographer/
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Transcript
Introduction to The Auto Ethnographer
00:00:00
Speaker
I think the Chinese chinese culture has this manly gene. As we discussed, it's a religion of manly in China.
00:00:11
Speaker
Hello and welcome to the Auto Ethnographer. I'm John Steck, your host on this journey. We travel the globe to bring you stories about culture and the global automotive industry. Fasten your seatbelt and let's get started.
Exploring Marketing Trends in China
00:00:25
Speaker
Hello and welcome to this week's episode of the Autoethnographer. This is the first of a four-part series on marketing and consumer trends in China. Today, we'll talk a little bit about the foundations of China's cultural acceleration and consumer trends.
00:00:42
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Guiding us through these four episodes is Grace Mo. a trend forecaster and brand strategist whose career has mirrored and shaped China's extraordinary transformation over the last two decades.
00:00:56
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Born and raised in mainland China, Grace began as an English teacher in Chongqing before moving to Shanghai, where she shifted from translating architecture to actually architecting brands.
00:01:09
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She's worked with global brands like Coca-Cola, Lego, Ferrari, and LVMH, as well as rising Chinese challengers, helping them navigate China's fast-evolving consumer landscape with cultural intelligence and deep market insights.
00:01:27
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Her work spans everything from ethnographic interviews in rural towns to launching e-commerce brands across Southeast Asia. Grace is a regular contributor to Canvas 8 and Time Out Shanghai, where she decodes lifestyle, luxury, and cultural trends.
00:01:45
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Whether guiding Chinese brands going global or helping international names localize for China, she's known for spotting the signals that matter and turning complexity and into clarity.
00:01:57
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You can read all about them in her blog, the link to which will be shown in the show notes. Grace, welcome to today's episode.
Grace Mo's Career and Brand Strategy Goals
00:02:06
Speaker
Hello, John. Thanks for having me.
00:02:09
Speaker
Great pleasure to have you at the on the show. um Really looking forward to today's episode, but we have a lot of topics to cover today and also over the next three episodes after this one.
00:02:23
Speaker
Sure, I would be glad join you for this. Can you tell us a little bit about your history, your past a little bit ah with respect to to marketing and trend forecasting before we get into the actual topics?
00:02:39
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Sure, I can do that. is you just the you got my introduction about my career, I started very humble as an English teacher back in my hometown Chongqing before I moved to Shanghai.
00:02:52
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I have done a lot of I have just played various roles in different marketing agencies, like marketing research agency, creative agency, design agency, and the brand consulting agencies.
00:03:06
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So my past is chaos or just like a mass mutation, you can say. So I have a lot of experience, but this mess and the chaos just trained me, have good eye to spot the signals, the trend signals and the cultural signals to see clearly what's going on amid all this kind of a chaos and the mess.
00:03:35
Speaker
And I think after all these kind of years, i accumulate a lot of me experiences. I would love to help brands, both globally, both global and the local brands to thrive in the market, both in China or overseas.
00:03:54
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That's my goal. That's a great goal. And it's a huge challenge because the Chinese market has been evolving so quickly.
China's Economic Landscape and Consumer Behavior
00:04:03
Speaker
It must be quite difficult to stay on top of those different changes and on the trends.
00:04:09
Speaker
You are correct, John. I have to say that because China has developed so fast in the past 20 years. But as the time slows down, china you call Chinese economy is facing great challenges ahead with ah consumers. ah reluctant ah to spend the money you recently. So there's a great challenge, but there also opportunities for brand ah to hedge and thrive in the market.
00:04:45
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That definitely something that requires ah an expert guidance sure navigate and figure out how to ah get the consumers to look at your brand and and to purchase your brand, your products or services.
00:04:59
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Yeah, you are right. That's our mission. And my vision and my mission is to help the brand to see the signals and that those cultural signals to adapt to the Chinese culture and thrive to compete ah in China and globally.
00:05:20
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So then let's take a look at the the current situation and and how that's developed. um Let's take a look at the the greater um situation in China.
00:05:32
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Some of the background. There is a lot of knowledge, of course, globally about the size, the vastness of the Chinese cities with tens or twenties.
00:05:43
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ah million residents. So there are a lot of urban aspirations and there's a developing middle class identity. Can you talk a little bit about how the shifting demographics and the disposable income are shaping the taste and the consumption and even the brand loyalty in China?
00:06:02
Speaker
I would love to share a couple of things about the Chinese urban aspirations and the middle class. And actually, the Chinese middle class is shrinking, but they still remain a key spending group, especially when compares to a more cautious generation And except the kids' education, travel is the top spending category for both ah affluent ah and middle-class Chinese.
00:06:33
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In the post-COVID area, their spending habits have shifted from products to services, such as a cultural exploration, like the city walks are their favorite travel oh tre choice, and also like the stay patients and the solo trips.
00:06:54
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And amid China's economic downturn, the outdoor fashion market there is also a notable bright spot for us to keep close watch on.
00:07:05
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This sector is undergoing a process of premiumization, suggesting that effluent consumers are seeking a deeper and more spiritual can connection through the products and the services they buy.
00:07:20
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Leading brands in this space currently include some foreign brands like Arcterics and the North Face with more premium and luxury logic brands entering the market grab the share of this booming economy.
00:07:39
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And the you as you just mentioned, there are also some challenges and opportunities for brands in China. In terms of the brand the strategy, I think the brand building is a long commitment and the marketer and the ambitious global brands should eye on long-term commitment ah rather than the short-term gain.
00:08:04
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And the brand loyalty is quite low in this market. So it is crucial to a avoid the being caught in price war That might dilute the brand's call and the brand's appeal.
00:08:17
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So that is my suggestion for the brands ah who are interested and want to invest in China market.
Brand Strategy in China: Long-term Commitment
00:08:28
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So it sounds to me then that the customer is less willing to separate from their money. But if they do separate for their money, they're looking for a brand that has more meaning, more deep meaning. Is that what I understand?
00:08:44
Speaker
oh Actually, nothing is correct because and nowadays, the consumers are more careful about the spending money. They save more. so if But if your brand has correct marketing strategy, understanding the local culture, and the Position yourself aspirationally enough to build the connection with consumers. Your brand have a lot of chance to win in the market.
00:09:18
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Good. And you mentioned money. um The consumers are currently holding on to their money during this economic challenging period. You and I had previously one time talked about what you called the religion of money.
00:09:33
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yeah's It's really a cultural phenomenon. And um can you explain what that means a little bit and and how does that impact society as a whole?
Cultural Shifts: From Economic Growth to Spiritual Fulfillment
00:09:43
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and And where does this come from historically and culturally?
00:09:47
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I think the Chinese chinese culture has this money gene. As we discussed, there's a religion of money in China because you think that... ah ah Also, thank you for sharing Ronnie Chan's video about the Chinese people loving money. That's funny.
00:10:07
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And that's correct because the Chinese people do adore the god of fortune. we call it Caisen Yeh. And every... spring festivals, every Chinese family will pray that Caixin is the god of fortune for prosperity a year ahead.
00:10:27
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So China has this tradition in their culture. But also China is a very, is a country who has a spiritual connections, and even though the people in China do not have any religion, religion like ah the Christian or other religion believing.
00:10:49
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So people, think in the past 20 years, Chinese government encourage people to make money and that which also fuel our ambition to oh make our, feel our ambition to make a more money which result ah in the 20 years booming economy. So I think that's a good side on the other side as I mentioned that it's a double-edged sword.
00:11:24
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On the other side we we are facing the unparalleled challenges as we need something more than just an e economic perspective parity as a as the economy is going down people are want something more than money so they are yearning for spiritual connection and the fulfillment ah For example, there is a brand, a Chinese brand called Laopu Gold, Laopu Huangjin. Maybe you have heard of this. Someone said that Laopu Gold would be a truly first ah Chinese global luxury brand.
00:12:03
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But the we it it takes time to see whether this could become true. But Lao Poo Huang Jin's huge success ah in China largely reflects ah this shift to of consumers' behavior and mindset and from only pursuing status and prestige to spiritual connection.
00:12:27
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So there was some sort of a a void or a hole um that developed by by only going and chasing money. and And now people are trying to address that hole in that that void in their lives. Is that correct?
00:12:43
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Yeah, that's correct. ah They want to fill that void the left by money because and which more and more Chinese people realize they need them more than money.
00:12:55
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So that's a turning point ah which might indicate ah in the next a couple of the decades, and the brands should take effort and the invest some more time and their money to build the connection emotionally and spiritually with Chinese consumers.
00:13:18
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That sounds like a great word of advice for any brand coming into China, yeah um as well as, of course, the the local brands as well, to developing their future business.
00:13:30
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Yes, I think that is a very obvious thing, that the consumer's mindset and the behaviors are shifting from money to spiritual yearling.
Future Growth in China's Rural Areas
00:13:42
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We talked about growth here um and we also just talked a few moments ago about about some of these mega cities. But you had told me one time before that a lot of the future growth you expected it to come not from the cities, but from the rural markets.
00:14:01
Speaker
um and some of the regions that are not really in the spotlight today. Can you speak a little bit more about this? Because I think at least outside of China, people don't really think of the rural areas. They're focused more generally on the cities.
00:14:15
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who Who are the people and what are some of the opportunities here? Hi, John. I would love to share my opinions about this new growth in the rural area.
00:14:27
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rural area. But as you can see, even though China is ah ah yes the chinese Chinese economy me you so was booming in the past 20 years, most this thing mostly happened in the urban city. But ah We are eyeing on the rural market market ah as us economy is slowing down.
00:14:53
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um In the past several years, a lot of global brands and like a luxury brands like Cadillac, LVMH, invest to penetrate to the tier three and a tier four cities.
00:15:07
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and the small towns, and not of the world, but the small towns. There are, of course, the local woman in small towns, Xiao Zheng Guifu, referring to those who spend money on luxury goods because they have stable jobs and the savings, enjoy life more than those people working and the struggling in urban cities and and like Shanghai.
00:15:33
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And then nowadays, people are escaping, more and more people are escaping from the city. They want to pursue a slow-paced life but because the competition in urban cities are too intense. and They are tired of this ah intense competition. They are running from evolution we call leijuan. Some say that China's future is in the rural market, is in the rural area, Longchun, the big rural area. The trend is propelled by Li Zhiqi's ideal rural life for China. People are seeking peace of mind in rural areas.
00:16:18
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Some people, if you just screw the Chinese Douyin TikTok, Chinese TikTok, you can see people, some ambitions, entrepreneurs are doing business ah ah in rural areas. Some are opening coffee shops there.
00:16:40
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Some do some farming, organic ah farming to provide the farm from farm to table product and the service to the people who can afford this luxury.
00:16:53
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So that's that's quite a shift, part partly with the luxury goods, you mentioned LVMH, um but also the more local products, like as you mentioned, the organic goods, organic foods.
00:17:07
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Yes, there are two things. In the past ah several years, luxury brands like ah LVMH and Kaguya are eyeing on rural, ah not a rural area, but a tier two, tier three tier four city because people there ah would love to enjoy, ah it you ah would love to just spend their money on luxury products because they have stable jobs.
00:17:34
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And the nowadays, more and more people escape from the city. That's a new trend emerging.
00:17:44
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I can certainly understand that. um I think you have different countries around the world where you see on Friday afternoon, the cars are streaming out of the city into the countryside, and then they come back on Sunday afternoon.
00:17:58
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People need some some air, some space, some greenery around them. Yes, actually in Chinese culture DNA, people as still want a life without bustle and the hustle.
00:18:13
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i Have you just ever just the read of the Chinese famous poem which reflects an ideal life Chinese people found in the rural area or in the nature? There are a lot of poems.
00:18:27
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banker and the literature descriptions about the ideal life in a countryside or something. So that is Chinese culture DNA.
00:18:40
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We also had previous ah discussion one time about the impact of high net worth individuals and even ultra high net worth individuals on the growth potential in China. I assume this that these people are primarily located in the large cities.
00:19:00
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How would you say that they can contribute to the growth in China?
Luxury Market and High Net Worth Individuals
00:19:04
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um Because the number of must be relatively small compared to the entire population. ah Correct. That's correct. ah They are small numbers, but as they are the focus of the giant to luxury brands.
00:19:21
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ah Because if they contribute, maybe they might just make up about 10% of the... of the consumer, attacking the consumer of the luxury brands, but they contribute to more than 80% of revenues.
00:19:39
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So they are very important so for the luxury brands to survive where during this economic downturn. There are a couple of trends. The trend, because during the, eological when the economic is slowing down,
00:19:57
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But the downgrading consumption, Xiaofei Jiangji does not affluent these affluent consumers in China in urban cities. They are hope of a premier and the luxury brands in the market as the sales for luxury eight natural major luxury giants are declining recently.
00:20:22
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However, their consumption behaviors and mindset are shifting. First, they shift from, they are just spending more money the on service instead of on product.
00:20:38
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Like travel, they splurge you a lot money on travel instead of on real products like bags, shoes, or fishing or something like that. That is one shift.
00:20:50
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And the second, we just discussed that before, they are looking for something to fill the spiritual void and left by the huge loss from the economic boom to the economic downturn.
00:21:04
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So... ah yeah If you just are in Shanghai, go to those ah financial centers like IFC in Lu Jiajui, the Shanghai Financial Center.
00:21:17
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You take a look in the ah luxury stores in IFC, one of the premier shopping malls. You can see people just call in front of the Lao Poo Gold, Lao Poo Huang Jing, instead of Hermes.
00:21:35
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the yeah so There used to be a very long queue in front of Hermes. Now they are there are there is long queue in front the Lao Pu gold, Lao Pu Huangjin, which is a Chinese and luxury brand. and The reason he behind it is that Lao Pu Huangjin precisely captures this product precisely captured this need for spiritual fulfillment and turn this void and into commercial prosperity.
00:22:06
Speaker
prosperity There are some challenges for luxury and the premier brands too, because Lao Poo Huang Jing is surpassing other global giants to become the new darling as a luxury jewelry brand. But there are challenges for Lao Poo Huang Jing if they are going global, because this is...
00:22:34
Speaker
a unique, ah ah ah maybe coincident thing happening in China. ah We have to wait for We have to just a wait and see whether Laopu or gold can really capture the zeitgeist of China or they can adapt this brand core to the other cultures.
00:23:04
Speaker
And another thing is the challenges in China. Chinese people, ah because they are saving money, they are very they've become more and more careful about spending their pennies on something they thought they think worthwhile.
00:23:22
Speaker
So they put quality first. step If the brand wants to win in China, they need to prioritize the quality with affordable price. Because people here, someone said Chinese people are looking for Japanese quality at the Indian price. This is partially correct, but 100% accurate. Chinese people still...
00:23:47
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ah curator people steal pay money for quality, but you have to provide, you have to justify the the price ah use worthwhile for good quality and they will still spend money on that.
00:24:10
Speaker
It sounds to me that There's been such an incredible shift over the last 20 years, first 20 years of growth and boom. and And now as things are a little bit slow and uncertain, people are spending their money more carefully.
00:24:28
Speaker
They want more from their brands, more meaning, more depth. And it sounds also that they will not sacrifice in quality. They don't want to spend so much money, but they still have a high requirement for for quality.
00:24:45
Speaker
Exactly, John, exactly. Because Chinese people are more careful about their money. They want to spend ah ah their money on something ah which can be we she they believe can be an investment ah for their happiness emotionally.
00:25:05
Speaker
so And of course, as as we started earlier in the conversation, this money is, as you have said before, is a little bit like a religion.
00:25:15
Speaker
And they ask for the for the blessing for the for the coming year. Yes, and they are ble they they spend the money for like ah more more prosperity and certainty in this ah chaotic ah age.
Emotional and Spiritual Investments in China
00:25:31
Speaker
ah There is a religion called Xuanxue. I'm not quite ah sure how to translate it in English, but that you can just ah look at my previous article about this.
00:25:44
Speaker
I mentioned the Xuanzhuang is kind of a superstition. People will not find the predictive. They want a sense of a security in this uncertain future.
00:25:57
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So that's why Lao Hu Gold captured this. And they use a lot of design and the motives ah to echo the needs for this certainty.
00:26:12
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So that's very interesting. So I think that if your brand want to ah make money in China, you need to just take notes of the shift of the mindset of the consumers and their behaviors.
00:26:29
Speaker
I think this is a great time to um wind down this episode and and to summarize really by by saying from my perspective, it sounds like the Chinese consumer is very much like any consumer around the world. They don't like uncertainty.
00:26:49
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They want something more certain and something more predictable in their in their life. I think it's it's interesting to see, of course, that this is something that seems to be common across all of humanity.
00:27:02
Speaker
Absolutely. Absolutely. correct I think with that, Grace, I think our first episode part is a great way to set the stage.
00:27:16
Speaker
We talked a little bit about the different consumer classes, the high net worth individuals, ultra high net worth individuals, the rural areas, which seem to be the future rise in the market to drive a lot of the the growth.
00:27:31
Speaker
We talked about the religion of money and the role that that plays among the Chinese consumer and the expectations that they have for the brands to have more meaning coming from the brand, something that speaks to them a little bit more.
00:27:46
Speaker
Any final words from your side before we wind down this episode? And then next time, we'll jump into the topic of China's cultural soft power and the global perception of China's cultural soft power.
Preview of Next Episode: China's Cultural Soft Power
00:28:03
Speaker
I'm very looking forward to talk about the Chinese culture and the Chinese soft power. I think this episode that we just ah mentioned and touched base on a lot of ah market potentials.
00:28:17
Speaker
I think the brand with ambitions can still make money in China. This is a very attractive market. ah The global brand with ambition should not give it up.
00:28:29
Speaker
there are a lot of potentials so for the brand to thrive and the and the make money right here. So next ah ah episode, that when we talk about the soft power, I will just ah give you more thoughts on what is happening in China and why I predict that a Chinese soft power will be a bright spot after Chinese yve AI and biotech.
00:29:01
Speaker
This sounds like it's going to be an interesting discussion next time. And I look forward to that. So thank you, Grace, for joining this week on the Autoethnographer. And I look forward to our conversation the next time.
00:29:16
Speaker
Thank you for having me, Joe. It's my pleasure to talk with you. Thanks. And to all the listeners out there, thank you very much for joining in. I look forward to running into you on the next episode.
00:29:31
Speaker
Until that time, keep on driving. Thank you for joining us on today's journey. Please remember to like and subscribe to The Auto Ethnographer and leave us a rating or comment. For more information, visit our website at auto-ethnographer.com.
00:29:47
Speaker
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