Guochao, a Nationalism-driven Consumption Trend in China
How does Guochao reshape the landscape of the fashion market in China?
In China, even though western brands are still dominating its fashion market, the local players are becoming more and more under the spotlight. It seems that the absolute domination of foreign companies has been changed recently because the Chinese consumers, especially young people, are switching their attention to domestic corporations. This preference shift has formed a trend called “Guochao”(国潮) which literally means the “national tide”. It was coined by the Chinese netizens when the Chinese label Li-Ning launched its first collection at Paris Fashion Week in 2018 to describe a fashion style inspired by Chinese culture. Later, the idea of Guochao is affected by the rising nationalism in China, which makes the collective identity of the Chinese people become its core value. Now, this trend of the preference for Chinese culture, tradition, and companies is reshaping the landscape of the world’s largest market.
Nationalism, driving force of Guochao
The development of Guochao is mainly driven by nationalism in China. And the country’s economic development is one of the main factors contributing to the rise of this nationalist trend. During the last decades, China has always been one of the countries having the fastest economic growth. It has become the second-largest economy across the globe since 2011 and is increasingly influential at an international level. Moreover, its large population creates a huge market for any type of product. As the Chinese consumers can generate huge sales, many international companies rely more and more heavily on this market. Such a dependency empowers the Chinese people to determine companies’ future direction. This makes the whole system more China-centric and thus stimulated the growth of nationalism.
Politics, catalyst of Guochao
Politics is also playing a critical role in this emerging nationalist fad. The ongoing trade war between China and the USA makes it more difficult for American brands to enter the Chinese market. Additionally, this political tension has increased the hostility of the Chinese consumers toward the companies and products from the USA. Also, this year, the boycott against foreign fashion corporations over Xinjiang cotton has pushed the trend of nationalism to another peak. It is believed that this backlash was manipulated by the Chinese government to fight against the western countries that sanctioned several Chinese officials over Beijing’s controversial treatment of Uyghurs, a minority group in China. This nationwide boycott encouraged the Chinese consumers not to buy from the companies that have a political position against China. This movement has later become a trend of buying from the local brands which cherish the “Chinese value”. Guochao, the fad based on the Chinese collective identity, is therefore getting more and more attention.
Preference for Chinese culture
The first impact of Guochao on the Chinese consumers is that they are more interested in Chinese culture-inspired products. This trend of preference is mainly accelerated by the support from the local government. In 2019, Xi Jinping published an article in Qiushi, the official journal of the Communist Party of China, to promote the idea of “Cultural Confidence” (文化自信), which refers to the concept of being proud of Chinese culture and tradition. The encouragement from the government has even boosted the sales of some products. According to iiMedia, in 2020, the market sales of Chinese Hanfu, a type of Chinese traditional costume, has increased by more than 40% compared to 2019 and is expected to reach more than 10 billion RMB in 2021, which is approximately ten times more than the sales in 2018. Such a surge in the Chinese Hanfu market is considered the result of the promotion of Cultural Confidence.
Trend of purchasing locally
Under Guochao, the Chinese consumers are also starting to buy from domestic brands. This is because Chinese companies are supported by the government and more familiar with the preference and behavior of the local clients. Since 2015, the Chinese government has started to invest in local manufacturers to help them develop their own brand. Additionally, in 2017, China officially announced that May 10th is the China Brand Day to promote its domestic corporations. Many local players have successfully created their own reputation based on the national assistance, so the Chinese consumers’ perception of “made in China” has gradually switched toward a more positive direction. Moreover, local players are more familiar with the unique digital landscape of the country. They know better how to well use the platforms, such as WeChat or Weibo, to build a deeper connection with the Chinese consumers. This makes them increasingly trust-worthy for the local clients. As a result, they are gaining more and more attention from the Chinese market. According to the research conducted by people.cn and Baidu, the labels native to China accounted for 70% of online brand queries in 2019.
Revival of local brands
Guochao also contributes to the revival of local corporations. Some domestic players that have been existing for many decades in China were parts of their past life experiences. Those heritage brands are the triggers that can easily arouse local consumers’ nostalgia sentiments, which makes them more emotionally attached to those local players. Anta, for instance, a Chinese sportswear company, was founded in 1991 and considered a cheap brand at first. Under Guochao and with its well-performed nostalgia marketing strategy, it has successfully turned itself into a popular Chinese fashion label and even one of the most searched Chinese apparel brands on the ranking launched by people.cn and Baidu. Additionally, some domestic corporations are considered “the national pride”, which can well respond to people’s nationalist sentiment. For example, Li-Ning, a Chinese sports apparel brand founded in 1990, failed to attract young consumers because of the intense competition from international companies, such as Nike and Adidas. Nevertheless, in 2018, when it launched a collection featuring Chinese elements at Paris Fashion Week, this brand suddenly went viral in China. It is even considered one of the most successful companies promoting Chinese culture at an international level, which perfectly addresses the emerging nationalist trend of Cultural Confidence.
Collective identity, core value of Guochao
As the Chinese people’s collective identity is the core value of Guochao, there are numerous ways to leverage this trend of preference. Culture, history, art, or even shared experiences can therefore be the elements that can attract the Chinese consumers. Even before this national fad went viral, some brands had already noticed its potential. In 2016, Gucci extended its #GucciGram project, an online art program originally launched in 2015, under the topic of “Tian” (天), a word coming from Chinese and meaning sky or paradise. 24 Asian artists were invited to create artworks based on the Tian motif featuring flowers and birds designed with chinoiserie style, a decorative style dating back to the 18th century and inspired by traditional Chinese and Asian art. A collection featuring this Chinese esthetics-inspired motif was also launched by the brand. More recently, Dior applied “seed embroidery” (打籽绣), a traditional Chinese craft technique, to its fall 2021 menswear collection. By combining street art designs with traditional stitching skills, this luxury maison has successfully created an innovative work that can resonate with the Chinese consumers from a cultural standpoint and simultaneously bring new sparkles to the Chinese tradition.
Potential of nostalgia marketing
Brands can use the shared life experiences of the Chinese people to tap into Guochao as the Chinese people, especially young adults, are highly responsive to retro elements, which makes nostalgia marketing work very well in this country. Many corporations have noticed the potential of mahjong, a tile-based game originating in China. For the Chinese people, it is not only entertainment but also a social activity via which people can easily build connections with others. As it is highly popular in China, the General Administration of Sport of China even created a set of rules for mahjong competitions in 1988 to officially recognized it as a sport. Apparently, this game has deeply integrated into people’s daily life and even become a symbol of Chinese culture. Tiffany & Co. launched its mahjong set in 2020. The new design of the tiles is combined with this jewelry company’s iconic style: each one has an American walnut wood base with a white surface on which the patterns are colored in Tiffany blue, grey, and black. Tiffany & Co. is not the only luxury player creating mahjong sets. Louis Vuitton, Hermès, and Prada also launched their Chinese tile-based game kit with the brand styles.
Challenges of Guochao
Regardless of the impact of Guochao, many apparel companies, especial the ones from the luxury sector, are still hesitating to actively join this trend. The most evident reason is that the Chinese consumers are highly sensitive to China-related issues. Any wrong step can generate huge backlash from the market as there is a strong “cancel culture” in the country. For western brands, misinterpretation of culture is the most common mistake. Burberry launched its 2019 Chinese New Year collection featuring the color red, which is the most used color during this festival. However, its new campaign was heavily criticized by the Chinese consumers because the advertising photos were presented in a gloomy way, which contradicts the joyful atmosphere of the Chinese New Year. Moreover, Guochao can sometimes become a catalyst of extreme patriotism. The national boycott over the use of Xinjiang cotton is one of the most extreme examples that bring huge damages to foreign brands. By leveraging people’s patriotist sentiment, China is able to impose enormous pressure on international companies.
Guochao is a trend that western players can get benefits from when entering the Chinese market. It helps foreign brands connect with the local consumers more easily and efficiently. However, without conducting deep investigations into the Chinese culture, society, and people, corporations from other countries can put themselves in a very risky situation in terms of company reputation and commercial profitability. Guochao is bringing new opportunities. But, at the same time, it is making localization in China even more challenging than before.
