Personalized consumption becomes increasingly popular business mode in China

Staff members work on a production line in a sports shoe company in Jinjiang City, southeast China's Fujian Province, May 14, 2022. (Photo/Xinhua)

Many consumers in China are enjoying the convenience and comfort brought about by customized products, whether it is a lipstick with their names on it or one-stop interior design services.

As various kinds of enterprises’ digital transformation deepens, customized supply services driven by precise demands are becoming increasingly popular.

With the continuous upgrading of consumption, the aesthetics, design concepts and cultural value of products matter more to consumers. Generation Y and Z, who have gradually become a major force for driving consumption, often show personalized and diversified demands for products and are willing to pay extra for product designs and characteristic services.

Customized products can be widely seen on e-commerce platforms, from tailor-made clothes and phone cases to home appliances and automobiles, even extending to encompass fitness and travel services.

In recent years, a new customized production model that links customers directly to manufacturers, known as Customer-to-Manufacturer (C2M), has become popular. Unlike the traditional model in which consumers would say what kind of product they wanted and then manufacturers went about producing it, the C2M model permits manufacturers to obtain consumers’ data and analyze their preferences through technical means such as big data, and in this way make products that better suit their needs.

C2M products are widely seen in people’s life. For example, based on the needs of old-aged users, a mobile phone company, together with an e-commerce platform, rolled out a 5G mobile phone specially made for the elderly that provides them with emergency contact functions, online consultation, entertainment, and traveling services.

According to insiders, this customized production model, which is becoming a new trend for online consumption, can explore consumers’ demands that they are not yet aware of, and allow them to get the products they want without participating in customized production.

It was predicted by iResearch, a leading provider of online audience measurement and consumer insights in China, that the industrial scale of C2M will step into the 1 trillion yuan level this year.

Consumption upgrading provides demand support for customized consumption, said Wu Qi, executive director of the Wuxi Institute of Digital Economy, adding that with the application of digital technologies such as artificial intelligence (AI) and big data in manufacturing, customization can nearly be realized without increasing marginal costs.

This helps enterprises reduce excess capacity, cut costs, cultivate high-end brands and realize transformation and upgrading, Wu added.

Online platforms are an indispensable medium connecting consumers and production lines, and e-commerce platforms have become a major sales channel for C2M products.

By collecting information, transmitting data, integrating resources and facilitating transactions, e-commerce platforms gather merchants and consumers together while promoting the efficient integration of commodity production, circulation and supporting services, stimulating the development of customized consumption, according to Wu.

At the same time, increasingly mature infrastructure such as logistics distribution and online payments is also an important guarantee for customized consumption, Wu noted.