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Last year, Marriott International tasked Arnold Ma with creating a marketing campaign for the Shanghai opening of Moxy, a hip, modern offshoot of the U.S. hotel giant geared towards younger guests.

In Marriott Moxy hotels in the U.S., the front desk doubles as a bar, and lobby furniture bears slogans like ‘pizza is my spirit animal.’ Marriott knew it had to localize Moxy to appeal to China’s Gen Z. It hired Ma, CEO of China-focused digital marketer Qumin, to sell the brand—energetic and lively—to China’s young consumers, who are known for being skeptical of foreign influences and for ‘lying flat’ to escape the rat race of China’s economy by doing as little as possible.

The project was a study in contradictions, but it was up to Ma’s Qumin team to make it work.

They started by conducting a sort of unofficial ethnography of China’s Gen Z and found that members of China’s Gen Z had an “innate confidence” in their own abilities and a desire to create. So Qumin enlisted a group of underground Gen Z artists with cult followings to paint the hotel’s interior and craft cocktails for the launch of China’s first Moxy hotel in Shanghai’s Hongqiao district. Local graffiti artists tagged the walls with robots and abstract images. A DJ played house music. There was a pit of pink and purple plastic balls and pillows specially designed for the opening plastered with pictures of guitars and red, floating lips.

An accompanying campaign on Douyin, China’s TikTok, called ‘Where Brave Starts,’ featured influencers who’d made Moxy-themed videos and inspired followers to make thousands of videos of their own. “We kind of had this pyramid effect where we got creators to make pieces for the hotel, which then could be turned into content,” says Ma.

The ‘Make Moxy Yours’ campaign generated “a phenomenal 420 million views and 5.98 million likes” on Chinese social media channels, says Jennie Toh, vice president of brand marketing for Marriott Asia Pacific. After the launch of the Shanghai Hongqiao location in June 2021, Marriott opened a second Moxy hotel in Shanghai and four others throughout the mainland. More locations are “in the pipeline,” Toh says.

Occupancy figures rose 500% at Moxy’s flagship Shanghai location in the weeks after the campaign. Marriott declined to say if that success continued this year amid tight COVID restrictions, but executives claim that the company’s business in China remains strong. “Many of [Marriott’s or its partners’] hotels are benefiting from increased volumes of domestic travel [in China], albeit some pauses when certain markets go into lockdown,” Marriott CEO Anthony Capuano said on an earnings call earlier August.

Marriott loved the marketing campaign’s results, even if its leaders didn’t fully comprehend how Ma generated them. “[A Marriott executive] was like, ‘Man, I don’t understand what’s happening in any of these videos,’” Ma says.

Foreign executives don’t have to see eye-to-eye with China’s Gen Zers to recognize their power. China’s 270 million Gen Zers make up 19% of the nation’s total population, a share that is set to grow to 27% by 2025, according to Chinese digital marketing agency Alarice. The spending power of China’s Gen Z is set to quadruple to $2.4 trillion from now until 2035, according to China Renaissance. But the quirks of Gen Z—their distaste for overwork and preference for local goods—defy generational shifts of the past. Western brands that want to remain relevant in the market of 1.4 billion have to rethink their China strategies and learn a new set of rules to crack China’s Gen Z code.

The disconnect

China’s Gen Z is not just indecipherable to foreign executives. Older generations of Chinese also struggle to understand a cohort that has grown up in a world of relative affluence and WeChat.

China’s Gen Z population was born between the years of 1997 and 2012, just as the country transformed from a plodding backwater into a global powerhouse. During that time, China’s economy expanded by a factor of eight, growing from the world’s seventh largest economy to second place. When the first Gen Zers were born in 1997, China’s economy was just starting to boom, and the country had a per capita GDP of $781. By 2007, when Gen Zers turned 10, China’s per capita GDP had more than tripled to $2,694. Gen Zers have only known China as an economic superpower, a trait distinguishing them from their elders whose working years coincided with China’s rise.

“It’s the biggest gap between any generation and another, probably anywhere in history,” says Ma.

Smartphones have worsened the disconnect, says Allison Malmsten, marketing director at Daxue Consulting. China’s Gen Zers are defined by their digital lives. “In the West, they’re kind of testing the waters with integrating social media and e-commerce,” she says. “But in China, they’ve already been doing this for a couple of years now… that means your social media time is more integrated with your shopping time, which is more integrated with showing off what you are buying, which is more integrated with hobbies.”

The gulf between Gen Z and older generations fuels movements like “l(fā)ying flat” and “involution”—a term that refers to the opposite of evolution and encourages people to become stagnant. Older generations were willing to log long hours to grow China’s GDP. Gen Z is struggling to see the payoff; China is already a top economy, and the rewards for their hard work have diminished.

This generation has grown up in a “super high-pressured environment,” where the intense competition of trying to get into the right middle school or high school is followed by an equally intense scramble to find the right job or spouse, says Zak Dychtwald, CEO of consultancy Young China Group. But the rat race doesn’t pay the way it used to. In June, China’s youth unemployment rate hit an all-time high of 19.3%. Buying a house is increasingly out of reach. In 2020, average housing prices in Chinese cities were nearly 13.7 times greater than average annual incomes, nearly double the ratio of the U.S. “There has been a feeling of helplessness that no matter how hard [Gen Zers] work or compete that the things that they want in life are out of reach,” says Dychtwald.

Lying flat and involution are not just online fodder, experts say; symptoms of passive resistance are popping up across Chinese society. Some white-collar workers are quitting high-stress jobs and moving to the countryside. Experts also attribute China’s falling birth rates, at least partly, to a desire among Chinese women to avoid societal pressures to have children.

Disaffected consumers promoting a “slacking culture” don’t make for easy marketing targets, says Ashley Dudanerok, founder of Alarice. But brands that do business in China are trying to reach them—with mixed results.

Last year, a Russian man named Vladislav Ivanov who goes by the stage name Lelush became a national star and a symbol of the lying flat movement after participating in a Chinese singing competition reality show. After Lelush signed up for the show, he purposely tried to lose and get himself voted off by deliberately singing poorly and pleading with viewers to not vote for him. Despite Lelush’s attempts to get kicked off, he made it through ten episodes, barely missing out on a spot in the show’s finale.

Fashion brands Prada, Gucci, and Fendi have all since featured Lelush in ad campaigns in China. Extra chewing gum, owned by American firm Wrigley, featured Lelush in a commercial in which he chews gum while he disinterestedly commutes to work, goes to the office, and works out at the gym. These brands are playing into the lying flat “slacking culture,” says Dudanerok.

Guochao or nationalistic buying

Ma argues that the ‘lying flat’ narrative about China’s Gen Z may be “blown out of proportion.” With the Marriott campaign, he found that Gen Zers were not necessarily apathetic; they just wanted to identify their passion and find a way to pursue it.

He says the hardest part of the Marriott assignment was selling young Chinese on a foreign brand. “Before Western brands were always seen as superior. That’s not the case anymore,” he says.

Indeed, guochao, or nationalistic buying, is rising in China amid a widening rift between the U.S. and Beijing; it’s especially popular among Gen Z consumers. Since 2011, the number of people who said they would buy a Chinese brand over a foreign one increased from 15% to 85%, according to a 2020 McKinsey survey of 5,000 people across 15 Chinese cities. And much of that rise is thanks to Gen Z. A Tencent survey recently showed that 45% of Chinese consumers born after 1995 often bought products that had guochao, or nationalistic elements in them, compared to 38% of consumers born in the 1990s and 27% born in the 1980s.

In March 2021, some young consumers burned Nike shoes to protest the company's stance on forced labor in China's contentious Xinjiang region. In August, social media users threatened to boycott Snickers candy bars after a Snickers ad shown outside mainland China referred to Taiwan as a country. The Snickers backlash occurred shortly after U.S. Speaker of the House Nancy Pelosi's visit to Taiwan inflamed tensions between mainland China, Taiwan. Snickers' U.S. parent Mars Wrigley issued an apology on Aug. 5, declaring that Taiwan "is an inseparable part of Chinese territory."

"China's Gen Z is 'woke' in their own way," says Malmsten. "What is considered forward-thinking among Chinese Gen Z is being very critical of foreign influence."

Foreign brands can't ignore the guochao trend and lose out to patriotic competitors. Instead, companies based overseas are collaborating more with local brands and institutions.

"Guochao is all about authenticity and nationalism... the only way for foreign brands to do it well is to borrow authenticity and borrow nationalism through local partners," says Ma. He cited Oreo's collaboration with Beijing's Palace Museum, a historical museum housed inside the Forbidden City, as a successful partnership.

In 2019, Oreo and the Palace Museum created an imperial-themed line of Oreo cookies with flavors like green-tea cake, red-bean cake, and lychee-rose cake—the latter of which was a nod to the favorite snack of Qing Dynasty emperor Kangxi. Oreo claimed it sold 760,000 boxes of the new cookies online on the first day and attracted 260,000 new followers to its flagship store on Alibaba's TMall platform.

Other brands have clumsily played into Chinese patriotism, sparking backlash from consumers who can easily spot guochao imposters.

American chocolate maker Dove launched its own Forbidden City-themed box of chocolates for Chinese Lunar New Year in 2020. But internet users complained that the boxes barely featured elements from Chinese history and were just a ploy to capitalize on guochao.

"Collaborations that are viewed as superficial or that embrace improper cultural components endanger the brand's reputation," says Dudanerok.

Ultimately, Dychtwald says, foreign brands must approach the Chinese market humility.

"You have to create products that appeal to [China's Gen Z] market specifically, which means having an intimate understanding of what they want," he says. "Global brands are investing in market intelligence for that, but they're not always empowering the local Chinese team to actually develop the strategy."

The days of coasting on brand recognition alone are long gone, Ma says.

"You can't rely on the fact that you are a heritage foreign brand," says Ma. "That just seems really cocky these days... People don't care where you come from. People care about what you're doing right now."