nese elements.  The trend has been gaining momentum since 2020; however, the seeds were planted nearly a decade ago when President Xi Jinping introduced the Made in China 2025 initiative, which encouraged “the transformation of Chinese products into Chinese brands”. This policy was established to shift China’s manufacturing-led economy to a more consumption-based economy due to the country’s falling GDP value between 2007 and 2010.  The Made in China 2025 policy was initially more focused on China’s technology sector, but has since been adopted by the country’s other economic drivers, such as the entertainment, fashion and retail industries.  Currently, Chinese Gen Zs make up nearly 270 million amid the country’s population and are the wealthiest consumer group to enter the market, with the average age of a luxury customer in China being 29 years old. With their increasing appetite for local-made products and patriotic sentiment, this generation is quickly becoming a threat to international brands operating there.  Nike, the biggest sports brands in the world, has been losing its market share to local Chinese competitors, Li Ning and Anta, due to the Guochao trend. An analysis of Tmall’s top 100 brands in 2021, by Bloomberg, indicated sales of foreign sneakers had fallen, by 24 per cent, year on year, and imported sportswear sales had declined by 33 per cent, year on year – the first time in years for both moves. Which raises the question: How can international brands navigate Guochao and avoid losing relevance in a market as important as China? Appreciating heritage  The Covid-19 pandemic was an important factor in advancing the Guochao trend. As international travel was halted, many Chinese people began exploring more areas within the country, reigniting an appreciation for China’s long history and traditions. Royal gardens and pavilions became a hot spot for domestic travel, with many young Chinese people discovering these places for the first time.  Immersive experiences that involved dressing up in Hanfu clothing and donning historically accurate wigs and makeup became a popular tourism trend during Covid. Hanfu, a style of clothing traditionally worn by the Han people, is one of the most popular ways Chinese Gen Zs are embracing their heritage.  The style has become so significant in recent years that true Hanfu enthusiasts are now choosing to wear traditional clothes in everyday life, as a means of expressing national identity and growing cultural confidence. Today, seeing young people wearing Hanfu has become a common sight in many cities, especially ancient Chinese capitals like Xi’an and Luoyang. Ai Media Consulting’s 2022-23 report on consumer behaviour and the Hanfu industry states that the Chinese Hanfu market exceeded 10 billion yuan in 2021 and is projected to reach 19.11 billion yuan ($4.1 billion) by 2025, a hundredfold increase from 2015. Embracing ‘made in China’ The ‘made in China’ label may carry a certain stigma in the West, but Chinese consumers are embracing it. Long gone are the days of local products being deemed low quality and cheap, as the standard of manufacturing in China has improved tremendously in recent years. Now, Chinese consumers have the luxury of choosing between international brands or local brands that can rival them in quality. Florasis (also known as Hua Xizi locally) is a high-end beauty brand based in Hangzhou. Its unique brand ethos that employs traditional beauty rituals in the form of modern cosmetics has made it popular not only in China, but also in the international market.  Florasis’ meteoric rise to global popularity can be attributed to the brand’s intricate and ornate packaging, which is heavily influenced by Chinese art, history and myths.  Gabby YJ Chen, global expansion president of Florasis, said, “At the beginning, as a Chinese brand that had only been established for a few years, Florasis did not plan to go global so quickly,” but the growing interest in Eastern beauty helped propel the brand overseas. “Last year, our product’s satisfaction rate for sales outside of China exceeded 96 per cent, with a return rate below 1 per cent,” Chen said. She said that Florasis has sold products to customers from over 100 countries and that the brand’s overseas social media profiles had amassed more than 2 million followers.  Beyond just Florasis, other design-led Chinese brands, such as Li Ning and Bosideng are enjoying similar global success by retaining their unique Chinese identity and coupling it with cutting-edge product innovation.  Where do international brands fit in? While the Guochao trend has proven beneficial for the Chinese economy, international brands are facing a serious predicament. To meet the demands of China’s nationalistic and fastidious Gen Zs and regain market dominance, international brands will need to go out their way and shift their mindset.  Zak Dychtwald, a trend forecaster of Young China Group, explained that, “Similar to the Baby Boomers in the US, China’s Gen Z are redefining the country’s consumer economy and will continue to do so in every single life stage they go through.” Past misfires such as Dior beauty’s “slanted-eyes” ad on social media have been quickly met with harsh criticism from netizens, and even the Chinese state-owned media. This has made many brands wary of China’s cancel culture, which can be very unforgiving. “Certain Western brands in China simply use Guochao as an excuse for their failure to localise,” said Harriet Sheffer, the APAC marketing and strategy director for Outform. But to ignore Guochao completely would mean a huge loss of opportunity. It is commonly interpreted as products made in China, but in reality, the concept is more about embracing Chinese culture authentically.  Recent examples include Prada’s collaboration with the Chinese women’s national football team, famously known as the Steel Roses. The 23-member squad were dressed in handmade suits and loafers designed exclusively by Prada as their official off-pitch uniform for this year’s FIFA Women’s World Cup.  The brand also subsidised the restoration of the Rong Zhai residence, a historic mansion that was built in 1918. The Shanghai landmark became the perfect backdrop for Prada’s weekend market pop-up that encouraged sustainable and healthy living. Open to the public, the event pulled in more than 3000 visitors and drove more than 6.6 million views on local social media platform Xiaohongshu.  Other successful attempts at Guochao include Hennessy’s collaboration with Chinese artist Cai Guo-Qiang for the brand’s 150th anniversary, Givenchy’s special-edition bag with popular Beijing-based influencer Mr. Bags, and Fendi’s much-loved bubble tea lounge with China’s number one tea chain, Heytea.  A common thread among all these endeavours is how international brands aligned themselves with things of which Chinese people are proud. From the football team to historical landmarks and bubble tea, they are all deeply woven into modern Chinese culture and lifestyle. By partnering with these household names, international brands are able to get a real cultural insight into China and tap into their zeitgeist. Guochao, if done correctly and respectfully, can be a winning formula for both international and Chinese brands.