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Five things you should know about Chinese consumers

Five things you should know about Chinese consumers article image

As China slows, the western world is becoming increasingly concerned that China’s consumers are about to close their wallets.

But a new report from consultancy McKinsey & Co. says that’s unlikely to be the case.

McKinsey surveyed 10,000 consumers, aged 18 to 65, across 44 Chinese cities.

Laurie Burkitt from the Wall Street Journal identified five key consumer traits in the report that can assist exporters into China …

Chinese consumers are not lacking in confidence

Chinese shoppers are willing to spend because they feel pretty confident that that their incomes will rise over the next five years. Confidence levels vary by region and are lower in Northeastern China, where the manufacturing industry has been sinking for years, but consumers in China are even more optimistic than in the US or UK.

Most Chinese consumers seem unaware that the Chinese economy is deteriorating.

Chinese consumers are not homebodies

Anything that can be experienced beyond the house is better for Chinese consumers. Forget dinner at home with the family, Chinese want entertainment and a meal out. It’s all about the adventure. Spas, massages and travel are the ultimate as spending on service boosts. Of consumers surveyed, 23 percent said they would spend more on travel if incomes rise, an increase from 14 percent in 2012.

Chinese brands are overtaking foreign brands

The days when shoppers gravitated only to the foreign brands are officially over. Chinese brands have won trust and earned consumer loyalty. Last year, 62% of consumers said that given similar quality and price, they would prefer Chinese brands to foreign ones. That compares to 42% in 2009.

Chinese will pay more for the best

Not only are many Chinese consumers not pulling back on their spending, they’re actually spending more. Half of consumers surveyed say they want the most expensive product and are willing to shell out for the best. Forty-four percent say that they pay more for cosmetics, while 36 percent say they trade up for spirits and 26 percent buy more expensive hair products. 

China is on a health kick

Like Australians, Chinese are becoming more health conscious, with 72% of consumers last year worrying that the food they eat is harmful to their health, up from 60% in 2012. Half of consumers are focused on eating food they think is nutritious and they’re cutting out the food they think isn’t. Western fast food saw a 24% drop last year.

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