By THE NATION
Latest findings from The Chinese Consumer Report shows that 91 per cent of Chinese respondents agree that when making a purchase, quality is more important than price; while over four in five (81 per cent) are interested in trying something new rather than sticking to the familiar.
The new Mintel research also reveals that total consumer expenditure in China grew 8.6 per cent to reach RMB41,146 billion (Bt184,177 billion) in 2018. While this is slower than the 11.2 per cent growth seen in 2017, expenditure grew in line with China’s per capita disposable income of 8.7 per cent.
Mintel’s Jessica Jin notes that the survey shows Chinese consumers are becoming savvier spenders and are willing to pay a premium for products and services that support a richer lifestyle. But when it comes to basics, value for money is still the top consideration.”
Savvier and more prudent spending
Household care products is the top sector where decreased prices or discounting has played a big part in driving consumers to spend less; as indicated by the 43 per cent of Chinese respondents who have spent less on household care products (eg tissue paper, household cleaning products). On the other hand, consumers are willing to spend more for broader, self-indulgent experiences including holidays.
Mintel research further reveals that personal items and housing remain the biggest consumer spending sector, accounting for 23.7 per cent of total consumer expenditure in 2018. This is followed by in-home food (14.3 per cent), holidays (9 per cent) and clothing and accessories (8.1 per cent). Looking ahead, Mintel predicts that holidays, transportation, and personal finance and housing, will be the top three sectors with the highest growth in terms of consumer spending, reaching a compound annual growth rate of 12.8 per cent, 10.2 per cent and 10.1 per cent, respectively, in the five years to 2023.
“China's stable economy in 2018 has driven consumer demands beyond basic necessities like food and drink, towards more emotional requirements like attaining enjoyment from holidays, leisure and entertainment. With more and more consumers pursuing a better quality of life and wanting more new life experiences, sectors such as holidays, leisure and entertainment, and clothing and accessories, have encouraged many consumers to self-indulge and spend more in 2018. Meanwhile, increasing expenditure on essentials like in-home food, for instance, is driven by rising prices in the market,” Jin said.
Mintel’s annual The Chinese Consumer 2019 Report tracks consumer spending across 15 market sectors, revealing the future opportunities with each category. Sector highlights include:
- In-home food: Pursuing better-for-you and convenient diets
- Beauty and personal care: 360-degree holistic beauty solutions will mainstream
- Clothing and accessories: keeping up with growing individuality and Chinese brands increasingly in the spotlight
- Leisure and entertainment: Self-indulgence and breaking from routine
- Holidays: Leading sector for consumer spending with promising growth prospects