Chinese Consumer Trends

Chinese consumer mindsets are shifting. Thinking of entering the Chinese market with your product or service? Here are some trends to keep an eye on.

Consumer Confidence: Savings Rate
In times of economic crisis, the unusually high savings rate of Chinese citizens, sometimes as high as 50 percent, has been both a blessing and a curse. On one hand, the Chinese government didn’t have to contend with waves of foreclosures or bankruptcies brought on by an overleveraged society. On the other hand, the government’s encouragement for citizens to spend more to buoy a slowing economy also appeared to fall on deaf ears. Some appeared to take to heart though. A recent China Market Research Group survey of 5,000 Chinese below the age of 32 in Shanghai found a savings rate of zero among this group. This finding speaks volumes on ambitiousness and consumer confidence among the Chinese youth.

Staying Home: Luxury Sales in Interior China
As minimum wages rise throughout China, more young professionals are staying in their hometowns instead of venturing to the big coastal cities to seek their fortunes. This has created unprecedented markets for luxury goods in unexpected places. In fact, according to recent studies, the fastest luxury sales are in China’s second and third-tier cities like Chengdu and Harbin. Citizens here are gaining buying power, but not necessarily the ability to shop abroad for better prices like the affluent populations of Shanghai, Beijing and Hong Kong. Take advantage of concentrated audience, tax incentives and lower real estate costs by entering the Chinese market through one of these regions.

Who’s Shopping? Mom and the Kids
With men traditionally at the head of the household, marketing for everything from soap to cars has focused on dad. New studies are finding though, that mom and the kids are quickly gaining influence. With a more educated and professionally employed female workforce than ever before, it’s no surprise that an increasing number if Chinese households, especially in the big cities, are reporting finances controlled by women. Add to that the extended childhood among China’s upper classes, where young adults in their 20’s can expect mom and dad not only to provide the bare necessities, but also cars and computers. Have goods or services aimed at one of these audiences? This is your opportunity to get in at the ground level of a rapidly growing market.